BlackBerry Z10 costs about $154 to make

Ian Hardy

February 17, 2013 10:52am

blackberryz10-18
The BlackBerry Z10 has been available in Canada for almost two weeks now. Several carriers have reported great demand for the new smartphone, but for specific sales numbers we’ll have to wait until BlackBerry’s quarterly report. As for the device itself, TechInsights recently took this gem apart and found similar specs to the Galaxy S III. Another report has surfaced that gives a greater breakdown of the component prices – which TechInsights states the Z10 costs about $154 (USD) to make:

– Display and Glass (4.2-inches): $26.50
– Qualcomm Snapdragon S4 SoC processor $23.50
– Cameras (8MP back camera and 2MP front-facing): $15.00
– 16GB Flash storage: $9.00
– Other components (battery, communication chips, RAM): $21.00
– Remaining materials such as the plastic casing: $59.00

The Z10 can be purchased in Canada for approximately $600 outright. This number doesn’t take into consideration all the marketing, research and design costs that BlackBerry spent to bring it to life.

Source: CNN Money
Via: CrackBerry

  • Sadness

    RIM could’ve done some damage if they had priced it at $350.

    • Will

      Definitely would have picked one up if it was in the 300-400 range.

    • JUST SAYING

      RIP OFF

    • eshizzi

      At a $350 outright & unlocked, it could have cannibalized the market. But then, everyone’s expectations would be that they produce lower cost phones in the market. It’s easier to lower prices than to raise them.

    • EvanK

      I know that I don’t necessarily speak for everyone, but in my experience Joe Average will be much more inclined to buy a phone if it’s free or cheap on contract. Don’t get me wrong, the Z10 truly is an excellent device, but pricing it free or $50 on a 3 year probably could’ve got RIM a fair bit more customers.

      Regarding the outright price, I certainly would’ve picket one up if it was selling in the vincinity of $300-400, but $600 is just too expensive considering that you can pick up a N4 for $350. And yes, I know that some people don’t consider the N4 “high end” because of its lack of LTE, but at the same time, you can’t beat the price.

    • Avoiding Banning of 3yr Contracts

      People would be willing to try BB ( the ecosystem) and the phone if they had priced it a $349.

      Pricing the phone at $499 (Koodo on Prepaid) is simply absurd. They took too long and most of their fans are gone. They need a critical mass to get the:
      more users-more developers-more apps- more users …ball rolling but BB and Microsoft seem to be out for lunch on common sense!
      Is almost like they are competing to see who releases the highest and most ridiculous price ( Z10 and surface, surface pro etc)

      -Meanwhile you can get an N4 outright at Virgin on $399, let’s just wait for Koodo.

    • Maniac

      What about years and years of software engineering and development? I didn’t see that cost included in there.

      That is why these “costs to make” articles are pointless. The software on the phone is by far the most expensive.

    • bob

      it would have been on par with the nexus 4, but with half the cores and an arguably crappier OS with less application and features.

    • Cody

      Makes me angry seeing things like this. They’re playing the apple game and robbing costumers blind..
      PASS.

    • Graeme

      It’s not just R&D costs, that price break down is just for components, so there is also the cost of manufacturing, there are a lot of people who get paid to put the machines together.

  • jim balsillie

    You get what you pay for.

  • Sean

    Blackbery had this is R&D for years so I bet that adds quite a bit to the price. But it would of been good if they hit a lower price to get units out there. As it is it is one of the most expensive on contract devices and i’m not sure if they can compete at a high price.

    • Avoiding Banning of 3yr Contracts

      The R&D is BB’s PROBLEM! I will buy the phone that covers my needs at the price I want to pay!

      Look at iphone (technically overpriced)
      Look at the N4 ( Technically underpriced)

      Both of them have something that people want, and that has a price.

      BB, doesn’t add much to the table compared to the other ecosystems AND on top of that is more expensive??
      FAIL!!

      -LOL to the Record sales for BB in the ENTIRE HISTORY OF BB ( Yes the entire three weeks!) in 3 weeks the non- manipulated figures will come out ( they will be high because BB counts shippings as SALES) then in April we will get the shipped vs SOLD units and BB won’t be able to spin that.
      Not to mention that the “FACE” of BB left with Balsillie. Now with Lazaridis as the face of BB, they should sell the Z10 at $349 outright or $$99 on a 2yr contract.

