The Power Behind the Palm Pre

The Texas Instruments Inc. (NYSE: TXN) OMAP processor at the heart of the upcoming Palm Inc. Pre could add several dollars to build-costs compared with similar processors in rival devices -- like the Apple Inc. (Nasdaq: AAPL) 3G iPhone -- but will also give the handset more multimedia muscle than current smartphones.

Palm is using one of the higher-end TI OMAP3 media processors in its new flagship handset. "The Palm Pre has the OMAP 3430," confirmed a spokeswoman from Palm in an email reply to Unstrung's questions on Monday.

This could add a few dollars to the overall cost of the phone but also add additional audio and video processing power, according to Linley Gwennap at semiconductor analyst firm, The Linley Group . He believes that Palm will be able to buy the OMAP3 chips at "$15 to $18" in bulk, although the "list price is closer to $25."

"I assume they're getting a significant discount," says Gwennap.

It is difficult to quantify exactly how much cost this will add to the bill of materials for the phone, compared to the iPhone and the High Tech Computer Corp. (HTC) (Taiwan: 2498) G1 Android phone, partly because the Apple media silicon is an ARM-based custom part built by Samsung Electronics Co. Ltd. (Korea: SEC).

Nonethless, Gwennap believes the Apple chip to be less costly as well as less powerful than the OMAP 3430. "I wouldn't doubt that the Apple processor is less than $10."

The folks at IHS iSuppli , meanwhile, peg the part's cost at $12. So there really isn't a huge difference in pricing between these components.

Yet, bill of materials cost is important in the cut-throat pricing of the smartphone world. Apple managed to cut costs with the 3G edition of its phone to $175, while the G1 even dipped below that bar at $144. (See iSuppli Prices the G1 and Apple Peels Away iPhone Costs.)

Still, there remain a number of unknowns in the Palm Pre pricing story. Palm hasn't said how much the phone will cost, and it is unclear how heavily subsidized the device will be.

Gwennap reckons, however, that Palm may not mind adding a few dollars to the handset's cost if it has a powerful multimedia contender to take on the iPhone and others. "They're trying to position it for a higher-end customer," he suggests.

— Dan Jones, Site Editor, Unstrung

joset01 12/5/2012 | 4:13:11 PM
re: The Power Behind the Palm Pre Thanks to the Journal of Turkish Weekly for picking up our Palm Pre piece!!!'


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