The Real Cost of High-Tech Products

You paid several hundred dollars for your super-cool new phone, not to mention that service contract you signed. But how much is your smartphone or tablet really worth?

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BOM vs. Retail

Let’s start with the much-talked-about iPhone. Parts estimates come from teardown firms such as TechInsights (formerly Portelligent). Product teardowns are pretty much what they sound like – someone systematically disassembles the product while recording each step and calculates the cost of materials (also known as the bill of materials, or BOM). Firms like this charge quite a bit for these reports, which average around 100 pages, as tech companies often use them to determine what their competitors are up to.

In the case of the iPhone, according to wireless experience management experts (WDS), you pay an average of $610 for the new iPhone. The teardown reports show that the BOM is around $203. The estimate includes $26 for the A5 processor and $31 for the Retina display, which Apple touts as the highest-resolution screen ever.

Its larger cousin, the iPad 2, has a BOM of $336.60, if manufacturing costs are included. The starting price for you on theApplestore is $499 without service – going up to $829 for the 64GB with Wi-Fi+3G.

The little guy, iPod Nano 8GB version, starts at $129 on the Apple store. The BOM comes in at $43.73.

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Moving into non-Apple devices, the HTC Android Incredible™ has a BOM of $163.35. The manufacturing cost is $8.90 – bringing the total cost of your device to $172.25. The price you pay starts at $529.99.

The BlackBerry Torch™, the first BlackBerry device with a QWERTY slide-out keyboard, OS 6, and faster browser, will cost you $529.99 at Best Buy. Its BOM is $171.05.

Hanging up the phones, the Kindle Fire™ sells for $199 on Amazon,  while its BOM is $201.70. [12] Whoops, they aren’t going to make any money that way – or are they? Amazon reportedly does not make much money on the device itself, but what you download to use on the device more than makes up for it. Between books, MP3 music, and the AppStore, it’s estimated that Amazon is averaging $136 in downloads for each Kindle Fire sold.

The Samsung Chromebook™ costs $332.21 to manufacture. Google’s version of the notebook will cost you around $500.

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This is just a sampling of devices, yet you can see a definite trend. Outside the Kindle™, the huge price gaps may make your blood boil, but there are other costs above and beyond the manufacturing of your device that you may want to consider.

The Most Expensive Part

It may seem like the manufacturers are making a killing off of a bunch of plastic and wires, but there is an element that you do not see. The most expensive components of all come before the product is ever made: research and development. Once it’s built and tested and passes the muster of the FCC, your device may have cost millions before it was ever made. It’s a gamble that tech companies must make, but one that is obviously paying off if you consider the likes of Apple’s $7.31 billion profits in the third quarter and $6.62 billion in the fourth quarter of 2011.

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Connectivity Costs

Actually, you aren’t really just buying plastic and wires; you’re buying functionality, design, and not just a little bit of hype. Now we know that what you spend the most on is not the device itself, but the cost of using that device – your service plan. Why do you think that they are willing to discount the price of your device (and sometimes even offer it for free)? Service providers make all that back and so much more over the course of your contract. In fact, according to Bill Morelli of IMS Research, service could be up to 75% more than the cost of the device.

To illustrate this principle, let’s revisit the iPhone. According to the Apple store, you may buy the 64GB version for $399 when choosing a network carrier. If you want it unlocked and contract free, the same model is $849.

The Price of Technology

As you can see, when it comes to mobile devices, the whole is definitely worth more than the sum of its parts.

7 Tablets that Aren’t the Apple ® iPad

It may seem that Apple® has a stranglehold on the computer tablet genre – but there are actually many to choose from, each with unique and attractive features. Let’s see what 2012 has offered by way of non-iPad tablets.

Asus® Eee Pad Transformer Prime

Price starts at $499.99

Probably the closest to the competition, as its design was inspired by the iPad 2; the Asus® offers a thinner body at .32 inches. As one of the Android™ offerings, it sports the latest of the candy-shop named operating systems, Ice Cream Sandwich (as of January 2012).

