So far, the launch hasn’t gone quite so well. First there was a lackluster review. Then, days after going on sale on Easter Sunday, the company has admitted to a software glitch and is offering people who bought one a $100 credit in addition to a software patch. The credit makes the phone free to buyers willing to take a two-year service contract.

Now the market research firm IHS iSuppli has taken a Lumia 900 apart and, in a report shared with AllThingsD that will be released later today, has determined that it costs Nokia about $209 to build. And, judging from the parts being used, it’s not exactly built like the most cutting-edge phone on the market.

In fact, it seems like Microsoft and wireless chipmaker Qualcomm are both making an effort to showcase how efficient Windows Phone 7 for mobile can be; at the same time, they seem to be aiming to entice other hardware manufacturers by demonstrating that a full-featured smartphone can be built using components that are about a generation behind the current high end, and therefore cheaper, says Andrew Rassweiler, the iSuppli analyst who supervised the teardown.

For example, the teardown found that the Lumia 900 uses a single-core Qualcomm chip that costs $17 as its main applications processor; a phone with similar features running Google’s Android OS, such as Samsung’s Galaxy SII Skyrocket, uses a higher-end dual-core processor that costs $22.

“It appears what Microsoft and Qualcomm and Nokia are trying to do here — and this is being driven by Microsoft more than anyone else — is streamline the OS so it can run on a lighter processing platform,” Rassweiler told me. “The point being is to undercut the higher end phones.”

The choices don’t end with the processor. The phone contains only 512 megabytes of DRAM memory, where most phones would use one gigabyte. And the trend is expected to continue, as the next generation of Microsoft’s mobile OS will require even less memory.

Another example: The Bluetooth chip. Nokia is using a slightly older chip from Broadcom, and not the latest, greatest Bluetooth part. The difference between them is only $2.50, but it serves as another example showing that Nokia is aiming to compete on price.

For Nokia, the strategy seems to be one of aiming to compete against other phones on price, while offering similar features. The Lumia is thought to sell for $450 at retail without a subsidy, or about $200 lower than Apple’s iPhone 4S, which starts at $649 without a contract, depending on model, and costs between $188 and $245 to build.

Microsoft is also thought to be helping Nokia out, says iSuppli’s Wayne Lam, who also participated in the teardown analysis. While software costs are not considered in a teardown analysis, he says Microsoft is thought to be making less than $5 per phone in licensing fees on the Windows Phone 7 operating system, far lower than the $15 per device it is said to want. That would be in line with the $3 per phone price that Nokia is thought to have paid in licensing fees for the Symbian OS it used previously, and of which it was a partial owner. “Nokia is getting a fantastic discount,” Lam told me.

One place where Nokia didn’t skimp? The gyroscope chip, which determines how the phone is being moved. It contains the same gyroscope chip from STMicroelectronics that goes into the iPhone 4S. There are, apparently, some things on which you simply can’t compromise.

Inside, the phone is similar too, but there have been some strategic changes from one generation to the next that have important implications for Apple’s many suppliers. According to a teardown analysis conducted by the research firm IHS iSuppli, chipmaker Intel, which last year acquired the wireless operations of the German chip concern Infineon, has been almost entirely bounced out of the 4S in favor of a set of chips from Qualcomm. The shift to Qualcomm had been rumored as far back as last September.

Before Intel acquired its wireless unit, Infineon had previously supplied Apple with a chip known as a baseband processor that Apple had used in combination with chips from Skyworks and Triquint to work with wireless phone networks. “Qualcomm is the big winner here,” says Andrew Rassweiler, an analyst with IHS iSuppli who conducted the teardown. “It is selling Apple a whole suite of chips that adds up to about $14 to $15 per iPhone.”

Intel spent $1.4 billion to acquire Infineon’s wireless chip operations last year in a move seen as meant to shore up its presence in the wireless phone industry overall. It has struggled to win business for its Atom line of microprocessors, which are aimed at mobile devices like smartphones and tablets.

Infineon still has a small chip in the iPhone, but Rassweiler says it’s far less significant and a lot less costly than the one it supplied Apple before. “It’s almost like Apple threw them a bone with a 50-cent part after they lost a much more high profile chip that cost about $10,” he says. Intel had no comment.

