Google Phone Costs $144 in Materials

LONDON (Reuters) -The first phone to be built on Google’s Android operating system, whichT-Mobile is selling for $179 in the United States, costs $144 for thecomponents and materials, research firm iSuppli said.

The T-Mobile G1, made by Taiwan’s HTC, has a touch screen and fullkeyboard as well as popular Google applications such as search, mapsand mail. And it is considered the most likely contender to the iconicstatus of Apple’s iPhone.

The company iSuppli said its "bill-of-materials" estimate, whichdoes not include costs for software, research and development,manufacturing or accessories, was based on a cost model rather than aphysical examination of the phone.

It has not yet conducted a physical teardown to determine whosecomponents are inside the phone, but said on Tuesday the G1 contained amultimedia microprocessor and modem core designed by Britain’s ARM.

As well, iSuppli said it believed the G1 was well above the industryaverage in terms of ease of use but still had a gap to close with theiPhone’s user interface.

It also observed that the phone’s industrial design and finish lacked the "wow factor" of slicker competitors.

"The G1’s… major advantage is its integration with Google Internetservices and its capability to accommodate the flood of freeapplications that are becoming available," iSuppli’s senior wirelesscommunications analyst Tina Teng said in a statement.

(Reporting by Georgina Prodhan; Editing by Sharon Lindores)