  • yerallnuts

    Of course you have no access to the real cists nor to what they pay to assemble it, package it, ship it and (as mentioned) develop and market it.

    However if it really cost $124 in parts, then the retail price is about right – 3x cost to wholesale. 5x cost to retail.

  • Raid

    Let’s be serious. How much do you think it costs to manufacture the very computer you are viewing this comment on? Or the TV that you watch? Any other electronic device for that matter.

    Hint: This isn’t a trick question.

  • R u Serious?

    Im sure they will lower the price drastically soon.
    Its going to be the Playbook situation all over again.
    After the initial rush, they are just going to sit on shelves collecting dust.

  • john

    It doesn’t take into account the cost of development or the promotion for it? Sorry but without that information this is pretty useless.

  • Arid

    RnD costs were probably low since they had iOS/android/wp to copy from – no extra research needed!

    • Shawn

      That’s hardly fair to say. BB10 may use some of the standard interface features that are expected in a modern touch screen smartphone, but they did put a lot of time and effort into this. I personally think it’s too little, too late, but I’m hoping to be proven wrong. I’ve used a Z10 myself, and I do see potential.

    • Rio

      Hmmmm, lets see. Apple spent 3.5 Billion on R&D in 2012, where as RIM Spent a whoping 1.5 Billion.

      Do you still want to continue this argument? Lets not forget the iPad was in development for almost 10years and out of that came the iPhone.

  • hubrod

    Yes and the SIII, IPhone 5, Optimus G, Sony Experia, and all other smart phones cost the same to make. So what is your point.

    • ehoustoun

      I’m not quite sure why you seem to be taking the defensive about that. It’s not uncommon at all for tech news to report the production costs of popular devices, I think the point is that this is the cost to manufacture them…whatever you infer from that is shaped by your biases.

    • Brad F(anboy)

      @hubrod I think the funny part is the reactions people have.

      Z10 costs $150: “Yeah, sounds about right. Business as usual. Nothing to see here.”

      iPhone 5 costs $200: “OMG APPLE IS RIPPING PEOPLE OFF! BOYCOTT APPLE!” [optional "GO SAMMIE!"]

    • Tomatoes11

      @ Brad fanboy

      Why am I not surprised that the isheep fail to see the difference. There are a lot of factors that make the pricing okay for Black Berry as opposed to Apple.

      First, the Apple markup is $699 each handset, not $599 like the Black berry markup. $100 difference per handset is huge.

      Second, Black Berry doesn’t have 100 billion dollars of liquid assets in the bank. Riddle me this. Who is most likely ripping people off more? The company with 100 billion in the bank or the company with 6 billion(or whatever they have)? If you answer the latter than I think you should go hang out with con artists.

      Third, Apple doesn’t spend much money on R&D at all. The Black Berry R&D numbers should be lower due to market size and one phone on their line up but as far as R&D per product ratio goes, Apple is by far the lowest. Nokia and Samsung spend 2 or 3 times more R&D than Apple which makes their prices totally valid but where does that leave Apple? Not in a very good light.

      So to recap. Apple spends as much on R&D as a small kick starter company, milk sweat shops dry for every ounce of savings they can get,have 100 billion in the bank from ripping off customers, milk suppliers for all their worth…

      and the STILL charge more for every handset than a company with nothing in the bank, has to pay full price to suppliers, that pours a good chunk of their profits in R&D for the good of the industry.

      So you tell me. Who is the rip off king? It’s not Black Berry and you sheep are encouraging their terrible practice.

    • Brad F(anboy)

      @Tomatoes11

      BB’s making 75% margin, Apple’s making 70% margin. But I guess we can ignore that.

      BB’s lack of cash isn’t Apple’s fault or problem. These are businesses, and clearly Apple is the better business. People buying Apple products don’t feel ripped off. If people thought Apple charged too much they wouldn’t buy Apple’s products and Apple would be out of business. Instead Apple is the most successful company in history, ever (except maybe the East India Company, but without the hostile monopoly).

