Wayne Lam, another IHS analyst, said IHS believes that Microsoft substantially discounted its software licensing fees on the Lumia 900 to match the overall lower manufacturing costs. Previous Windows Phone smartphones from HTC, Samsung and LG met with limited commercial success, and Microsoft has been willing to "double-down with Nokia to promote Windows Phone 7," Lam added.

IHS compared the Lumia 900's costs for components and hardware with the Samsung S II Skyrocket, an Android phone with a similar set of features. The Skyrocket's costs were $236, or 43% of its $550 retail price.

IHS said that Nokia kept the Lumia 900 hardware costs down primarily with the use of a single-core processor and limited DRAM, while still achieving competitive performance with the Skyrocket. The Lumia 900 uses the single-core APQ8055 processor from Qualcomm that costs $17; the Skyrocket uses the dual-core APQ8060 from Qualcomm that costs $5 more at $22, IHS said.

IHS compared the Lumia 900 with an Android phone, the Samsung S II Skyrocket. (Source: iHS Suppli)

The Lumia has 512MB of DRAM, half the 1GB used in the Skyrocket and many other smartphones, IHS found. The Lumia 900's DRAM and NAND Flash memory costs totslled $27, $5 less than those components cost for the Skyrocket.