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Jun. 11, 2009

Just like Apple's new iPhone, the Palm Pre is expensive to make. Unofficial estimates indicate it costs Palm between $140 and $160 to manufacture each phone.

The smartphone is currently being sold by Sprint for $199 after a $100 manufacturer's rebate.

The Pre’s screen, an advanced Low-Temperature Polysilicon LCD display cost $21 alone. Combined with the Pre’s touch-screen module, the device’s display hits an astounding $39.50.

The device’s other primary cost contributors also stem from its memory and processing power. The teardown revealed that the Palm Pre uses the same design as the iPhone for its processing. The Palm Pre’s design is split into two core spheres: the applications processor portion and the wireless interface portion.

“Most of the so-called ‘iPhone killers’ were torn down to help keep costs down by having only one core chip. But this approach burdens a single processor with multiple functions, degrading performance,” said Andrew Rassweiler, director and principal analyst for teardown services at iSuppli, in a statement.

“This Pre’s two-pronged solution may be more costly, but should yield a superior-performing smartphone,” he added.

The wireless device also has a relatively large quantity of SDRAM: 2 Gbits in two 1 Gbit dies. Most smartphones, including the iPhone 3G, incorporate only 1 Gbit or less of SDRAM. Some speculate that the larger amount of memory was needed to support the Pre’s ability to multi-task applications, a key competitive advantage of the Pre’s webOS operating system.

Additionnally, the Pre uses an optical sensor to detect when the device slides out. Other devices typically incorporate a magnet in their sliding function. iSuppli reports that the optical sensor may have been necessary because of the Pre’s optional inductive charging stand, which uses a magnet to hold the Pre to its base and could confuse a conventional sliding function.

Sony manufactured the device’s hallmark display, and Texas Instruments supplied the applications and media processor. Qualcomm’s baseband processor and Samsung’s flash memory comprise the device’s other key components.

The Pre also uses a fixed lens on its digital camera instead of an auto-focus lens, and employs proximity sensing to detect its closeness to the user’s face in order to dim the screen and conserve energy.

Overall, Texas Instruments, Qualcomm, Sony and Samsung Electronics supplied the crucial processing and display technologies that differentiate the Pre from its competitors.

All in all, there's no question that it is a phone that is more expensive to make, then again it is still a smartphone.

Of course, only time will tell how the Pre will compare to the extremely popular iPhone. Expect a lot of movement in this segment.

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Source: iSuppli.