14 DAY TRIAL // Samsung’s Galaxy S8 is more expensive than last year’s Galaxy S7, because its internals have higher prices than its predecessor. The bill of materials reveals that Samsung must spend more money to manufacture the Galaxy S8, compared to the Galaxy S7.
The bill of materials, revealed by IHS Markit, shows that components inside the Galaxy S8 carry a total price tag of $301.60 and with the added $5.9 manufacturing expenses, the bill reaches $307.50 for each unit. This means that Samsung must pay $43.34 more than for the Galaxy S7 to manufacture it.
The Galaxy S8 is also more expensive to manufacture than the Galaxy S7 edge by $36.29. Sadly, the report doesn’t reveal the price for each component, but it does reveal that the NAND flash memory and DRAM cost $41.50 combined, while the 3,000mAh battery has a price of $4.50.
Various expenses are deducted from the retail price
The Galaxy S8 currently sells for about $720, which places the difference between the production cost and the lowest retail price at $412.5. But other expenses are deducted from the difference, including shipping and marketing expenses, as well as import fees that vary depending on the country.
In addition, retailers and carriers take their cut of every sale, which makes it quite difficult to say what specific amount goes to Samsung from the sale of a Galaxy S8 smartphone.
Still, Samsung is expected to cash in quite a handsome profit from the sale of Galaxy S8 units, considering that pre-orders have surpassed last year’s records in its home country, reaching more than 1 million units.
Unlocked versions of the Galaxy S8 and Galaxy S8+ were launched today in the US, Canada, Puerto Rico and Korea, as many customers are expected to pick up the new device. The bill of materials for the Galaxy S8+ isn’t known at this point, but we expect it to show a higher price tag compared to the standard model, considering that the larger variant has a bigger screen and higher battery capacity.