Update: Nexus One Has $174.15 Worth of Hardware

The Nexus is raising quite the ruckus. From the squabble over the device’s name to complaints over poor 3G performance and subpar support, Google’s first foray into phone sales is taking some unfortunate twists.

One can only hope Google and T-Mobile will get to the bottom of the problems (Google, for its part, has said it’s “committed to sorting out the few kinks” in its new systems). In the meantime, we can take a closer look at what’s inside the Nexus One and what your hard-earned money is actually buying.

Inside Google’s Nexus One

The Nexus One, manufactured by HTC, costs $529 unlocked or $179 with a two-year T-Mobile contract. The phone itself, according to a new analysis, actually contains $174.15 worth of hardware.

The analysis is by a company called iSuppli. It broke down all of the phone’s components to estimate the “bill of materials,” or total hardware cost. The estimate doesn’t include manufacturing expenses, nor does it take into account things like packaging, accessories, and royalties. (It also, as far as I know, does not apply to those weird supersized versions of the phone.)

(click on image above to enlarge)

Not surprisingly, the Nexus One’s 1 GHz Snapdragon processor is its most expensive part, followed by the OLED display. Here’s the breakdown, according to iSuppli:

• Processor: $30.50
• Display: $23.50
• Memory: $20.40
• Touchscreen assembly: $17.50
• Camera: $12.50
• MicroSD Card: $8.50
• Bluetooth/wLAN: $8.20
• Battery: $5.25

The rest of the cost is taken up by parts such as electrical components, power management technology, and other mechanical hardware.

Nexus One Cost Comparisons

On the iPhone 3GS, interestingly, the processor is only the fourth most expensive part; the phone’s flash memory, display module, and touchscreen assembly are all higher on the list. (You can see the full iPhone 3GS component breakdown here.)

When it comes to overall cost of ownership, the Nexus One beats out both the iPhone and the Droid — at least, looking at the current T-Mobile-centric incarnation of the device. The difference there is largely due to T-Mobile’s cheaper plans compared to Verizon and AT&T.

Of course, if the 3G service doesn’t begin working reliably, that may be a moot point. For a company famous for asking tough questions, Google sure has some pressing queries of its own to answer right now.

(Note: This story has been updated to reflect precise pricing analyses from iSuppli.)

JR Raphael is a PC World contributing editor and the co-founder of eSarcasm. Check out his new Facebook page: facebook.com/The.JR.Raphael