When HIS iSuppli Teardown Analysis Service explored components of the Thunderbolt by HTC available at Verizon stores through disassembly, they were surprised to see that the components cost alone totaled as nearly as 53% higher than the iPhone available at the same store. Even with this difference in costs, $262 for the HTC vs $171.35 for the iPhone, the HTC smart phone still seems to be more popular according to national Verizon sales figures and that 10 percent of stores were sold out of Thunderbolts while all stores still held quantities of the iPhone.
According to IHS, the Thunderbolt has the highest components cost ever recorded, and is approaching the region where media tablets exist.
The Thunderbolt supports Verizon’s 4G LTE network, whereas the current version of the iPhone 4 (CDMA based) does not. It remains to be seen that if the iPhone 5 to be released later this year in September will also support the 4G LTE network.
The main contributor to the high Bill of Materials for the HTC Thunderbolt is how HTC decided to implement the 4G LTE network standards support in their device. Approximately 15 percent of the total cost went towards these elements totaling $39.75. HTC had started work on Thunderbolt with the Qualcomm MDM9600 for the 4G Baseband function, this alone at $29 is the most expensive part of the LTE network support for the device.
At the time, HTC started work on the Thunderbolt, lower cost alternatives were not available in the market, and they had to stick with the MDM8655 based solution. Since then, Qualcomm has introduced their MSM8960, code named SnapDragon. This is the successor of the MSM8655 that combines LTE, EVDO and HSPA on a single chip. This simplifies design and reduces size and costs from the multi-component approach that HTC had to implement for their device.
In case Apple decides to follow with using the similar approach to enabling LTE for their iPhone 4, it is estimated to add approximately 22%, totalling the cost of iPhone to nearly $211. iPhone will need to include separate CDMA2000-1x-EVDO and HSDPA solutions. According to Apple, the 8655 based solution is not suitable for their slim approach to device design. Apple will most likely go for the newer Qualcomm SnapDragon chip to keep their slim design and maintain iPhone 5 prices comparable to the Thunderbolt.
Qualcomm will be introducing their next generation 4G Long Term Evolution technology chipset sometime next year.
