>Andrew Cowan wrote:
>>
>> </lurk>
>>
>> So how much do cell phones cost to manufacture?
>>
>> <lurk>
>
>That, my firend, depends on how many they make... which in turn,
>depends on how many are actually sold to consumers... which, of
>course, depends on how much they cost (which is slightly related
>to how much the carriers can make from the average subscriber).
>That disconnect or preception gap, between how much carriers can
>make and how much the consumer *thinks* the cell phone will cost
>them, is part of the sales grift used by the industry.
>
>The folks who can give you the closest "answer" to your question are
>the carriers, who know, from usage statistics, handset activation
>rates, pre-pay card registration, handset age/model, feature usage
>matrix and contract duration of their subscribers.
Most carriers guard their subsidy figures as business secrets. In fact, if
you want to get funding for a mobile service provider business in a
perticular market, the first question investors will ask you, is "how much
are your susbsidies?" because it is the single most important cost factor.
But you can still get a clue by simply looking at the figures.
RRPs for most handsets are in the order of 200-500 USD. Lets assume a 35%
margin, that would give us a range of 150-370 USD. In some markets the
lower end phones are given away for 1 yen or 1 dollar or 1 pound etc.
Operators are likely to pay the 150 USD as a subsidy plus two months worth
of revenue to the outlet that "sold" the handset, assuming the average ARPU
for OECD countries of roughly 35 USD, that leads to a subsidy of 220 USD
for the giveaway handsets.
On the more expensive ones, they may be sold for 200 USD but cost -say-
370, leaves again 170 USD to be picked up by the operator plus two months
or revenue to the outlet that "sold" the handset (and the contract), which
in this price category may actually twice the average ARPU or higher, -say-
140 USD, so the subsidy is about 310 USD.
This cost may be offset by recalling old handsets and selling them to
refurbishing companies (i.e. www.recellular.com) which clean and test them,
sometimes give them new casing and sell them to markets where operators
cannot afford to pay anywhere near the price of new handsets. But th
refurbishers need to make money on them and they usually sell handsets in
the order of 25 USD to 75 USD, so don't expect them to pay more than 5-25
USD for a recalled unit.
regards
benjamin
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Received on Sat Jul 28 11:47:07 2001