Nokia Corp. (NOK1V.HE, NOK) mimicked Apple Inc.'s (AAPL) holistic design approach to hold down costs on its Lumia 900 smartphone, resulting in less expensive electronic components than used in some comparable products based on Google Inc.'s (GOOG) Android operating system, according to industry researcher IHS iSuppli.
The Lumia 900 smartphone was supposed to help the once-dominant Finnish mobile phone giant make a splashy re-entry into the U.S. market. However, the company suffered a setback as a software glitch that causes the phone to lose its high-speed data connection resulted in its effectively giving the device away for a short period.
Senior IHS analyst Andrew Rassweiler said that with the Nokia's Lumia 900, a close collaboration with software maker Microsoft Corp. (MSFT) and chip supplier Qualcomm Inc. (QCOM) took a "page from Apple Inc.'s playbook by closely tying together the hardware and software to produce a full-featured smartphone that is based on relatively inexpensive electronic components."
"One of Apple's advantages over Android has been the company's complete control of both the hardware and operating system software, helping it to produce efficient and economical iPhone designs," Rassweiler said.
According to an IHS iSuppli teardown analysis, materials for the Lumia 900 cost $209. The cost rises to $217 when manufacturing costs are added. The costs of materials represents about 46% of the smartphone's retail price of $450, without a service contract.
In comparison, Samsung Electronics Co.'s (005930.SE, SSNHY) S II Skyrocket Android-based smartphone--which has similar features to the Nokia Lumia 900--carries materials costs of $236 and a retail price of $550.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com