Saturday 10 December 2016

Samsung Galaxy S7 only costs 250 quid to make!

Daniel Anderson

Published 15/03/2016 | 12:58

Samsung Galaxy S7
Samsung Galaxy S7

Samsung has recently launched the Galaxy S7 around the world and this premium smartphone is getting a huge markup

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Samsung has just launched the Galaxy S7 around the world - their latest premium handset and one that is already receiving rave reviews. With a gorgeous design, top quality camera and high performing specs, it's bound to be one of the best sellers of the year.

If you wanted to pick up the phone Sim free right now you'd likely pay more than €600, which is roughly what a new premium smartphone costs these days. However, you might be interested to note that the hardware components inside the S7 actually cost significantly less. How about less than half, or close to €250 all told ?

That's quite a markup, with the facts coming via a teardown by IHS. They broke apart a shiny new smartphone and priced the indivdual components, including that Qualcomm processor and camera module, seperately and the cost came up to this much lower sum. Now it's easy to say that Samsung is just doing this to make a huge profit, and there's no doubt that the company will make a tidy sum on every unit sold, but the picture isn't quite so simple.

Consider the fact that every aspect of the look of the device had to be carefully designed and refined over the last several months, and that the the way it all fits together needed just as much care and attention. Then there are costs like delivery to countries all over the world, and different import taxes and duties as well as the deals the company enters into with various networks to ensure a low starting price. Add in a global marketing campaign including a major press event at Mobile World Congress and it's safe to say that margin will be much smaller by the time it actually reaches Samsung's coffers.

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