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ISuppli: HTC's Droid Incredible Costs $163 to Make

(Corrects where Broadcom is based in sixth paragraph.)

The Droid Incredible, a smartphone manufactured by HTC Corp., has materials that cost $163.35, according to a teardown analysis of the phone conducted by iSuppli Corp.

The Incredible, which has been available for sale online from Verizon Wireless (VZW, VOD), is expected to make its debut at Verizon stores on Aug. 3 for $199 with a contract. It runs Google's (GOOG) Android operating system.

The iSuppli analysis released July 29 found that internally the Incredible is similar to a prior Android phone, the Nexus One, which Taiwan-based HTC built for Google. Google stopped selling the Nexus One on July 21. "There are so many commonalities between the Incredible and the Nexus One, and some of the other Android phones we're looking at, it's pretty clear the manufacturers are following some of the same basic design guidelines," says iSuppli analyst Andrew Rassweiler, who supervised the teardown.

For example, both use the same Qualcomm (QCOM) Snapdragon wireless chip in combination with the same touchscreen controller chip from Atmel (ATML), a San Jose-based chipmaker. "What we think is that there's a reference design, which is like a basic recipe, suggesting that if you use this chip in combination with another chip, you end up with a cool smartphone," Rassweiler says.

Different Network

One key difference between the Nexus One and the Incredible is that the newer phone runs on Verizon's wireless network, which is different from that of T-Mobile USA (DT), which carried the Nexus One. Qualcomm is the leading supplier of chips for phones that work on the Code Division Multiple Access (CDMA) standard Verizon uses for its network. At $31.40, Qualcomm's Snapdragon chip is the most expensive component inside the Incredible, Rassweiler says. Aside from the network difference, the phones are so similar that the Incredible might have easily been dubbed the "Nexus Two," Rassweiler says. A Qualcomm spokeswoman did not return a call seeking comment. Atmel spokeswoman Agnes Toan declined to comment.

Other suppliers for the device include Irvine (Calif.)-based Broadcom (BRCM), which supplied a chip responsible for handling both Bluetooth and Wi-Fi wireless networking connections. That chip costs $8.45, according to iSuppli. South Korea-based Samsung Mobile Display Co. Ltd. supplied the display, built using a technology known as Active Matrix Organic Light-Emitting Diode, or AMOLED, which cost $31.20. A spokesman for Broadcom did not return a call seeking comment. Samsung spokeswoman Chris Goodhart declined to comment. Dallas-based Texas Instruments (TXN) supplied a power management chip. Heather Ailara, a spokeswoman for TI, had no comment.

Verizon has introduced several phones running Google's Android software, including Droids from Motorola Inc. (MOT) and HTC to compete against AT&T Inc.'s and Apple Inc.'s (AAPL) iPhone. The new devices helped Verizon add 665,000 contract customers in its second quarter—topping AT&T's gains. The Incredible has been plagued by sliding shipment dates throughout the summer. Verizon has said recently that orders for the Incredible will begin shipping on Aug. 3.

Analysts use so-called teardown analysis from iSuppli and other researchers to assess how much profit a manufacturer or service provider may get from sales of a consumer electronics device.

Hesseldahl is a reporter for
With Carlos Bergfeld in Silicon Valley

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