WSJ infographic of the Lumia 900 and iPhone 4S costs and margins shows how hard it is to be like Apple or Samsung

WSJ infographic of the Lumia 900 and iPhone 4S costs and margins shows how hard it is to be like Apple or Samsung
We know that the Nokia Lumia 900 costs about $209 to assemble in components, while right now the iPhone 4S costs about $190 or even less. We also know that one handset costs $450 without a carrier subsidy, and the other is $200 more. This is not even counting the marketing and R&D behind the handsets, which is huge in the case of the Lumia 900, being the gateway phone for Nokia to get its foot back in the door of the US market.

If we count those, Nokia is earning even less from the Lumia 900 than the WSJ infographic comparing the cost of assembly for it and the iPhone 4S, whereas iPhone's SGA and R&D expenses are a small fraction of its price. 

The numbers show very clearly how hard it is for other manufacturers to be on an even playing field with Apple and Samsung. Apple - because its state of the art supply chain has been perfected over the years, and its bargaining power for component prices is unmatched, while Samsung is just capable of making most of it in-house.

Granted, the iPhone 4S is just a quarter or so away from being updated, and that's when a piece of electronics comes cheapest for the maker, but it still sells for at least $650. When the next iPhone lands redesigned and with an LTE radio it will probably cost a bit more in components, and by that time Nokia's handset margins might have gotten even thinner. 

Yet the Lumia 900 and the other Nokia Windows Phones command much higher premiums than the Symbian lineup, so Nokia has every incentive to keep pushing the envelope there.

source: WSJ



22. steelicon

Posts: 318; Member since: Apr 02, 2011

Other countries, regions and territories as well as other models (NON Windows Phones) like Symbian and S40 and feature phones are subsidizing for Windows Phones. Just some random sample pricing: 27,990 Philippine Peso = 643.88196 US Dollars with included 12% tax. $450 USD is probably heavily subsidized. Or some Nokia distribution ripping off people. And take note: The Lumia 900 in some markets with this pricing is not even LTE capable, even though LTE infrastructure and mobile plans are already present. Most notable are Indonesia, Philippines, Singapore, etc., CMIIW. So other countries, regions and territories AND other Nokia handsets sold are actually SUBSIDIZING for USA Windows Phone sales.

13. Johnnokia

Posts: 1158; Member since: May 27, 2012

So sad to see Nokia that is producing the best products loosing the Phone Market Share, while others are cheating and steal much money from us. If Nokia had adopted Android, their market share today would have surpassed 60%. Damnn Stephan Elop. I hate you.

14. -box-

Posts: 3991; Member since: Jan 04, 2012

I'm not so sure about that. Yes, there would be lots of sales for Android powered Nokias, but Nokia would have had to do something really amazing to get those sales away from Samsung, HTC, Motorola, Sony, and LG, and not just in design and camera quality. Plus with Android being the way it is, they'd have had to do something with the OS to make it feel "Nokia". Yes, Windows Phone is an uphill battle, but Android would have been an uphill battle during a mudslide. Plus, Microsoft gave (and is giving) Nokia gobs of cash, something Google wouldn't have done. Personally I think Nokia's strategy for adopting WP was sound, but that they shouldn't have pulled the rug out from under Symbian and MeeGo as much as they did, as there was/is still life in those platforms, as evidenced by the N9 and 808 PureView.

15. Whateverman

Posts: 3295; Member since: May 17, 2009

I don't know if I can agree with you on that. Give me stock Android in a Lumia 900 body and it's a done deal! If companies like Pantech, ZTE and Huawei can find success with you honestly believe it would have been an "uphill battle in a mudslide" for a company that was already the number one cellphone manufacturer on the planet? I think Elop is a mole! He joins Nokia in 2010 and less than a year later he kills off both Symbian and Meego, and Microsoft pays "Nokia" to adopt WP7 while many Nokia loyalist are begging for Android? Let's face it, Microsoft has basically been taken over by Microsoft. I don't know if that's good or bad for Nokia, but this alliance definitly is the real "uphill battle during a midslide" that you made reference to.

17. -box-

Posts: 3991; Member since: Jan 04, 2012

I don't disagree that Elop is suspicious, but at least he tried to give some direction. MeeGo was losing support with Android's success, Symbian would need one hell of an overhaul to make it work on next-gen devices, and Android is pretty saturated and doesn't offer much profit margins. Yes, ZTE, Huawei, Pantech, etc are making good phones, but they get lost amongst the Galaxies and Ones and RAZRs and other popular models, and there would have to be some particular feature to set the Nokias apart, and not just cameras and pretty bodies. Yes, a Lumia with ICS would be great, but it'd run relatively poorly with the single-core processor and half-gig of RAM, and Nokia doesn't have experience with super powered phones just yet. Besides, they may adopt Android in the future as sales build up just to regain top volume title, especially if it means stealing sales from apple

18. Whateverman

Posts: 3295; Member since: May 17, 2009

My friend, I so hope you're right! Not that I don't like WP7 (because it looks damn good!) but I would cancel my current contract in a heartbeat for an ICS Nokia. JK, but I really would like to see it happen.

4. aneelamdani

Posts: 20; Member since: Apr 16, 2012

apple leads because they revolutionized the phone, now in 2012 if you ask people, they buy because of either the hype or iphone or they are eager to buy an iphone as their first phone ever. this let them sell off in volume. a lot of my friends who owe an iphone are either going to htc or samsung. gsII being popular. plus now as they are coming along to know windows phone, they are thinking on to switch but there is no lumia range available in Pakistan so it stops the music for nokia

2. 09wbd03516

Posts: 140; Member since: May 30, 2012

No wonder siri prefer lumia 900...