      Apple doesn’t spend much money on R&D but manages to make much more substantial innovations (28 hours of LTE hotspot tethering? Unheard of before Apple did it). The amount of money spent doesn’t matter so much as the efficiency of its use. In terms of R&D Apple is one of the most efficient companies there are.

      Apple spends less but makes better stuff, meaning they probably spend more money on things that matter. Apple’s also the only major company trying to better the conditions in the factories, performing regular audits and even cutting ties with companies that violate their policies for underage workers or unpaid overtime. Never seen Samsung or BlackBerry do that with their underage factory workers.

      I guess being more efficient, making better products, and trying to help its workers is too evil. They should probably stop that.

    • Brad F(anboy)

      @Tomatoes11

      BB’s making 75% margin, Apple’s making 70% margin, but we can ignore that.

      BB’s lack of cash isn’t Apple’s fault or problem. These are businesses, and clearly Apple is the better business. People buying Apple products don’t feel ripped off. If they did they wouldn’t buy Apple’s products. Instead Apple is the most successful company in history, ever.

      Apple doesn’t spend much money on R&D but manages to make much more substantial innovations (28 hours of LTE hotspot tethering? Unheard of before Apple did it). The amount of money spent doesn’t matter so much as the efficiency of its use. In terms of R&D Apple is one of the most efficient companies there are.

      Apple’s also the only major company trying to better the conditions in the factories, performing regular audits and even cutting ties with companies that violate their policies for underage workers or unpaid overtime. Never seen Samsung or BlackBerry do that with their underage factory workers.

      I guess being more efficient, making better products, and trying to help its workers is too evil. They should probably stop that.

    • Tomatoes11

      @Brad Fanboy

      If you truly believe that crap, then the sheep are more hopeless than I thought. Go ahead and give Apple more money they don’t deserve.

      I’ll give you a hint. Apple is not moving this industry forward with R&D in any sense of the word. Efficient programmers and engineers cost money, so either Apple is not efficient with R&D, they just don’t spend on it or they severely underpay their engineers and developers because they aren’t getting the money. The Apple high level management is with their 100 billion dollars. You can’t magically have it both ways.

      It is quite disgusting how you actually believe what you say actually. Pathetic. You talk about them like they have godly abilities that somehow Microsoft, Sony, Nokia, or Samsung can’t do. You are kidding yourself if you think that because some of those companies supply most of the parts for Apple to even be able to make a phone.

    • KL

      @ Brad.

      This being a tech blog, I guess I really shouldn’t be surprised when people make up totally random figures to prove their point.

      The iPhone 5 cost $139.20 to make, not the $200 that you pulled out of your arse.

  • icyhotonmynuts

    Wait a couple months, it’ll drop to $300-$400.

    Just look at the Playbook. Six months down the line they couldn’t give it away at $80 when it first came to store shelves at the $400 mark.

  • Shawn

    BlackBerry needs to take some lessons from the gaming industry. When the 360 and PS3 launched in 2005 and 2006 respectively, they were both selling at a loss. The PS3 was selling at a loss of nearly $100 per unit. The result in both cases was a high number of sales that allowed them to make up the difference on software and accessories. I’m not saying they should sell the Z10 at a loss, but they SHOULD sell it at no more than 2x the manufacturing price. 4x is ridiculous.

    • andy c

      RIM would be dead a week after launch if they sold this at break even or a loss.

      1. unlike the gaming industry they can’t charge 50 – 70 per app.

      2. even at $.99 every Z10 buyer would have to buy at least 100 apps or content if RIM even attempted to sell this close to break even.

      3. considering point 2 is there 100 apps worth paying for in the BB app world?

  • Jonah

    They can keep the off contract price at 600 but they should have made it free on a full contract. Making it nearly 200 before early upgrade fees makes it highly unlikely I would get it. In fact that’s what happened. I got an LG Optimus G because its upgrade cost and specs were better then both BB and SGS3.

  • 2cent

    i a gree with @hubrod, Yes and the SIII, IPhone 5, Optimus G, Sony Experia, and all other smart phones cost the same to make. So what is your point.

