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Samsung Galaxy S8 more expensive to manufacture than iPhone 7, Google Pixel

Hindustan Times — Anirban Ghoshal Hindustan Times Hindustan Times, New Delhi

April 21--Samsung Galaxy S8 is more expensive to manufacture when compared to its predecessors or even its rival Apple iPhone 7 and the Google Pixel, a new report has showed.

"The new Samsung Galaxy S8 equipped with 64 gigabytes (GB) of NAND flash memory carries a bill of materials (BOM) cost that comes out to $301.60, much higher than for previous versions of the company's smartphones," according to a preliminary estimate from IHS Markit, a market research and analytics firm.

According to the report, if $5.90 in basic manufacturing costs are added, Samsung's total cost to make the Galaxy S8 rises to $307.50 and the unsubsidised price for a 64GB Galaxy S8 starts at around $720 (making it possible for the company to have a margin of $412 approximately).

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However, this means that Samsung has to spend $43.34 more on one unit of S8 when compared to Galaxy S7 and $36.29 higher than the total build cost of the Galaxy S7 Edge.

"The higher total BOM costs for the Galaxy S8 seem to be part of a trend that reflects something of an arms race in features among Apple, Samsung and other phone manufacturers, as they all try to add new and distinguishing hardware features," said Andrew Rassweiler, senior director of cost benchmarking services for IHS Markit, adding that IHS Markit hasn't yet performed a teardown analysis on the larger Galaxy S8 Plus.

Interestingly, the Samsung S8 BoM also exceeds Apple iPhone 7 and Google Pixel. While the bill of materials (BOM) and calculated cost for manufacturing for an iPhone 7 equipped with 32 gigabytes (GB) of NAND flash memory sets back Apple by $224.80, the same calculation for Pixel sets back Google by $285.75 -- much less than S8's $301.60 expense.

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