Nokia Gets Significant Profit From $20 Nokia 105

The Nokia 105 is the company’s latest low cost, basic handset that comes with Spartan-like features and a Lumia inspired design. For just $20 you can already get a phone that can make calls, texts and a few other extras such as an FM radio and flashlight. It’s got a 35 day standby time and has a dust-proof, spill-proof keypad.

Despite its low-end status and price of only $20, this device is actually making a profit for the company as revealed by the Teardown Analysis Service at information and analytics provider IHS. The report shows that the bill of materials (BOM) for the 105 totals to just $13.50 and if you factor in manufacturing costs this rises to $14.20. At a suggested selling price of $20 a unit the company is making a modest profit of around 29 percent.

According to Wing Lam, principal analyst for IHS, “By keeping features the same for nearly a decade, the Nokia 105 can integrate nearly all system functions into a single chip, dramatically reducing the cost to produce a cellphone. The 105 allows Nokia to participate in the [ultra-low-cost handset] market targeting specific regions and consumers.”

The Nokia 105 is designed for consumers in emerging markets which includes Africa, India and Latin America. It’s designed in the same mold as the Nokia 1100 line that has sold more than 200 million units since 2003.

The 105 however is cheaper to produce than the 1100 since it uses a single chip that integrates nearly all system functions. That chip is the Intel Corp.’s PMB7900 which combines the baseband and the RF transceiver enabling GSM/GPRS functions. The 105 has a total of only three integrated circuits compared to six for the 1100. Lam said that “This is the fruit of nearly a decade’s worth of integration. By riding Moore’s law and holding the line on features, Nokia has gone from six discrete integrated circuits (ICs) to just one core device plus two other ICs.”

Although the smartphone models of Nokia are getting much attention lately it is the non-smartphone models that account for 90 percent of the company’s shipments in 2012.

via fiercewireless

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