Critics are impressed with the 8-megapixel camera (on the back), which can record 1080p video. It has a 1.2-megapixel camera on the front. Though it sports phenomenal cameras for a tablet, it lacks GPS.

The Transformer comes in amethyst gray (which is sort of a purplish color) or champagne (a silvery-gold). For a little more (about $150), you can attach a keyboard/dock, including a touchpad and a full-sized SD slot, making this tablet almost as functional as a laptop.

Other specs:

  • 10.3 inches wide
  • 1.3 lbs
  • MicroSD slot
  • Micro-HDMI port
  • Quad-core Nvidia Tegra 3 processor
  • 1 GB RAM
  • Choice of 32 GB or 64 GB
  • 802.11 b/g/n Wi-Fi support
  • Bluetooth 2.1+EDR
  • Gyroscope
  • GPS

BlackBerry® PlayBook

Price starts at $499.00

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One of the little guys, the PlayBook is a 7.5-inch wide tablet that employs RIM’s newest operating system. The goal, says RIM, was to create a more professional alternative to the Android™ OS. Critics say it is powerful, it just isn’t intuitive. There is a pretty steep learning curve.

For about $69 more, you may add the optional charging doc, which allows Micro-USB for both charging and sync. It is also Micro-HDMI capable, though the cable must be bought separately.

Other specs:

  • 7-inch screen
  • 15 oz
  • .4 inches thick
  • 3-megapixel camera (front)
  • 5-megapixel camera (back) – 1080p video capture
  • Ambient light sensor
  • 802.11 a/b/g/n
  • Bluetooth 2.1 EDR
  • 1 GB RAM
  • Dual-core processor
  • Choice of 16/32/64 GB

Samsung Galaxy Tab 10.1

Price starts at $399.00

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Another Android™ offering, the Galaxy is the same depth (at .34 inches) yet lighter (at 1.24 lbs) than the iPad 2. This one is a Google Experience tablet, relying on the Honeycomb 3.1 OS.

Unfortunately, there are no USB or HDMI ports on the Galaxy, nor can you use SD or SIM cards. Oops.

Other specs:

  • 10.1 inch screen
  • 2-megapixel camera (front)
  • 3-megapixel camera (back)
  • 16 or 32 GB system
  • 1 GB RAM
  • 802.11 a/b/g/n
  • Bluetooth 2.1 EDR
  • GPS receiver w/Google Maps

Sony® Tablet S

Price starts at $498.00

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Sony’s tablet also uses the Honeycomb OS, as well as several exclusive apps and even has PlayStation® certification for mobile gaming (but what other tablet would?). It’s the hardware that seems to get the most attention, in that it has more of a wedge shape, rather than being flat like its competition.

Something really cool: the universal IR remote that may control your home electronics. The software turns your tablet’s screen into a very familiar remote control interface that mimics Sony’s HomeShare premium universal remote.

Complaints seem to revolve around the proprietary charging adapter and low screen light. Still, the tablet in general gets pretty good ratings in reviews.

Other specs:

  • 9.4 inch display
  • 32 or 64 GB
  • 1 GB RAM
  • NVidia Tegra 2  processor

Amazon Kindle Fire

Starting price: $189.99

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Another 7-incher, but coming in at about $300 less than the bigger boys, the Kindle Fire truly wasn’t meant to compete with the other tablets. It is in a class of its own. The main functionality of this tablet is entertainment, and that entertainment is to be done Amazon-style. The Kindle Fire does come preloaded with Amazon-friendly Android™ apps such as Pandora®, Netflix, Hulu, and – of course – Amazon’s Kindle and MP3 stores.

