Handset Cost Model
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The Handset Cost Model is an advanced tool designed to empower Mobile Network Operators' in-depth visualization of the cost and assessment of trade-offs of handsets, enabling more informed negotiations with OEMs. Leveraging TechInsights' vast teardown database and over 20 years of consumer electronics expertise, this powerful tool provides a comprehensive view of both BOM costs and intangible costs such as manufacturing, royalties, licensing, selling, general & administrative (SG&A), R&D, and profit margins.
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The Handset Cost Model allows users to configure and customize handsets by selecting from a range of components—including chipsets, displays, cameras, batteries, and more—that drive the costs of building the handset. The tool is updated quarterly based on our extensive teardown evaluations and new chipset releases in the market.
- Understanding of Product Cost: Gain a detailed, itemized cost analysis for each handset configuration. Based on your selections – such as device type (tiers), target price, target ASP, Total Units, product launch status, ordering period, 4G or 5G SoC, RF solutions, connectivity types, desired memory, display(s), front and rear cameras, enclosures, accessories, sensors, and batteries – the Handset Cost Model calculates the should cost or target cost for the device, both at the component and total level for negotiations.
- Feature-Driven Cost Trade-Offs: As you build your device feature set, the tool provides real-time cost updates so you can see how each feature impacts the total cost. If the cost exceeds your target, you can easily adjust your configuration—whether it's reducing features, selecting alternative components, or optimizing technology choices—to meet your budget or cost goals.
- Forward-Looking Cost Projections: The Handset Cost Model doesn't just give you a snapshot of current costs – it also projects costs over time. Select future dates (6, 12, or 18 months out) to anticipate market-based component cost changes, standard cost erosion, and NRE amortization. This gives you a dynamic, forward-looking view of your handset's cost, helping you plan for future negotiations or product launches.
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Managing Cost and Risk
The Handset Cost Model helps you understand handset cost structures and cost sensitivity to features. It provides a comprehensive breakdown of both BOM and non-BOM costs, enabling you to determine a target price for negotiations. By adjusting features, technology, and desired profit margins, you understand the cost implications across a wide range of handset options. Additionally, the model supports cost sensitivity analysis based on feature selection and can project costs up to 18 months into the future.
- Understanding Value and Cost Trade-offs: The Handset Cost Model offers a detailed view of cost distribution by considering tangible and intangible features, such as BOM costs and other associated expenses. It allows users to configure various options and instantly visualize the impact on overall cost when selecting specific features. Moreover, the model considers how costs may evolve over time, providing insight into future-based trends based on purchase timing.
- Analyzing Supplier Quotes: The model generates a detailed cost profile based on selected features, the SoC platform, and the expected purchase date. This allows you to evaluate profit margins and breakeven costs for suppliers, providing the Mobile Network Operator with valuable data for crafting negotiation strategies. By leveraging this insight, you can make informed decisions and strengthen your position during supplier discussions.
Maximize Your Handset Cost Insights
The Handset Cost Model from TechInsights is designed to help your business manage costs and risks.
Frequently Asked Questions
The Handset Cost Model is an advanced tool that allows Mobile Network Operators to gain an in-depth understanding of the costs associated with building handsets. It provides a detailed breakdown of both BOM and non-BOM costs, helping you make more informed decisions during negotiations with OEMs. The tool includes the ability to configure handset features and project future cost trends based on extensive teardown data and market insights.
The model allows you to select various components such as chipsets, displays, cameras, batteries, and more to create a custom handset configuration. As you build your device, the model updates in real-time to show how each feature impacts the overall cost. It also provides forward-looking cost projections, enabling you to anticipate price changes over time and plan for future negotiations or product launches.
The Handset Cost Model includes both tangible and intangible costs, such as:
- Bill of Materials (BOM) costs for individual components
- Manufacturing costs
- Royalties and licensing fees
- Selling, General & Administrative (SG&A) expenses
- Research and Development (R&D) costs
- Profit margins
These costs are calculated and displayed at both the component and total handset levels, helping you evaluate your device's cost structure.
Yes! The Handset Cost Model allows you to configure and customize your handset by selecting from a range of components. You can adjust features like device type, target price, memory, camera options, connectivity types, and more. The tool then provides a detailed, itemized cost analysis based on your selections.
The Handset Cost Model is updated quarterly to reflect the latest teardown evaluations, new chipset releases, and market trends. This ensures that your cost assessments remain relevant and based on the most up-to-date data available.
Yes, the model offers the ability to project handset costs for the next 6, 12, or 18 months. This feature helps you anticipate future changes in component costs, cost erosion, and other factors, enabling you to plan for future negotiations or product launches.
By providing a detailed breakdown of costs and cost sensitivities, the model equips you with the insights needed to negotiate effectively with suppliers and OEMs. You can evaluate the impact of different components and configurations on your handset's cost, helping you make informed decisions and improve your negotiation position.
The model helps you understand cost structures and how different features and technologies impact the overall cost. It supports cost sensitivity analysis, enabling you to identify the trade-offs between cost and features. This helps you manage financial risks and optimize your procurement strategy.
The Handset Cost Model is designed for Mobile Network Operators, procurement managers, product planners, and anyone involved in the negotiation, planning, or analysis of handset costs. It is particularly useful for companies that need to evaluate cost trade-offs, optimize semiconductor selection, and forecast future cost trends.
To get started, simply sign up or log in to the TechInsights Platform, to access the Handset Cost Model. From there, you can begin configuring your handset, exploring cost trade-offs, and analyzing supplier quotes. If you need assistance, our support team is available to help you navigate the tool and maximize its potential.
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