T-Mobile's G1 mobile phone -- with its Google, Inc. (NASDAQ: GOOG) powered -- may have a bill of materials that's about 10% cheaper than Apple, Inc.'s (NASDAQ: AAPL) iPhone 3G, according to research firm iSuppli. No wonder it retails for only $179 with a two-year contract while the 8GB iPhone 3G sells for $199 with the same two-year contract.Part of the difference may be in the memory of both units. While the iPhone 3G comes with 8GB of memory already installed, the T-Mobile G1 comes with a paltry 1GB memory card, which of course can be upgraded unlike the iPhone's memory capacity. The cost breakdowns: $144 for the G1 and $160 for the iPhone 3G. Even with the price break of a meaningless $20, can the G1 ever hope to compete with the iPhone's sales numbers?
Doubtful, at least in its current configuration. Apple's iPhone 3G surpassed the Motorola, Inc. (NYSE: MOT) RAZR to become the best-selling handset in the U.S. in this year's third quarter. The G1 is just now hitting the market as of late October. With the prices of the two units within $20 of each other, and with the iPhone's huge lead in being on the market, the G1 won't make much headway against iPhone sales. 2009 - and a second-generation G1 - could see renewed interest in T-Mobile's offering. Right now, it's all Apple.
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