1. taco50

Posts: 5506; Member since: Oct 08, 2009

I'm rooting for windows phone even though they have a long way to go. Apple kicks butt because of sound business practices. The crazy demand for iPhone allows them to sell at a premium price and still sell at a high volume. Usually high price hurts volume, but not in Apple's case.

3. mas11

Posts: 1034; Member since: Mar 30, 2012

I still think it would be better for Apple if they sacrificed their high profit margin for a device with stats that rival the high-end Android and Windows Phone devices. Say 2GB RAM, 1.5 gHz quad-core processor and a 4.3" 720p retina display. That would be an amazing phone.

5. deacz

Posts: 162; Member since: Nov 02, 2011

no that would be better for You, the end user not for apple.

6. mas11

Posts: 1034; Member since: Mar 30, 2012

True, but it would also be better for Apple, because it would improve the iPhone's image. A lot of people view the iPhone as a toy rather that a powerful high-end smartphone. It could go head-to-head (hardware wise) with the Windows Phone and Android "Superphones" if the next iPhone had the specs I mentioned. It would also boost market share because it would appeal to those who have to have the best specs. Another think Apple should consider is diversifying their lineup. They should make a high-end, mid-range, and low-end iPhone, like they do with their iPods.

7. taco50

Posts: 5506; Member since: Oct 08, 2009

People view the iPhone as e best smartphone out. No one views it as a toy other than some of the more fanatic fanboys on here. Do you realize iPhones dominate android in business? Obviously it's not a toy. It's not about specs, but performance.

8. mas11

Posts: 1034; Member since: Mar 30, 2012

Don't you think that the iPhone would be even better if it had the specs I mentioned? And I should amend my statement to some not a lot, sorry about that. Most ppl don't view it that way, but you do realize that the most popular children's toy of 2010, according to PC World, was the iPad. Yes I know it's a different device, but kids also use iPhones like toys. Btw i'm not trying to be an asshole and say it's a toy, that's just how kids view it. the_childrens_toy_of_the_year.html

12. Veigald

Posts: 290; Member since: Jan 13, 2012

The iPhone would probably be better with better specs, but what you need to keep in mind is that there will be a cutoff point where the added cost of components do not add sufficiently to the user experience. E.g. putting your specs into an iPhone wouldn't make much of a difference to an already fluid user experience. For Android the picture is different, as the OS simply isn't capable of running smoothly on less than stellar specs. WP is much the same as iOS, in that it runs smoothly on lesser hardware. What is an interesting point to note is that as WP gains market share, it will be increasingly profitable for manufacturers to make WP devices that run smoother than Android devices on cheaper hardware and thus might improve their profit margins.

20. taco50

Posts: 5506; Member since: Oct 08, 2009

It also has a 95% market share in enterprise. Kids love iOS also, but that doesn't make it less effective as a business tool.

9. Phullofphil

Posts: 1846; Member since: Feb 10, 2009

Some people feel that way but yes it is almost always the best in performance when released. But the 4s even though up there is not that superior any more. Even though with the simplicity of there OS it runs there operating system way mor efficient. The way android is you need way more processing power to run it as smooth. The galaxy s 3 is among some of the phones that is a lot better hardware wise. That's my opinion. I am using an iPhone right now lost my galaxy nexus. The only thing I personally think the iPhone kicks serious but is battery management. I love the fact that when I turn screen off on the iPhone I can turn it on hours later with almost he same battery percentage. I am gonna assume that the iPhone 5 is gonna kick but but by putting LTE on it it's gonna have to really find ways to make the battery kick but. So I expect no quad core but just like the s4 karate chip it does not need one. Since I get a phone every six months I plan on getting the iPhone six if it is actually a upgrad like the 4 was too the 3GS and not like the 4 too the 4s. Right now I am deciding on getting the sg3 when Verizon gets it.

11. remixfa

Posts: 14605; Member since: Dec 19, 2008

just one quick comment. Apple doesnt lead in battery life/management anymore. their trek into dual core land killed that, even with the underclocked 800mhz dual core on board. Battery tests done over at Anandtech show it mid pack in a group of androids.

16. gallitoking

Posts: 4721; Member since: May 17, 2011

so do we believe her actual iphone users or people doing test on them.. I have the iphone and give me great battery life I don't care what the experts say...

19. remixfa

Posts: 14605; Member since: Dec 19, 2008

i also can get 2 days on my old SGS1 with regular usage when battery tests say it lasts a day at best. Its all about how you use it, and how u set it up.

21. taco50

Posts: 5506; Member since: Oct 08, 2009

Actually iOS is much better at battery management than android. That's the trade off of no widgets and the difference in how they multitask. However some android phones now have much bigger batteries which allows better battery life.

10. Phullofphil

Posts: 1846; Member since: Feb 10, 2009

Oh and taco I realy think you can say some good comments sometimes even though your biased to the iPhone. I just hope that you can can have good coments non all the areas not just iPhone articals. I would like to see you be more open minded to other phones and be a fan to all smartphone tech and not just iPhone tech and stop trolling on others just for a reaction. It's old. Stop being so predictable and start saying smart coments like your capable of.

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