Why does it cost so much less than all the others? Simple – you get no 3G, no cameras or microphones, no GPS, no Bluetooth. You only get 8 GB of storage, and no expansion slot. You must have a subscription to Amazon Prime. That’s a lot of concessions, but it’s still selling pretty well.

Other specs:

  • 4.7 inches wide
  • .45 inches deep
  • 14.6 oz
  • Dual-core
  • 802.11b/g/n

Barnes & Noble Nook Tablet

Starting price: $246.09

Another 7-inch tablet with no GPS, camera, or Bluetooth, the Nook Tablet™ has a little bit more to offer than its cousin, above, and thus costs a little bit more. It, too, runs on Android™ software, The Nook™ gives you a bit more memory at 16 GB. Its distinguishable loop in the bottom corner covers a memory card slot, another offering unavailable in the Fire.

Other specs:

  • 5 inches wide
  • .5 inches deep
  • 14.1 oz
  • 1 GB RAM
  • MiniSD
  • MiniSDHC
  • Can support 32 GB
  • Dual-core

Toshiba Thrive

Starting price: $479.95

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Another tablet running on Honeycomb, the Thrive offers a lot of the same software features as other tablets. It does offer two very different hardware features, however: textured back panel that makes it easier to grip, and LED lights on the bezel.

While the Thrive is bulkier than other tablets at .63 inches thick and weighing in at 1.66 pounds, you might say that it makes up for it by offering a full-sized USB port, SD card slot, HDMI support, and – something we haven’t seen yet – a replaceable battery.

Other specs:

  • 10.1 in TFT active matrix – LED backlight
  • 32 GB
  • 1 GB RAM
  • NVIDIA Tegra 2 processor
  • Dual-core
  • 5-megapixel camera (back)
  • 2–megapixel camera (front)
  • Bluetooth 3.0 HS
  • 802.11b/g/n
  • GPS receiver

Between size, shape, color, software, memory, ports and other features, you should be able to find the right tablet for your needs. While 80% of the 7.5 million tablets shipped in the first half of 2011 were, in fact, iPads  – the market is shifting.  You now have a vaster array of applications and functionality to choose from, so don’t settle. Have fun shopping!

10 Products from the Future that You Can Buy Today

It used to be that one would turn on The Jetsons to see futuristic flying cars while supercomputers were just a fantasy. Now these products are not so far off in the distance, and some are starting to emerge. They may be only affordable to the über-rich, but tomorrow is here today. Below are 10 products from the future that you can buy now.

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1. The Flying Car – Thanks to Hammacher Schlemmer, the wait is over for the flying car. Within 30 seconds, this vehicle transforms itself from a typical cart to a Light Sport aircraft. The car has a 100-horsepower, 4-cylinder engine with a maximum airspeed of 115 miles per hour. The flying car is perfect for day trips to Martha’s Vineyard and Long Island. The price: $350,000.

2. Seabreacher – Jet skis are no longer needed with this dolphin-shaped power boat. The Seabreacher was designed for recreational boating to allow the user to submerge and launch into the air, just like a real dolphin. Customized options are available to personalize the boating experience.  The price: $48,000 for a base model and close to $68,000 for the high-performance model.

3. BeoVision 4 Plasma Television – Go to the movies in your own home with Bang & Olufsen’s 85-inch plasma television. The 3D plasma screen comes in 85 or 103 inches. It features a screen that lowers when you’re not watching, utilizing a built-in camera used to check the screen after every 100 hours of use to adjust the color balance. The price: $85,000 ($1,000 per inch of viewing picture).

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4. Vertu Constellation Quest Smartphone – Nokia’s Vertu division created a super-luxury Constellation Quest cellphone for the Hollywood elite. The phone features leather and sapphire keys, and it runs Nokia’s Symbian operating system. It also includes a loudspeaker with dual sound ports, a display with 16 million colors, a keyboard with 11 languages, and exclusive ring tones from the London Symphony Orchestra. The price: $8,299.

