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5 Nov 2000, Spain

Hi,

I'd like to find out the actual cost to the manufacturer (Nokia, Siemens, Motorola, etc.) of a normal GSM phone. I'm guessing that it costs them about US $5 for an average handset, but have not been able to confirm this. Any suggestions on where I might find out this information?

Thanks,

Trajan

Dear Trajan:

You could try contacting the manufacturers directly, most of their web sites will have a customer service contact point. Go to their web sites and click on the "contacts" links. You could also join a discussion forum on mobile phones - take a look at www.topica.com or www.egroups.com and search for mobile phone discussion groups - and ask there..

You'll find there is not a simple answer to your question. If you just want to know the costs of the raw materials - plastic, silicon chips, wire, etc - the cost is very low, although probably rather more than US$5. On the other hand, if you count the costs of manufacture, design, research and development, marketing etc, the cost is probably in the region of 30-50% of the retail cost (my guess based on profits made by mobile phone companies and traditional retail mark-ups) of a mobile phone handset. You should note that many companies sell mobile telephones very cheaply but tie in a contract to use a particular telephone service for a set period of time. These companies profit from the service contract and lose on the actual cost of the telephone.

Good luck,

Dr. Ecommerce