The price of smartphone materials dropped by 13% 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 rolw in lowering the cost of smartphone software and licensing.

In-Stat projects that half of U.S. mobile phones shipped in 2012 will be smartphones -- in 2010, less than 30% of U.S. 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.