Steve's Gadget Blog

Well, no, it isn’t. As the report says, “Carriers like Verizon and AT&T sell their mobile phones at subsidised pricing, so the actual price and materials/manufacturing margin for the product is difficult to determine”.

The BlackBerry Storm: loss leader?

Although the RRP in US is $249.99, the Storm is being sold with a $50 rebate, bringing the cost down to $199.99. This brings it in line with Apple’s rival offering, the iPhone. However, with network suppliers subsidising the cost, it’s fair to assume that RIM is not losing money on each unit sold.

According to the research, the $202.89 cost takes into consideration all parts and manufacturing, but excludes a number of expenses, including, “Intellectual Property (IP), royalties and licensing fees, software, shipping, logistics marketing and other channel costs”.

But these figures do reveal an interesting comparison with the iPhone. The same company also examined Apple’s 8Gb iPhone 3G in 2008 and found the build cost to be $174.33 and offers Apple a BOM (Bill of Materials), manufacturing and royalty margin of 55% for each 8Gb iPhone 3G unit sold.

Apple’s most recent financial results revealed that almost 4.4 million units had been sold in FY09 Q1, propelling the Cupertino, California-based group to record-braking revenue of over $10bn and profit of $1.61bn for the quarter.

More on Apple’s financial results here.

RIM’s latest financial results showed sales figures of 6.7 million devices across its entire BlackBerry range, for the three months ended November 29, 2008. Rumours circulating at the end of January suggested that 500,000 Storms were shipped in the run-up to Christmas.

Of course, the figures related to cost of build are estimates so it’s difficult to judge exactly what impact it is having on RIM’s profits. But it does appear to suggest that the BlackBerry Storm is generating less profit for RIM than the iPhone is for Apple.

Maybe the eventual winner of the battle that is raging between the Storm and iPhone will not be decided by build costs and margins, but by a much simpler factor: which device is better.

So what do you think? Is the Storm your smartphone of choice, or is it an iPhone all the way? Comments welcome below.