Every time a new high-end smartphone is launched on the market, the same thing is talked about: the difference that exists between the cost of this mobile phone, and the final sale priceThe difference is usually very large, and it's also true in the case of the Samsung Galaxy S7. Manufacturing it "only" costs $255.
Samsung Galaxy S7
The data comes from the dismantling and estimations of IHSwhich calculates the cost of materials and assembly of the phone. In approximate terms, those 255 dollars are equivalent to around € 229 In direct conversion, a value that serves to dimension the price of high-end smartphones and that, by itself, does not reflect the final benefit.
This figure applies to the version sold in the United States with Qualcomm Snapdragon 820Units were also sold in Europe with ExynosHowever, the focus of the component breakdown is on the Snapdragon model, where the SoC It is the most expensive element and accounts for a large part of the total. The change of mobile platform provider compared to generations with overheating problems helped to Qualcomm to regain presence in the high-end range.
IHS highlights clear improvements over previous generations despite maintaining a similar component strategy. They even indicate that they couldn't to identify the supplier with certainty The camera module was missing in some units, a testament to the complexity of the supply chain, although the 12 MP camera with Dual Pixel technology was one of the S7's biggest selling points.
As always, the data comes from IHS, and refers to the standard version of the Samsung Galaxy S7 sold in the United States, with a U.S. dollar price 670 unlocked, and differs somewhat from the European version by featuring the Qualcomm Snapdragon 820 processor, which is also the most expensive component in the phone, reaching the $62Just knowing the price of this processor, knowing what it costs Samsung to buy this processor from Qualcomm, we can conclude why a €100 mobile phone will never be at the level of a Samsung Galaxy S7. Perhaps the most striking case is that of the 12-megapixel camera, one of the best cameras on the market in the mobile world, and it costs only $13,70The estimated cost of manufacturing and assembly of the smartphone is $5And the rest $174,30 These correspond to the rest of the components, such as the metal frame, the screen, the glass back cover, the battery, the memory, etc.
Breakdown of components and costs
The cost per unit calculation includes the BOM (Bill of Materials) and the assembly labor. For guidance, the most frequently cited breakdown is as follows:
- Snapdragon 820 processor: ~62 USD (around € 55), the most expensive element due to its performance and integrated connectivity.
- 12 MP Dual Pixel rear camera: ~13,70 USD, with sensors and optics optimized beyond megapixels.
- Assembly: ~5 USD per unit in highly automated production lines.
- Other components (Super AMOLED display(aluminum chassis, glass, battery, memory, modem, antennas, connectors, etc.): ~174,30 USD.
This breakdown clarifies why the cost of manufacturing a high-end mobile phone is so high. It is not trivialeven though the final price may seem high. The S7 brings together quality parts, with a reference screen and a very competent camera system that, despite its relatively low cost, provides high perceived value.
Selling price and margins
The unlocked S7 was in the range of USD 649-699 in the United States, while the S7 edge rose to USD 749-799In Europe, general stores have shown prices such as € 716 for the standard model. If we take as an example an MSRP of $670 versus a cost of $255, the gross difference is around 415 USD per unit.
However, that difference should not be interpreted as net profitThe IHS report does not include items such as software development (system, layers and support), R+D hardware, patents and licenses, marketing and publicityLogistics, distribution and channel margins, warranties, after-sales service, taxes, and inventory financing all significantly reduce the real margin.
Models, editions and availability
The Galaxy S7 family encompassed several versionsS7 and S7 edge variants Active y Duos, and even limited editions like injustice Edition u Olympic GamesFurthermore, luxury manufacturers offered exclusive finishes; for example, Truly Exquisite marketed units with 24K gold plated, in 18K and in Platinum from € 2.100with premium presentation, accessories such as wireless charger and headphones, in addition to a donation from 5% of each sale for charitable purposes.
Key specifications of the Galaxy S7
The S7 stood out for its rear camera 12 MP f / 1.7 with Dual Pixel and 4K video, a 5 MP f/1.7 front camera for selfies, processor Snapdragon 820 or Exynos 8890 depending on the market, 4 GB of RAM32/64 GB with microSD up to 200 GB, screen of 5,1 ″ QHD Super AMOLED, battery of 3.000 mAh with wireless charging (Qi), Bluetooth 4.2NFC, fingerprint reader, certification IP68 and options Dual-SIM in certain regions.
Mobile costs more than that
However, as we always say, a mobile phone actually costs more than just the cost of its components and manufacturing. Keep in mind that this doesn't include expenses such as... marketing (Samsung events are much more expensive than Sony's), as could also be the case with technical service in different countries, which also have a cost, or such as those of research and developmentUltimately, to have a mobile phone with a certain thickness, or to have a specific single camera, it is necessary to develop a technology This is a unique process that involves paying employees and significant research expenses, and while some of these costs might be reflected in the component price, this isn't always the case. Sometimes a lot of money is spent finding a way to manufacture a curved screen economically, and ultimately the screen's manufacturing cost is low, when in reality the initial investment required to develop that manufacturing process was very high.
That mobile phone manufacturers make a lot of money is also obvious, but that's not the case for everyone. Samsung and Apple could be examples of extremely successful smartphone manufacturers whose differences between the cost The difference between the manufacturing cost of mobile phones and their sales price is very large. But the difference between the manufacturing cost of Sony or HTC phones and their retail price is also very large, and these manufacturers, rather than being profitable, are struggling to remain competitive. profitable in the world of smartphones.
With all of the above in mind, the figure of $255 USD is a useful reference point for understanding the components and their impact on the cost, but the final price reflects a complex ecosystem influenced by various factors. innovationEconomies of scale, brand positioning and support are factors that explain why a top-of-the-range phone cannot be compared with much cheaper phones even if the cost of its components seems moderate.