5. Water Jet Pack – This water thrusting jet pack helps one realize dreams of personal flight and promises freedom, exhilaration, and adventure. The Jet Pack can reach more than 30 feet high and reach speeds of 29 miles per hour. Every piece of equipment sold comes with a personal training session. The price: $130,000.

6. Cars That Medically Diagnose – What sounds like an idea from science fiction is actually real science and car technology combined. Ford® Motor Company is already releasing cars with cloud-based health monitoring tools built into the cars. Using FordSYNC technology, your Ford® car will also become your second doctor. The car features the ability to relay pollen alerts for allergy sufferers, to monitor heart rate via built-in heart sensors on the driver’s seat, and track glucose in the blood to help diabetics monitor their insulin levels.

7. Robotically Controlled Cars – Is the United States ready for an invisible driver? The state of Nevada may soon see computer-controlled cars. Google and the Toyota® Prius team are working together on a car that actually drives itself while the owner sits in the passenger seat. And good news for the passenger: The “distracted driver” laws do not apply to the robot driver. This invisible-driver vehicle is already built and being tested on 140,000 miles of California roads.

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8. Electric Folding Bike – The YikeBike is not an ordinary bike. It is a foldable electric, 2-wheel bike that weighs a mere 21 pounds. The bike not only has built-in LED lights, it also has a comfortable leather seat. The price: $4,860.

9. Lawn Mower Robot – Tired of mowing the grass every weekend? Consider the fully automated solar-powered lawn mower robot. This mower uses solar power to charge itself. It features technology to climb slopes, identifies its routes, and moves around obstacles. The mower was built for both home and commercial purposes. The robotic mower can also store all the grass cuttings or redistribute them on the lawn.

10. Solar Powered Phones – The Samsung Blue Earth Eco-Phone is a mobile phone made of recycled materials, including the plastic from water bottles. It contains a solar panel on the back to keep the phone charged. The handset and charger are free of toxic materials and chemicals. The phone also contains a large touchstone screen, has Bluetooth capabilities, and can conserve energy with the eco-mode capability. The price: approximately $447 without a service plan.

From jet packs to flying cars to solar powered cell phones, the future is here. The products continue to get more exciting, even if the prices are a little steep.

How To Live a Techie Lifestyle on a Shoestring Budget

Just because you don’t have the highest paying job doesn’t mean that latest gadget launch hasn’t caught your eye. It can be difficult to stick to a strict budget when there are so many new products on the market, but fortunately, there are ways to get a hold of those flashy new gadgets without spending a fortune or resorting to cloak-and-dagger deals with strangers.

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Lease to Own

For higher-priced goods, it’s possible to do a monthly payment system where you choose the product you want, open an account with the company, and then make monthly payments. These can be done automatically from your debit or credit card, making it very easy to get exactly what you want. It’s also more affordable for those who have difficulty getting together the money for a larger purchase.

Sometimes it’s just easier to pay monthly rather than in a lump sum. You can lease the product for as long as you want it, with very few restrictions. When you’ve leased the gadget for a certain amount of time, in some cases, it becomes your property, and no more payments are necessary. When there are new products coming out every few months, this can be a good way to get the enjoyment of the products without having to buy everything that comes out.

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Fix It

You shouldn’t discard damaged or broken tech so quickly. Instead, consider fixing it yourself. Repair costs can rack up to more than you’re willing to spend, especially when it comes to phones, tablets, and computer equipment. In some cases, it might be best to cough up the cost of a repair as opposed to digging through wiring and various other components. However, if you’re able to muster up the courage to complete the task yourself, you can at least save on the labor cost, if nothing else.

First of all, don’t be afraid you’ll break anything. Consider yourself a technological guru for just a brief moment, load up Amazon.com, and start purchasing the parts you need, as well as any tools necessary to crack open and repair the device. You should think about consulting YouTube as well for a video guide of a professional repairing your specific device, like this one for iPhone users.

