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Wednesday April 29, 2009
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 Analyst firm iSuppli has adopted a unique niche in the world of gadget reporting: the teardown.
Taking the "unboxing" trend to the next level (and do people care about packaging material that much?) iSuppli typically buys a gadget, takes it apart, and provides a cost estimate of what it cost the assemble. The end number usually doesn't mean too much to the average consumer, although knowing the gross margin on a product also allows guesses as to how much it can be discounted in future revisions. And that's worth knowing.
With the Palm Pre, however, iSuppli has attempted a "virtual teardown," basically a series of guesses as to what components are in the Pre, and how much they cost. As you might suspect, this is far less precise.
The Pre costs $137.83 in materials cost, and carries an estimated bill-of-materials cost of $170.02, which is much closer to the actual cost of manufacturing when manufacturing and software development is factored in.
At $300, that leaves about $130 in profit for Palm, although, at a subsidized price of about $200, the Pre's expected margins will be much slimmer. And Palm also has to cross these other items off of its checklist before the Palm can be considered a hit.
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