Samsung’s recent flagship smartphones received many accolades from the critics as well as a ton of love from the customers. However, do you know what does it costs to manufacture a Samsung Galaxy S8 or Galaxy S8 Plus which we buy at $ 799 (roughly Rs 51,500) and $ 899 (roughly Rs 58,000) respectively? Let’s find it out.
Citing the sources, IHS Markit which is a UK-based industry and market analytics firm has released a press release last month which has revealed the approximate cost to manufacture the Samsung Galaxy S8.
Display
Let us start with the most expensive component on the phone, the 5.8 inch AMOLED Infinity display. The landed cost of the display to Samsung is $ 85 or roughly Rs. 5525, this includes the touch panel as well as the Corning Gorilla Glass covering on the outside. The display is manufactured by Samsung Display Co Ltd. which is a subsidiary of Samsung.
Processor
The next most expensive component is the chipset or the System on a Chip (SoC). Samsung is using their in-house Exynos 8895 SoC in the new Galaxy S8 and the cost to manufacture the chip is $ 45 or about Rs. 2800. The Exynos 8895 uses 2 clusters of 4 cores each, the main cores uses Samsung’s self-developed M2 cores clocked at 2.3GHz while the second cluster uses 4 ARM A53 cores clocked at 1.7 GHz. The chipset has been manufactured on the 10nm process, which makes it extremely power efficient.
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Storage
The memory used on the device costs $ 41.50 which is approximately Rs. 2700. For this price, the users get 64GB of UFS NAND which is a new standard in solid state memory and promises ultra-fast processing speeds, it is somewhat similar to the NVME module used in the iPhones. A 4GB of DDR4 RAM is also included in the cost of memory. DDR4 is a faster option to the more traditional DDR3. Samsung Semiconductor Inc, again a subsidiary of Samsung Electronics manufactures both the components.
The body of the phone and the rear enclosure costs $ 28.20 or about Rs. 1800. This includes the metal mainframe as well as the rear glass panel made with Corning Gorilla Glass 5.
Camera
Both the camera modules and the Iris scanner combined cost $ 20.50 or about Rs. 1350. The rear camera module has a 12 MP sensor with Optical Image Stabilisation while the front has an 8MP shooter for selfies and a 5MP sensor for IRIS scanning. The front-facing camera has auto-focus feature as well.
Connectivity
The wireless module, Bluetooth, UI ICs and sensors combined cost a grand total of $19.10, which is roughly Rs. 1250. This includes the Bluetooth 5.0 module, dual band WiFi, all of the sensors combined along with the audio codec, GPS etc.
Battery
The battery, which caused billions in losses to Samsung, last year due to the Galaxy Note 7 fiasco costs $4.50, which is about Rs. 300 only. Although Samsung claims to have added a lot of protection to their battery, it costs a paltry 300 bucks. It is manufactured by Samsung SDI, which is a subsidiary of Samsung Electronics.
Other components include items such as printed circuit boards, assorted discrete semiconductors, connectors and other mechanical components costs $ 35 or Rs. 2275. Other contents in the box such as the earphones and the charger cost $ 15 in total.
Manufacturing cost per unit is estimated to $ 5.90, which is Rs. 385. The all inclusive cost to manufacture a Galaxy S8 comes to $ 301.60 without the cost of manufacturing it and $ 307.50, which is roughly Rs. 20,000, is the final landed cost to Samsung. Now, this cost does not include the cost of research and development or marketing etc. this is only the manufacturing cost of an S8 to Samsung.
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In comparison to last year’s Galaxy S7, which costs $ 255 to manufacture, the Samsung Galaxy S8 costs $ 52 more to manufacture per unit. This is mostly due to the dual curved edge infinity display. The BOM also show that it costs more to produce an S8 than it takes to produce a Google Pixel or an iPhone.
Refer this IHS Markit’s Preliminary Cost Summary:
(Editor’s Note: The images used in the blog are copyright of their respective owners. It is for representation purpose only.)