  • Temi

    They should have sold it for quite a bit less, then maybe put out a better quadcore version months later after grabbing some market share. They aren’t likely to be able to compete with what is already out there and established, not with this phone.

  • Dr.Hugo

    There is a huge mark up on all phones , what do you think it costs Apple to build the iphone in china ? I would guess pretty much the same as the BB10

  • Raid

    If you want to blame markup, blame it on the cartel also known as the service providers who put the high markup on the phones they sell. It’s always been known, but in the case with the Nexus 4, it became blatantly obvious.

  • Raphael

    We all have to take in the account for the labour, the design and upkeep for the services it is running. Software is jot free to upkeep therefore what they make goes to production and upkeep. It all makes sense. Then I phone being priced at 800 to a thousand is just wrong. If you see they make billions bin profit…. If they can afford billions why not lower the price of their phones? Makes sense right? If you’re already rich, why be more rich when you can share the fun with others by putting a smile on their face with a lower priced phone.

  • saffant

    They never count the software and coding price on this.

  • Don Johnson

    Anyone want to buy as slightly used Iphone 5 32G, Got my new Z10 from telus for for $19.00 on 3 year ( 139.00-80-50+10, trade in, Telus instore credit,new sim ) went over to Futureshop bought a 64GB MicroSD card on sale for $60, now I have a 80GB awsome phone. I couldn’t bring myself to pay what they wanted for a Iphone 5 64.

    • MikethemaN

      You better keep ahold of the iphone for a bit. The new gadget fad will wear off quick, amd youll be yearning for the buttery smoothness of ios in no time. The trick here will be to sell the z10 quick b4 its a widely known failure and make a few bucks. Wait a few onths and your likely to get next to nothing for it…

  • tomatoes 11

    I’ll get one during the RIP BlackBerry sale.

  • R.I.P Rim seriously this time.

    i guarantee the real sweat shop cost is $45 at most. you really the cheap feeling z10 is made from premium parts. no gorilla glass in 2012 and 2013 is simply ridiculous

    • Dr.Hugo

      Let me guess your bored and decided to troll a BB story , my friend you really need to get a life because your getting pretty pathetic

  • KID ANDROID

    It’s funny to read all the ppl saying it would have done good at a lower price, hello it’s sold out in most places so it’s doing just fine at the price it is. They aren’t going to take a loss like Google on a device because they aren’t doing what Google has up their sleeves. The Z10 will not be dropping in price like the play book at all so if you want one don’t wait oryour going to be waiting for ever. – ANDROID ( Team Android Canada)

  • Mike

    It means nothing to be “sold out”. Nexus 4 was “sold out” for weeks because they did not stock enough quantity. It’s all marketing gimmick like lining out outside of a nightclub. It gives that impression of “demand” which actually reflects no truth the real demand.

    Other manufactures can take their chance. However, BB10 is a do-or-die type of last opportunity. They obviously do not see it and try to aim for the same type of business model from iPhone. LOL… Apple can force everyone to change their SIM card, TWICE! First Micro and then Nano… Blackberry, do you really think you are in that position?

    It’s no wonder their own founder / ex-CEO has sold out all this shares because the inevitable bankruptcy occurs. I give them another 2 years.

    Sad… those people just don’t get it.

  • TouchMyBox

    @Raid

    TVs are a famously low-margin business.

  • xenrobia

    The cost of manufacture + the cost of R&D and marketing + a Profit (yes they are in this business to make money). Then the service providers will set the out right purchase price at a level that will make a long term contract appealing. So if you must complain, then complain about the service contracts because that is where you are really getting hosed. A voice with a 6GB Data plan like I have will cost a new subscriber about $120/month – that’s $1440/yr and $4320 over three years. And people whine about paying$650 for a phone?

  • WSK

    You know, the salaries of RIM’s employees have to come from somewere!

  • Happyboy

    I’m not convinced that BlackBerry is for me

  • rockman

    R&D should be considered.

    That said, I wish they launched at low prices to buy direct like people can at Google’s Play Store.

    Need to touch the market from different points, not just through carriers anymore. BB10 you need to be more aggressive, not just prove you’re a great device.

    Hoping for the best for BB.

