iPhone 7’s aluminum unibody and features like 3D Touch make it an expensive smartphone to build, but there’s one device that’s more expensive. A lot more expensive.
That’s Samsung’s swanky new Galaxy S8, which is by far the priciest smartphone available based on the bill of materials.
The Galaxy S8 was never going to be cheap to manufacture. Its curved Gorilla Glass, aluminum frame, edge-to-edge Infinity Display, and iris scanner are all pricey components. The device also ships with 64GB of storage as standard, and Qualcomm’s latest Snapdragon 835 processor.
In total, the bill of materials comes to $301.60, making this not only Samsung’s most expensive smartphone, but the entire market’s most expensive smartphone. Add $5.90 in manufacturing costs, and it costs Samsung a total of $307.50 to manufacture a single unit.
That’s $43.43 more than it cost to manufacture a Galaxy S7, and $36.29 more than a Galaxy S7 edge.
In comparison, it costs Apple around $224.80 to manufacture a single iPhone 7. The difference is reflected in the final selling price of each device: While iPhone 7 starts at $649, the Galaxy S8 will cost you a whopping $720 without carrier subsidization.
Chart: Statista
“The higher total BOM costs for the Galaxy S8 seem to be part of a trend that reflects something of an arms race in features among Apple, Samsung and other phone manufacturers, as they all try to add new and distinguishing hardware features,” said Andrew Rassweiler, senior director of cost benchmarking services for IHS Markit.
“While there are new non-hardware features in the Galaxy S8, such as a virtual assistant called Bixby, from a teardown perspective the hardware in the Galaxy S8 and that of the forthcoming new iPhone is expected to be very similar.”
As you might expect, the Galaxy S8’s most expensive component is its display, which costs around $85. The second-most expensive component is its Snapdragon 835 chipset at $45, followed by the RAM and storage chips at $41.50. Its aluminum chassis is also pricey at $22.50.
IHS is yet to teardown the Galaxy S8+, but that will obviously prove to be even more costly. Although almost all of the components remain the same, it does have a larger display, frame, and battery.
Killian Bell is a freelance writer based in the U.K. He has an interest in all things tech and also covers Android over at CultofAndroid.com. You can follow him on Twitter via @killianbell.
6 responses to “Galaxy S8 costs a lot more to build than iPhone 7”
Considering that Tim Cook is an operations genius, I’d hope iPhones are cost competitive.
So the S8 costs more than the iPhone a sells for less than the iPhone? Someone needs to send the executives at Samsung Mobile back to accounting class so they can learn about profit margins.
Are we looking at the same numbers?
S: $720 – 301.60 = $418.40
A: $649 – 224.80 = $424.20
Five bucks difference. You can almost get a cup of coffee with that.
It’s not a huge number at $5. Now multiply that by 1 million phones. Ok, now multiply it by 20 million phones… you get the point. Also, Apple has a higher “Willingness to Pay” than Samsung. Apple’s prices stay at $649 all the way up until the new iteration. Samsung will need to discount within 6 months (or less) of this iteration. This is where competitive advantages stand out.
Sure, I get what you’re saying—that’s a lot of coffee. This is only an estimated BOM (bill of materials), but there are other costs involved, like manufacturing,
copy machinesdesign, marketing, etc.Then there are corporate goals, which can be anything from making money to getting market share.
To be honest, I expected them to sell it for less money to overcome the S7
flambéfiasco.Apple’s $424.20/$649 is a much greater percentage than Samsung’s $418.40/$720.