Samsung released Galaxy S8 and Galaxy S8+ smartphones on March 29. The handset was subsequently released in various countries across the world. If you examine the cost, you will know that the price of the Samsung Galaxy S8 and Galaxy S8+ are more than the previous counterpart. The main reason for the increase in the price is due to the addition of features such as Iris scanner nd Android 7.0 Nougat.
In a report published by IHS Markit, the total manufacturing costs involved with the Galaxy S8 are higher. When it comes to BOM (bill of material), the Samsung Galaxy S8 with 64GB storage is rated as $301.60. The amount will increase to $307.50 after you add the basic manufacturing costs.
Hence, the cost of materials for the manufacture of the Galaxy S8 is $43.34, which is higher than the Galaxy S7. Moreover, the amount is $36.29, which is a significant increase over the Galaxy S7 Edge. The cost of the 64GB Galaxy S8 is priced at $720, which is unsubsidized.
Responding to media, Andrew Rassweiler, senior director of cost benchmarking services for IHS Markit disclosed that the increase in the total BOM costs for the Galaxy S8 is due to the integration of features in tune with the competitors such as Apple. Moreover, manufacturers are engaged in a war over the inclusion of new features.
Furthermore, the Galaxy S8 also ships with non-hardware centric features such as Bixby virtual assistant. Industry analysts are of the opinion that the upcoming iPhone 8 will also carry the same features.
Interestingly, the report hasn’t mentioned anything about the cost of each component for the manufacture of the handset. However, the cost of the NAND flash memory and DRAM is around $41.50. The report also states that the cost for manufacturing 3000mAh battery is $4.50.
We still believe that the total manufacturing cost of the Samsung Galaxy S8 will be $150 less than the retail price. Samsung is a smart company and they know the nuances of how to grab money from the hands of the customers. Moreover, they should have taken into account the distributor share while fixing the price.
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