  • foneguy

    I can’t believe that someone would equate the cost of the parts to the retail price. This has nothing to do with the per unit price. Are you forgetting research and devolopment costs, manufacturing costs, LICENSING costs, shipping costs, profit margin, and retail markup.
    When Blackberry uses a technology, like for example Flash, they pay Adobe a royalty, or licensing fee for each device they make, nad same goes for Java, and all the other technology they license from outside vendors. This adds to the cost.

    It reminds me a few years ago, when looking at electric car technology, and some clown wrote that GM was ripping people off with the volt because they priced out the electric parts, and bolted it onto a cruse. They figured the car should be about 30 grand, not 42. Forbes then ran a story, where they factored in the R&D figures, and they came up with 70 grand per unit.
    So the actual part cost is nothing. Same goes for every other electronic device you own. The componet cost is probably 7-10% of the selling price max.

  • Avoiding Banning of 3yr Contracts

    Regarding:
    “It’s easier to lower prices than to raise them..”

    -“It’s easier to survive as a phone-company, when you sell phones!”

    -Don’t believe me? look at the Playbook.. They took too long to drop the price and then the $200 tablet-segment emerged.

    Now even at $129 people simply decide to get a Galaxy Tab2 at$149 with Jelly Bean and more support to come….

    If they don’t drop the price and FAST the users will do a “Ballsilie” and simply walk away from the company.

    -All they have to do is re-posision the Z10 as a mid-range phone ( not a flagship) price it at $349 and make some money get a customer base and survive this yr. The Q10 should be $249. Then if they survive; next yr they can release a real Flagship phone.
    Good luck Balsillie; I mean BB!

  • Ken

    Greed is the word and BS is what you will get as to why it costs so much. Now if it was a $600.00 zipper for my mother in-law’s mouth that would be worth it. Smartphones are overpriced and the carriers know how to work this to there advantage with 2yr and 3yr contracts and there fees, in short legalized thievery. Buyer beware.

  • Kevin

    Really loving my Z10.

    Sorry complainers – Blackberry (and Apple and Samsung) have to make their money. Rather give it to a Canadian company that supports Canadian jobs and technology any day!

  • John

    Everyone here says “research and development” would rack on to costs yet you guys seem to be oblivious to the fact that BB10 is pretty much a copy of other operating systems:
    iOS – the static row of icons 4×4
    Android – similar pull down menu and ported applications
    Windows Phone – Live Tiles/ Active Frames?
    MeeGo – Swipe interface and similar home screens on the Nokia N9.
    Symbian Belle – bottom bar (almost identical)

    Now don’t get me wrong, I think BB10 looks great, but it’s an obvious combination of other operating systems. No, I am not trolling, I call it as I see it.

  • Sweet

    There’s a lot of BS being thrown around here, so allow me to clarify (these can all be verified online):

    – TVs, laptops, desktop, etc. are all notoriously low-margin products.
    – Samsung’s telecomm unit reported a profit margin of 17.8%
    – Apple’s profit margin on iPhones is 38%
    – Apple spent $3.4B on R&D in FY2012, an increase of $1B over FY2011

    – Google can afford to sell a phone at a loss because they make money from the sale of apps for those phones as well as ad revenue for that phone. Thus, like Sony and the Playstation, Google sells the devices at a loss so they can make even more money in ads and app revenue. BB can only gain app revenue, since as far as I know, they don’t have an ad platform. So they cannot sell the device at a loss or they’ll be out of business in no time.

    – if the Nexus 4 costs the same as a Z10 to make, and Google is selling them at a loss when they sell them at $350, then that means that the Z10 costs (parts, R&D, marketing, packaging, distribution, support, facilities, etc.) more than $350.

    – it’s the carriers that are screwing you with their pricing. No independent phone retailer can compete with the carriers when the carriers are selling the phones at less than half the wholesale cost ($140 when you sign a 3-year contract). Telus charges $650 for the Z10 and Koodo charges $550. Same company operating the same network.

    – the only way for the price to be controlled by market forces (as with TVs, laptops, etc) is to have price competition. But that’s not possible because the carriers are not competing with each other and they price their devices such that nobody else can compete if they wanted to. I suggest we kill the carriers. :-)

  • screamer

    Why nobody understand? The carrier make the price. Let’s say they asking 249 $ for the phone who would sign up for a contract? Hm nobody right? That’s why they do that becomes they are getting more money. We see it with the nexus 4 no big carrier has it in there system or asking for to much money for it.

