Samsung Galaxy S8 predictably costs more to make than S7 and S7 Edge, way more than iPhone 7

Samsung has hardly struggled financially on the heels of the badly damaging Galaxy Note 7 double recall, compensating with steady S7 demand, strong sales of lower-end phones and especially sizzling hot mobile components like chips and displays.

Still, the company’s prosperity going forward greatly depends on the Galaxy S8’s box-office success, which so far looks solid, as well as profit margins. Once again, the chaebol can’t keep up with arch-rival Apple when it comes to the difference between its flagship’s manufacturing costs and retail price, even though the latter is on the rise.

Unsurprisingly, the same goes for the former, according to the latest teardown performed by IHS Markit. After taking a peek under the hood, the analytics “world leader’s” preliminary BOM estimate for the Galaxy S8 exceeds both the S7 and S7 Edge’s bill of materials by $43.34 and $36.29 respectively.

In layman’s terms, Samsung spends around $307.50, including $5.90 in “basic manufacturing” fees, on every 64GB Galaxy S8 unit it makes and sells starting at $720. The number probably goes up as far as the S8+ is concerned, but of course, so does the MSRP.

In comparison, an “entry-level” 32GB iPhone 7 sees Apple cough up an estimated $224.80 on materials and “basic” production labor. Neither figure includes marketing and advertising expenses, which are likely also higher in Samsung’s camp.

As always, the priciest component is the touchscreen-integrated display, valued at a whopping $85 on the “regular-sized” GS8, with $45 spent on the Korean variant’s Exynos 8895 chipset, $41.50 worth of memory, $20.50 camera modules, all the sensors totaling just $6.50, and “box contents”, including AKG-tuned earbuds, costing a combined $15 to make.

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About The Author
Adrian Diaconescu
Adrian has had an insatiable passion for writing since he was in school and found himself writing philosophical essays about the meaning of life and the differences between light and dark beer. Later, he realized this was pretty much his only marketable skill, so he first created a personal blog (in Romanian) and then discovered his true calling, which is writing about all things tech (in English).