ISuppli regularly conducts teardown studies of wireless phones and other consumer electronics devices in order to find out who a manufacturer’s vendors are — like most manufacturers, Apple prevents its suppliers from identifying themselves, much as they’d love to — but also to determine what each part costs. The combined cost of components — analysts check on the list prices of each part — is known as a bill-of-materials (BOM) estimate that gives a fair idea how much a manufacturer, in this case Apple, makes in gross margin on each device sold. Apple doesn’t disclose its gross margin on a per-product basis but when it reported its quarterly results yesterday it said its overall gross margin was 40.3 percent.

In the case of the iPhone 4S, Rassweiler estimates that the BOM cost ranges from $188 for the 16 gigabyte version of the iPhone 4S to $207 for the 32GB version and $245 for the 64GB version. Apple and its carrier partners sell the phones for $199, $299 and $399 respectively, typically with a two-year contract for wireless service that carriers use to subsidize the cost they pay Apple.

The costliest components are the ones that determine the price: Memory chips. Apple has been known in the past to rely mostly upon South Korea’s Samsung Electronics, the world’s largest supplier of memory, and from Japan’s Toshiba. In the phone that Rassweiler’s team tore down, the memory chips came from Samsung rival Hynix Semiconductor. “That struck us as a bit of a surprise,” Rassweiler says. It’s hard not to wonder if adding Hynix to the stable of iPhone memory suppliers is a partial response by Apple to the complicated patent fight it is waging with Samsung in courtrooms around the world.

Even so, Samsung appears to be have maintained its role as the manufacturer of the Apple-designed A5 processor that provides the iPhone 4S, and also the iPad 2, with most of its computing horsepower. Some published reports in recent months had suggested that because of the patent fight, Apple might end a relationship that dates back to the original iPhone and move its chip manufacturing contract to Taiwan Semiconductor Manufacturing Co., the huge chip manufacturing foundry. Rassweiler says there’s no sign on the latest A5 chips that that has occurred. “The markings are the same as what we saw in the iPad 2,” he says. The estimated cost for the A5 chip is $15 each, he says.

Apple started designing its own chips for the iPhone and iPad products beginning in 2010 with the release of the first iPad. The chip is thought to have been designed by teams from PA Semi and Intrinsity, two privately held chip design firms that Apple acquired in 2008 and 2010 respectively.

However, it’s also clear that the A5 chip is taking on more of the heavy computing lifting inside the device than the previous A4 chip, Rassweiler says. For example: The iPhone 4 contains a chip from privately held Audience Semiconductor, based in Mountain View, Calif., that handled noise cancellation. There’s no such chip inside the iPhone 4S, Rassweiler says, so it appears that noise-cancellation duties may have been moved to the beefier A5 chip itself.

Triquint Semiconductor provided a set of chips that make up a wireless transmit module that works with the wireless phone networks. Triquint has traditionally been an iPhone supplier, Rassweiler says, but the value of what it supplies to Apple appears to have dropped. One wireless chip company that has seen the value of what it supplies to Apple increase is Avago Technologies. Like Triquint, it too has been an iPhone supplier, but the overall value of the chips it supplies has gone up in the 4S.

STMicroelectronics, the European chipmaker, maintained its role as the supplier of gyroscope chips that help determine the phone’s position and rotate the screen for playing games and displaying pictures and videos. AKM Semiconductor again supplied the compass chip. Texas Instruments continued in its role supplying the chip that controls the iPhone’s display, and an audio chip.

One vendor could not be identified. Rassweiler says that Apple appears to have taken pains to hide the identity of the company that supplies the parts that power the iPhone 4S’s highly regarded 8 megapixel camera. This is not new, and the candidates include Largan Precision Co., a Taiwanese supplier of camera modules to wireless phone companies, and Omnivision. “We don’t know exactly who makes it,” Rassweiler told me. Whoever the supplier is, Rassweiler estimates the camera added $17.60 to the cost to build the iPhone. And they’re likely to make a lot on the deal. IHS iSuppli is forecasting that Apple will sell 81 million iPhone 4Ss around the world next year.