  • Androidonian

    Not only have they over priced the hardware, add to this the hidden cost within your monthly rates that Blackberry charge the carriers. For consumers around $72 a year ($6 monthly) and for corporate through BES around $96 a year ($8 monthly). Also @Raid carriers do not put markup on devices, this is what Blackberry charge I know I used to work for a Canadian carrier.

  • LeafsFan77

    Additional cost not listed is R&D and patent licensing. Patents can be expensive especially for Dolby, Nokia, and whom ever else BB did deals with.

  • Awkward Turtle

    I guess RIM, or Blackberry as they now call themselves, was tired of eating losses.

  • obvious

    I am dumbfounded by these comments, the cost of the hardware, is just that, it doesn’t pay for the staff, marketing, field reps, shipping costs, repair costs, call centers, utilities. Companies need profit, and the device is worth paying for. All you i****s that want it on a 3 year, are probably the same looking to ban 3 years on the crtc national code for wireless services. Half the people out there buy a phone on a 3 year and think its the same to replace the device they so stupidly smashed the screen or dropped it in the toilet. The discount provided on the 3 year contracts are paid for by the carriers, not RIM…err Blackberry. The carriers eat this cost in hopes they make it back on their monthly fees (less the cost of their marketing, staff, utilties, etc). Get a clue, everything you buy has a markup. #StupidCommentsDriveMeNuts

  • screamer

    Carriers makes the prices for the phones because if phones are 240 – 350 $ who would sign up for a contract? All the same and if somebody goes cheap they don’t put it in there system like the nexus 4.

  • Sweet

    T-Mobile announced that they are going to stop subsidizing phones this year. Last year Rogers CEO said they are investigating ways to reduce their reliance on subsidies.

    Phone subsidies are hurting the industry and preventing independent phone retailers from existing or offering a price that’s between wholesale and the outright price offered by the carriers. In other words, subsidies prevent the customer demand from driving down the price of the phones.

    Subsidies are the big problem, not 3-year contracts.

  • Spiders in my urethra

    Apple iPhone 5: $699 to buy, $207 to make = 238% markup
    Blackberry Z10: $599 to buy, $154 to make = 289% markup

    I won’t deny the reality of Apple tax, but when even an iPhone is marked up less than your product, you should seriously re-evaluate it. Once BB has rebuilt the cachet they had in 2008, maybe they can justify these kinds of prices.

  • Sweet

    The iPhone components cost $139 per phone, based on a physical teardown of an iPhone. The $207 figure that is often quoted comes from a VIRTUAL teardown of the iPhone done before the iPhone 5 was available.

  • Oldschool

    Seriously MS, you knew what was gonna happen when you threw up this article on a slow Sunday. Pure troll fodder, and it worked.

  • sak500

    NOt worth it.. I’ll stick with my SIII till SIV hits.

  • D

    For “technical” people aka the people that read and post here, you would think there would be some level of intelligence… but after reading the comments here it’s at least 50% i****s. First understand that no one cares what the outright price is because 99% buy them on a contract. So the comments that says @350 this thing would have sold like crazy are BS. Then there are the people that are only looking at their own money and think rim is greedy… I think Ferrari is greedy why would they sell me a car at the hardware cost. They probably cost $25k to build, why can’t i get one for that much! This is crap. Stupid Ferrari..RIP Ferrari… now doesn’t that seem like a ridiculous comment?

  • sp

    everyone who keeps posting about the N4 just please get your N4 and stop bringing that fact up.

    go to Fido/Wind/Mobilicity etc etc whoever carries the N4 and get it from them out right for your 350. try it.

    you CANNOT compare that phone to anything out in the market at this point. if thats the case please compare the N4 to the iPhone 5 or the imminent iPhone 5S .. make sure to compare it as well to the S4 or the Note 3. Outright prices for those should be on par with everything else in the market that is NOT subsidized by the maker.

    such garbage comparing it to other phones in the market that are not heavily subsidized by the maker.