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Nokia N8 Components Cost $187, Led by Touchscreen, iSuppli Says

Nokia Oyj’s N8 mobile phone, the company’s latest attempt to challenge Apple Inc.’s iPhone, includes components that cost $187.47, according to researcher iSuppli Corp.

Materials and parts used in the N8 were supplied by companies including Samsung Electronics Co., Toshiba Corp. and Texas Instruments Inc., according to a teardown of the device by El Segundo, California-based iSuppli. The most expensive element of the N8 is the display and touchscreen, which cost $39.25.

The N8 sells for 529 euros ($733) on Nokia’s Finnish website and $549 on its U.S. website, without a contract. Materials and parts used in Apple’s 16-gigabyte iPhone 4 cost $187.51, iSuppli said in June. The device sells for $748.99 unlocked on Amazon’s U.S. site, or $199 from Apple with a two- year AT&T contract.

Nokia, which has lost high-end market share to the iPhone, switched to a more sensitive capacitive display from a pressure- driven resistive display used in most earlier smartphones. Photography and video are among the N8’s main selling points, with a 12-megapixel main camera using a five-element Carl Zeiss AG lens and a front-facing camera for video calls. Nokia aims to sell 50 million devices based on the revamped Symbian 3 operating system that debuted in the N8.

“Regardless of some of the extra high-end features, like the 12-megapixel camera, the budgetary range for the end product is similar to all the other smart phones competing in the iPhone space,” said Andrew Rassweiler, an iSuppli analyst who supervised the teardown. “One would assume Nokia, given their presence and market share, still has very high leverage on component costs with suppliers.”

Nokia’s spokespeople couldn’t immediately be reached to comment on iSuppli’s analysis.

Suppliers

Research firms conduct so-called teardown analysis of consumer electronics to determine component prices, identify suppliers and estimate profit margins. The estimate doesn’t include costs for items such as labor, shipping, advertising, software development or patent licensing.

Samsung supplied the 3.5-inch AMOLED touchscreen, similar to that used in its own handsets, with the controller coming from Synaptics Inc., according to the researcher. The chipset used to run the operating system and applications in the N8 cost $22, according to iSuppli. It includes digital and analog processors made by Texas Instruments and a Broadcom Corp. multimedia processor with support for the HDMI port for high- definition TV output, the researcher said.

Memory components, including 16 gigabytes of mass storage, cost $37.12, according to iSuppli. The cost of the camera elements added $31.08.

Market Share Battle

Nokia is the world’s largest maker of mobile phones and smartphones, with an overall market share of 34.2 percent in the second quarter, according to Gartner Inc. It held onto a 37.4 percent share of the smartphone market for the quarter as the average price sank to 143 euros from 181 euros a year earlier on the absence of a hit high-end model.

The N8 was announced on April 27, less than a week after Nokia cut its profit forecast for the first time this year, sending shares down 14 percent. The company lowered its forecast twice more in the next three months as development of the N8 stretched through the third quarter, depriving the company of a high-end contender against the iPhone and handsets running Google Inc.’s Android software.

The first N8s were shipped from factories in Finland and China on Sept. 30. A lower-priced model also using Symbian 3 software, the C7, began shipping Oct. 11. That means new Chief Executive Officer Stephen Elop will be able to report on early- market reception of at least two new smartphones when he presents third-quarter earnings on Oct. 21.

To contact the reporter on this story: Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net

To contact the editor responsible for this story: Vidya Root in Paris at vroot@bloomberg.net

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