The price of smartphone materials dropped by 13 percent last year compared to 2009, according to In-Stat, as volumes of low-cost smartphones increased amid surging popularity.
The biggest costs in a smartphone are its display screen and processor and the price of both dropped sharply in 2010, In-Stat said in a statement. Other significant material costs are for the device's memory, camera, software and case.
In-Stat analyst Allen Nogee said component prices were also affected by the integration of GPS, Bluetooth, Wi-Fi and sometimes FM radio onto a single chip. All were previously on separate chips, he said.
Also, increased use of free or low cost open-source software played a role in lowering the cost of smartphone software and licensing.
In-Stat projects that half of US mobile phones shipped in 2012 will be smartphones - in 2010, less than 30 percent of US wireless subscribers used a smartphone, according to Nielsen research.
In-Stat didn't detail actual costs for smartphones in the announcement about its report on smartphones, which is available for $3,495.