RIM Losing Money On Torch 9800 Smartphones

Research In Motion seems to be losing money on every BlackBerry Torch 9800 it sells, after research firm iSuppli found it carries a bill of materials (BOM) estimated at $171.05 (£109.66).

AT&T, the exclusive US carrier of this newest BlackBerry smartphone, currently offers the Torch for $199.99 (£128) with a two-year contract. However the same handset is available on the same terms from online retailer Amazon.com for half that – just $99.99 (£64).

Handset Notes

The iSuppli Teardown Analysis team was complimentary about the Torch, while finding little that was truly unique.

“On the outside, the Torch delivers a rich feature set, with three user interfaces (UIs): a capacitive touch screen, an optical track pad and the first slider QWERTY keyboard found in a BlackBerry,” Andrew Rassweiler, iSuppli’s principal analyst and teardown services manager, said in a statement. “On the inside, the Torch’s electronic design heavily leverages subsystems used in previous members of the BlackBerry smartphone line, specifically the Storm2 and the Bold 9700…”

The Torch contains a GPS Integrated Circuit (IC) from CSR – a new encounter for iSuppli, which had never come across this chip in a product teardown before. Otherwise, the Torch’s radio frequency, power amplifier and power management subsystems were “similar or virtually identical” to those in the BlackBerry Bold 9700 and, in terms of specs and size, the Torch’s display is similar to that of the Storm2 9550.

“The Torch also bears some similarity to smartphones from other brands,” stated the report. “Mechanically, it is comparable in complexity and cost to [the] HTC Tilt 2. Likewise, the Torch integrates [Texas Instrument’s] WL1271x WLAN/BlueTooth IC, which can be found in products including [Motorola’s] Droid X and [Microsoft’s] Kin 2.”

Topping the Torch’s BOM is its LCD and touch-screen display module, priced at $34.85 (£22.34) and accounting for 20.4 percent of the phone’s total. (To note, iSuppli’s estimated BOM is for hardware and manufacturing costs only – software, licensing, royalties and whatever else are another story.)

Right up behind the display, at $34.25 (£21.95), is the memory subsystem: a 4GB NAND flash memory device, 8Gbit of NAND flash, a 4Gbit mobile double data rate (DDR) SDRAM and a 4GB removable microSD card from SanDisk. And in third place, at $23.35 (£14.96), are the Torch’s mechanical/electromechanical bits, including the printed circuit boards and the enclosure plastics and metals.

No Envelope Pusher

In heavily utilising design elements from previous BlackBerry smartphones, wrote iSuppli, “RIM has delivered a smartphone with an enhanced feature set that largely matches those of the BlackBerry’s chief competitors: the iPhone and the Android-based handsets.”

While reviewers have called the Torch RIM’s best BlackBerry to date, they’ve been less inclined to describe the Torch as a true iPhone or Android competitor. While the first BlackBerry to run the BlackBerry 6 operating system, as well as the first to pair a QWERTY keypad with a touch display, consumers may be reaching conclusions in line those of iSuppli – that while the Torch offers a few glimmers of something new, in borrowing so heavily from pre-existing devices, it’s not the envelope-pusher many were hoping for.

According to analysts with RBC Capital Markets and Stifel Nicolaus, RIM sold 150,000 Torch handsets over its debut weekend. By contrast, Google says it is currently shipping 200,000 Android-running handsets per day, and Apple sold 1.7 million iPhone 4s during that device’s opening weekend.