The Samsung Galaxy S8 starts at a price of $720 in the US and Rs. 57,900 in India. We all know that brands sell their products at a higher price than the cost price to obtain profit, which can be used in the overall development of the company. The price varies based on taxes, marketing costs and a profit that the company targets. Astonishingly, the profit margin that Samsung gets from selling a single unit of the Galaxy S8 is way higher than what you expect.
IHS Markit, has mentioned that the manufacturing cost of a Samsung Galaxy S8 unit is roughly half of its selling price.
The latest analytics has claimed that the total bill of materials(BOM) for the 64 GB variant of the S8 is around $301.60(approximately Rs.19,500). Including the basic manufacturing costs, which is about $5.90, the total cost of the Samsung Galaxy S8 comes out to be $307.50(roughly Rs. 19,900).
It is worthy to note that the total cost is $43.34(about Rs.2,800) higher than the manufacturing cost of the Galaxy S7. Samsung is charging $720(about Rs. 46,500), which means that the South Korean company is charging a sum of $421(approx. Rs. 26,700) extra.
This is what Andrew Rassweiler, senior director of cost benchmarking services for IHS Markit had to say:
While there are new non-hardware features in the Galaxy S8, such as a virtual assistant called Bixby, from a teardown perspective the hardware in the Galaxy S8 and that of the forthcoming new iPhone is expected to be very similar
However, these numbers do not reveal the exact profit Samsung earns for selling a unit of the Galaxy S8. This surplus amount includes the marketing costs, taxes, retailer and carrier cuts, to name a few.