The Samsung Galaxy S23 Ultra, the company’s latest high-end premium smartphone, starts at $1,199.99 for the model with 8GB of RAM and 256GB of storage. Despite the steep price, however, it managed to become the fifth best-selling smartphone in the first quarter of 2023.
According to a bill of materials (BoM) analysis done by research firm Counterpoint, component costs account for 39 percent of the phone’s price.
More specifically, the chipset and cells make up the largest part of the cost, accounting for 35 percent of the total BOM. The display is the second most expensive part, accounting for 18% of the total BOM. Other costly components include the camera (14%), memory (11%) and housing (8%).
Other items such as PCB, waterproofing, vibration and inductors account for 15 percent of the BOM.
The BOM cost of the Galaxy S23 Ultra is estimated to be $469 but this is not the same as the total production cost of the phone. A BOM simply includes the materials and components required to manufacture a product.
It does not include other costs incurred during production processing such as labor, overhead, quality control, testing, assembly and software.
Qualcomm-made components, including the custom Snapdragon 8 Gen 2 chip, fingerprint reader IC, power management IC, RF power amplifiers, audio codec, GPS, Wi-Fi + Bluetooth, and Sub-6GHz transceiver, accounted for 34 percent percent of the BoM, while Samsung components such as NAND flash, AMOLED display, and main and front cameras make up 33 percent of the total BoM.
By comparison, the BOM cost for Apple’s iPhone 14 Pro Max with 128GB of storage is $464. It retails for $1,099, meaning 42 percent of the selling price can be attributed to components.
The parts cost for the 128GB Google Pixel 7 Pro is $413, so materials account for about 45 percent of the total price.
Based on these numbers alone, it appears that Samsung has a higher margin than other leading smartphone manufacturers, but as it turns out, this is not decisive, as the true profit margin cannot be determined without taking into account all costs.
Source: Techblog by techblog.gr.
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