iSuppli has published their findings from a recent teardown of HTC's Thunderbolt and come to some interesting conclusions therein. The Thunderbolt, which is currently Verizon's top-end Android phone, has an estimated bill of materials (BOM) of $262. That's the cost of the phone's components, not the total cost of manufacture, and much less than the total cost of the device once marketing, shipping, and warranty costs have been factored in as well. According to IHS, the Thunderbolt is the most expensive phone it's ever deconstructed.
Note: Verizon currently offers the Thunderbolt for $249 with a two-year contract.
The largest single contributor to the Thunderbolt's price tag is its 4G
estimates that the 4G LTE equipment inside the phone accounts costs 39.75, a full 20 percent of the device's BoM. The analysis firm then leapfrogs a bit, noting that the size and cost of the equipment in question would require Apple
to significantly adapt the existing iPhone 4 design if it wants to add 4G LTE support.
“It remains to be seen whether the next Apple iPhone set for introduction in September will support 4G LTE," said Wayne Lam, senior analyst for IHS. “However, if it does, two things are clear. First, the iPhone’s minuscule printed circuit board (PCB) will have to grow in size in order to support the first-generation LTE baseband processor as well as all the supporting chipset. Second, the next iPhone’s BOM value certainly will increase substantially compared to the iPhone 4 if LTE is implemented in the same manner as in the HTC Thunderbolt."
While there's a more advanced solution than the Thunderbolt's already on the market, Apple would still have had to make certain design concessions to squeeze the technology into the upcoming iPhone 5 currently expected in September. From the company's perspective, there may be little reason to do so. The original iPhone
was widely criticized for its lack of 3G support, but that limitation had little impact on the phone's popularity.
There's nothing wrong with 3G coverage maps--but putting this under the 'Coverage' section on AT&T's 4G section is disingenuous, fine print or no
Furthermore, the fact that Verizon (and AT&T by September) technically offer 4G LTE service in a few areas won't mean that the service is available to most. The coverage map shown under AT&T's "4G" webpage is actually a 3G map, as the fine print makes clear. AT&T's site implies that activating HSPA+ is a matter of flipping a few switches. In reality, rollouts are going to be more nuanced, and the technologies that are being marketed as 4G are only moderately faster than the 3G they replace.
Apple has made it clear that iOS 5 will be a major new product. Given that we know the upcoming iPhone will include some of the advances already baked into the iPad 2, the iPhone 5 may not need 4G to be competitive. iSuppli itself implies that incorporating 4G at this point would require Apple to trade device size, weight, and/or battery life--given the option, consumers might prefer to stick with 3G until 4G can be adopted with less of an impact on these characteristics.