Update: A few of you have written in saying that it was Sony who supplied the camera. Maybe. The folks at Chipworks dissected the camera module and found a Sony-made CMOS image sensor inside it. That doesn’t make the whole module a Sony’s however. It could be a Sony camera or it could be that whoever made the camera used a Sony sensor. And last week Barron’s reported on some debate among analysts over whether or not Apple has split the camera supply contract 50-50 between Omnivision and Sony.

It’s because of two tiny parts inside them, one called an accelerometer that detects movement. The other is a gyroscope that is basically used to help maintain orientation of an object or to measure any changes in its orientation.

The first three generations of iPhone had accelerometers, but the iPhone 4 and later the iPad had gyroscopes built into them in order to give software developers — game creators especially — a truly accurate way to measure how the phone is moved and thus change the action on-screen accordingly. Apple’s then-CEO Steve Jobs memorably demonstrated what the addition of gyroscopes meant with an on-screen game of Jenga on an iPhone at an Apple event last year.

The company that made them is the Italian-French semiconductor company STMicroelectronics. Neither company will ever say that out loud, Apple for its own reasons and STMicro out of fear of annoying Apple. However, teardown analyses of both the iPhone 4 and the iPad 2 conducted by the research house IHS iSuppli have confirmed this.

I bring it up because STMicro will announce today that it has made its gyroscope chips even smaller than before. The most recent one was about about 17 cubic millimeters, and the new one is just slightly above 10 cubic millimeters. What’s the point in making them smaller? For one, real estate inside a device like an iPhone is precious, so when any one component gets smaller, designers have more space to work with. And often, smaller parts require incrementally less power, which means only good things for battery life.

STMicro has already built more than a billion and a half of these little things — not all of them for use in the iPhone and other Apple iThings, obviously. They do show up in other phones and gaming devices, GPS navigators, robots and scores of other things. ISuppli pegged STMicro’s share of the gyroscope market at 30 percent in 2010, which is pretty impressive considering that it was all of 1 percent the prior year.

Yet as is usually the case with chip companies, the company rarely gets to brag about the identity of its customers, even though it would like nothing better than to shout their names from the rooftops. Instead, you can hear Steve Jobs himself sing the praises of the gyroscope, though without naming the company that made it, in this video excerpt from last year’s Apple Worldwide Developers Conference.

Here’s a sampling: Fairchild Semiconductor is up nearly 5 percent in after-market trading. Analog Devices is up a little more than 4 percent. Maxim Integrated Products, 5 percent. Linear Technology about 3 percent. On Semiconductor more than 5 percent. Intersil, 8 percent. STMicroelectronics, 3 percent. You get the idea: Investors are clearly hoping that another acquisition is soon to happen in the world of analog semiconductors.

TI was already the big gorilla in the analog business. It’s a $42 billion business and TI accounted for about $6 billion worth of analog sales in 2010, and the analog business amounted to 43 percent of TI’s business last year. With this acquisition it goes from being a chip company that supplies the microprocessors for most of the world’s wireless phones to a mostly analog company. A Gartner market ranking of analog chip makers ranked TI number one and National fourth. The combination makes TI an even bigger gorilla yet.

Who’s number 2? Analog Devices, ahead of Maxim and Linear Technology, who are numbers three and five respectively in the Gartner rankings. Further down the list you see names like STMicro, On Semi, Intersil and Fairchild.

So what’s so great about analog chips? They go into everything: From wireless phones to games to medical devices to military and industrial gear. They manage power; help convert light and sound into digital information; and measure temperature or pressure or any other quantity that occurs in the real world. And with all the digital gadgets we rely upon these days, we’re relying increasingly on analog chips of every stripe. Analog sales grew 37 percent last year, which was faster than the chip business as a whole, Gartner analyst Steve Ohr told me.

As is the case with TI and National, there’s bound to be a lot of overlap in products and customers among all these other companies. That suggests that more combinations are likely, though with valuations inflating on the speculation, any company thinking of making an acquisition would probably want to sit tight until the prices come down a little bit before making a move.

