One thing is the official price of a smartphone, and another is what it costs the company to manufacture it. Let’s take a look at how much it pays to make the recent Samsung Galaxy S9 and Apple’s iPhone X. Spoiler: much less of its final sale price, dictated by more factors.
If a device costs me 300 euros to make it and sell it to 200, I will be losing 100 euros; but if instead, I sell it at 600 euros, I will be earning 300 € of profit.
This is the basic law of the manufacturers: to sell something for more money than it cost to do it to obtain benefits. Web TechInsights today released a comprehensive study on the manufacturing costs of 5 current high ranges, including two stops of range: The Samsung Galaxy S9 +, the Galaxy Note 8, the Galaxy S8 +, iPhone 8+ and iPhone X. Let’s focus on the two most recent, S9 + and iPhone X.
One thing is the official price of a smartphone, and another is what it costs the company to manufacture it. Let’s take a look at how much it pays to make the recent Samsung Galaxy S9 and Apple’s iPhone X. Spoiler: much less of its final sale price, dictated by more factors.
If a device costs me 300 euros to make it and sell it to 200, I will be losing 100 euros; but if instead, I sell it at 600 euros, I will be earning 300 € of profit. This is the basic law of the manufacturers: to sell something for more money than it cost to do it to obtain benefits.
Web TechInsights today released a comprehensive study on the manufacturing costs of 5 current high ranges, including two stops of range: The Samsung Galaxy S9 +, the Galaxy Note 8, the Galaxy S8 +, iPhone 8+ and iPhone X. Let’s focus on the two most recent, S9 + and iPhone X.
Cost of Goods Sold
In financial terms, the COGS or ‘Cost of Goods Sold’ is the direct unit variable cost associated with the manufacturing process of a product or service. In this case the cost of manufacturing the Galaxy S9 + and the iPhone X based on consumption of resources such as raw materials, machines, and robots for assembly, labor personnel, etc. In the case of both terminals, as we can see there are a lot of necessary components in the process, 17 nothing less, which are:
- Battery
- Camera
- Connectivity
- screen
- Logistics
- Mixed memory
- Non-volatile memory
- Volatile memory
- Mixed-signal – analog and digital circuits
- Non-electronic components
- RF component
- Sensor
- Energy management / Audio
- Sensor
- Substrates
- Support Materials
- Others
- Final assembly and test
As we see in the summary table of Techsights – which also includes the other three terminals mentioned. There are components that cost more in the Galaxy S9 + than in the iPhone X – for example the volatile memory, 39 dollars in the S9 and 25.50 $ on the iPhone X-, and also others that are worth more on the Apple smartphone than on the Samsung. There are even components that are worth almost the same, as the sensor, which costs Samsung $ 5 and Apple $ 5.50.
Which is more expensive to produce?
For example, Samsung integrates the LTE modem in the terminal’s Exynos 9810 chipset, which costs $ 67, while Apple prefers to mount them separately with the A11 processor and the Qualcomm MDM9655 LTE model, with a combined cost of $ 64.50. . Another differentiating element is, for example, the screen, which gives Samsung $ 72.50 per unit and Apple, which has created a trend with the characteristic notch, $ 77.
