Unmaking Motorola's Q

BusinessWeek covers the the iSuppli tear-down analysis of the Motorola (MOT) Q. According to iSuppli, "it costs Motorola about $158 to build the phone. That includes components and assembly but excludes other expenses such as marketing, distribution, and licensing fees to Microsoft (MSFT), which makes the phone's Windows Mobile operating system."

Currently Verizon Wireless, the joint venture of Verizon (VZ ) and Vodafone (VOD ), is the only nework operator to offer the smartphone "at a heavily subsidized $199 with a two-year service contract, and $349 with a one-year contract."

Andrew Rassweiler at iSuppli noted that "the Q's single most expensive component is the LCD display" at a cost of $25." Rassweiler said, "Whoever made it didn't want to be identified."

Sources of other parts of the Q include:

• Intel (INTC) has two parts in the phone, a $19 XScale microprocessor and a flash memory chip. The XScale chip is produced by the unit of Intel that is being acquired by Marvell Technology (MRVL).
• Qualcomm (QCOM) supplied a chip called a digital baseband processor (about $14) that helps the device connect to digital wireless networks. Rassweiler said the "Q phone marks the first time he's seen that particular Qualcomm chip."
• Qualcomm supplied four other parts, including a power management chip. Other suppliers included Texas Instruments (TXN); Broadcom (BRCM), which supplied a Bluetooth chip; Freescale Semiconductor (FSL), which supplied a USB chip; and M-Systems (FLSH), which supplied flash memory chips. Micron Technology (MU) supplied the CMOS imaging chip, and Skyworks (SWKS) contributed two power chips.

According to the artilce, "the materials and manufacturing cost of the Q is higher than that of RIM's (RIMM) current flagship handheld device, the Blackberry 8700. The 8700 cost about $123 to make, and it sells for $299 from Cingular Wireless."

iSuppli has not yet done a tear-down of the Palm (PALM) Treo 700.