But the teardown that Wall Street and the investment community is waiting on is the one from the market research firm IHS iSuppli, whose team spent all day Saturday in a furious effort to dissemble a 32-gigabyte iPad 2 and estimate the cost that Apple paid for every component. They gave me an exclusive early look at their findings.

The point is to form a partial picture of the gross profit margin on every unit, a figure that Apple generally keeps to itself. This information is useful to investors and analysts who then factor the findings in with other assumptions they use to predict how much of a profit Apple is going to report over the next few quarters.

The headline of iSuppli’s teardown researcher is always the estimated bill-of-materials cost, which is the sum cost that it thinks Apple has paid for all the hardware inside the iPad 2. It doesn’t take into account the cost to develop software, or other things like packaging, shipping and distribution, or manufacturing.

In this case the estimates are for the 32-gigabyte, 3G version of the iPad which sells for $729, and there are two estimates, one for the AT&T version–$326.60, and one for the Verizon Wireless version–$323.35. Some of the wireless chips used in the AT&T version are a little more expensive or require an extra part. For example, on the Verizon version, GPS is integrated with the Qualcomm-made wireless baseband chip. On the AT&T version, an extra GPS chip had to be added along with the Broadcom-made Bluteooth and Wi-Fi chips, adding an extra cost of $1.50 per unit.

The baseband wireless chips were naturally different because AT&T and Verizon use different wireless technologies. Intel, the new owner of the former wireless chip division of Infineon, supplied the main wireless chip in the AT&T version, with supporting chips coming from TriQuint Semiconductor and Skyworks for a combined cost of $18.70.

Qualcomm supplied the main wireless chip Verizon version, with supporting chips coming from Skyworks, Avago Technologies, and Murata for a combined cost of $16.35. While there had been some speculation that Apple had used a Qualcomm chip in both versions, but it turned out not to be the case.

Aside from the wireless chips, the components are otherwise identical across both versions. Both sport Apple’s A5 chip, and iSuppli says that Samsung is still manufacturing it for Apple at a cost of $14. While there had been some talk in recent weeks that Apple was moving its chip manufacturing contract to Tawain Semiconductor Manufacturing Corp, there’s no evidence that it has made such a move, at least not yet.

The most expensive component by far is the touch-sensitive display, coming at $127. ISuppli says that the LCD portion the unit they tore apart was built by LG Display, but Apple is known to use other sources for displays, including Samsung, and possibly ChiMei Innolux. The glass assembly covering the display is thought to come from TPK or WinTek. ISuppli says costs on the display are going up because manufacturing yields on LCDs have been lower. Apple is also thought to be using a more expensive glue to improve the efficiency of the process of bonding a new thinner type of Gorilla glass to the display.

Samsung supplied Apple with the NAND flash memory used in the iSuppli sample, holding on to a relationship that goes back several years to the days of the first iPod nano, though Toshiba is also known to supply Apple with flash. It is the world biggest consumer of flash memory, after all. Elpida supplied the DRAM memory. ISuppli estimates the combined cost of memory, both flash and DRAM plus a Micron-made MCP memory chip at $65.70.

Then there’s a set of components seen in the iPad 1 that remained the same in the iPad 2. STMicroelectronics supplied the gyroscope and the accelerometer, and AKM Semiconductor supplied the electronic compass. Broadcom supplied touch interface chips, while Texas Instruments supplied a touch screen driver chip. Analog Devices supplied a capacitive touch controller.

Finally there are the two cameras. ISuppli hasn’t yet named the suppliers there, though the usual candidate is Aptina, the former camera unit of Micron, though it’s possible that Apple sources them from more than one place.

ISuppli’s estimates are a lot higher than the findings of another teardown shop, UBM Techinsights. The Wall Street Journal reported that UBM’s cost estimate is about $270, but that estimate was made before it conducted its actual teardown, and didn’t change once it had.

The company said that the Initial Determination of the judge upheld the validity of the patents, but found no infringement. Tessera had asserted infringement against the ATI Technologies unit of Advanced Micro Devices, Fresscale Semiconductor, Motorola, Qualcomm, Spansion and STMicroelectronics.

Tessera said it is “disappointed” in the ruling and will review the decision before determining its next steps.

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