Don’t be afraid to take the reins, no matter what option you choose. There’s no such thing as too small of a budget with so many ways to afford great tech. Whether you’re paying monthly, or just fixing your old devices, you can at least say you considered all your options and made the best decision for your budget.

The Secret World of Apple Product Development

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It’s lighter, it’s thinner, and we think it has more amazing apps… We know that the next Apple® product is going to rock our world – we just don’t know what it is yet. Apple’s campus in Cupertino, Calif., has become an Area 51-like vortex of secrecy. Why does Apple keep us in the dark? And what is this strange fascination we have with the next great Apple product launch?

Secrecy in the business plan

Apple has a world-famous non-disclosure agreement (NDA) that severely limits every employee, vendor, and partner from leaking anything – anything at all – about a product before it is launched. Secrecy has been built into both the business and marketing plans which were set forth by Steve Jobs himself. In fact, the whole company is so shrouded in secrecy as a rule that even the NDA itself will never be revealed. The Apple mystery makes for some truly innovative concepts both in products and the marketing of those products.

A different animal

First of all, the company is run differently than others. According to Adam Lashinsky, author of “Inside Apple,” Apple has a very different process for product development than you would see at other companies. In fact, the entire process from conceptualization to launch is quite different than what a traditional company would even allow.

Matthew Panzarino outlines the process for us in his article, This is how Apples top secret product development process works. In a nutshell:

1. Designers are at the top of the food chain and are given unlimited resources.

- Uninhibited by the accounting department, they are truly allowed to dream big.

2. New product teams are treated as startups within the company.

- These teams are separated from the rest of the company and sworn to secrecy.

3. The Apple New Product Process (ANPP) is invoked.

4. The executive team reviews products every Monday.

- Apple ensures plenty of time is available for each product by limiting how many it will work on at a time.

5. The engineering program manager (EPM) and the global supply manager (GSM) are chosen.

- Both executives spend a lot of their time in China to oversee production.

6. Once a design is complete, the product is built.

7. The prototype is tested.

8. The product may be redesigned, rebuilt, and retested – again and again.

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The ANPP

The Apple New Product Process is a document that maps out each stage of a new idea, who will be responsible for its completion, who is on what team for each stage, and when each phase is expected to be done. Originally used to develop the Macintosh, the ANPP has been used ever since to ensure the highly successful process continues.

The EPM Mafia

Because the engineering program manager and the global supply manager are given absolute and total control over a product’s design, they are playfully called the “EPM Mafia” within the organization. Ultimately, it is expected that every decision is final and done for the good of the product.

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Buzzing, but no bugs

All this secrecy in the design phase leads to secrecy in the product development and testing phase, which leads to a frenzy in the product launch phase. For the most part, Apple may sit back and watch the speculation fuel interest in a forthcoming product – meaning lots of free press for a product not even available to consumers yet. Each launch is so much more than the release of a new product – it is an event watched around the world – much like the Oscars or the World Cup. Very smooth.

Meanwhile, each long-awaited product is meant to be viewed as “perfect” by Apple’s hungry consumers. Unlike its competitors, Apple goes out of its way to ensure any patches do not make the news. There are never any upfront warnings of possible issues with a new Apple creation. Apple maintains a carefully crafted culture of “no news is good news,” even in the face of fixing bugs on the fly. Any corrections are made on the down-low, maintaining that consumer confidence that so defines Apple fans.

Despite some trepidation in past markets and a slow economy, it’s a model that is still working. According to the Apple website, they have reported the highest quarterly earnings yet, selling 37.04 million iPhones in the last 14 weeks of 2011.

The shine on the Apple

With all the secrecy also comes a level of protection. The world may never know how many Apple products died at any phase, as we will never know what is being considered or even tested. One can only assume that there were a few that died on the vine, but that is all we can do: assume. Apple isn’t telling, and their “practically perfect in every way” image prevails.