First let’s look at the cost of parts alone:
Screen Technology: $50
This is the most expensive part of the handheld, mostly because it’s a high grade OLED screen with a 250+ PPI resolution, and having seen it in person is just beautiful. Another reason why it’s so expensive is since Sony isn’t providing the screen for the device, but they didn’t provide the screen tech for the PSP either that was Sharp. This time around it’s coming from the masters of OLED, Samsung. So you have to pay them for manufacturing and royalties.
This is cheap since it’s manufactured in house and isn’t implementing anything special or new. If I remember correctly this is just a standard Lithium-Ion battery pack.
Again done in house and Sony’s become known for their portable cameras. They even provide Apple with camera technology for both the 4 and 4S iPhones.
Radio Chip: $3.50
Since nothing too special is going into this chip, they’re pretty easy to manufacture.
Since this doesn’t have dedicated memory I’m guessing this is the 256MB RAM drive for the graphics memory. Given its small size I’m guessing that most of the money is going to Samsung or whoever is manufacturing it this time around. It was Samsung for the PSPs and the PSPgo.
This is most likely the main RAM and is only slightly more since it is 512MB instead of the 256MB of the graphics RAM. Again the majority of the cost is going towards the provider of the chip, which again I believe is Samsung.
I’m actually surprised how cheap this is since it’s the first quad-core chip for a handheld device, and definitely the first for a dedicated gaming handheld. I guess they kept the cost down since they built it in house.
This covers the buttons and motherboard cost, and the specially made analog stick housings. I believe they are also including the rear conductive sheet, which is used for the rear touch pad.
This covers the plastics mostly and the trigger buttons.
This covers the other parts in the device like the ports, wiring, and ribbons. This also covers the charger and data cable.
Supporting Materials: $10
I’m guessing this is documents and box that the device ships in.
The total comes out to be $159.10
So, as I said, that leaves about a 100+ margin of profit depending on what model you’re looking at be it 3G/WiFi or just WiFi alone. Now people will ignorantly cry foul at that seemingly huge mark-up but there are a few things you have to realize, and that’s where I hope to come in and help clarify.
First things first, these prices listed are wholesale prices and are the price of one item in a bulk group, the item sold on their own could easily be double the cost of what is listed here. The CPU and GPU alone would easily be triple if not quadruple than listed given the amount of R&D that went into making them, since both were specially made for this device. So it wouldn’t be to unrealistic to assume that the actual price of this device if made for one person would be nearing $400. Then there are the costs that these lists don’t cover like research and development, shipping, taxes that they have to pay and the slight profit margin that Sony as a company would like to make on each unit and deserve to make on it. When you add those to the equation I would venture to guess that the actual price of the unit becomes about $210-$220 leaving Sony about $40-$90 in profit. Then prices also vary, depending on where it’s being shipped to and the many taxes that those places place on the product. Hopefully next time you think that a device is too much you’ll understand why it’s priced “so high”.
About the Guest Author:
Heather Green is a freelance writer for several regional magazines in North Carolina as well as a resident blogger for onlinenursingdegrees.org. Her writing experience includes fashion, business, health, agriculture and a wide range of other topics. Heather has just completed research on online colleges for nursing and nursing school online.