Smartphone manufacturers tend to make more money on premium smartphones as they have a higher profit margin. Samsung may sell tens of millions of affordable devices but its flagships are the ones that really bring in the money. It will be looking to rake in some serious money with the Galaxy S10 series. One can imagine that the company has a healthy profit margin on the devices.
How healthy, though? Companies never reveal the true cost of manufacturing their devices and the markups they apply to make money. A simple calculation of the expected bill of materials cost of the Galaxy S10+ suggests a profit margin of over 50 percent. However, it’s unlikely that’s how much Samsung is making on each unit.
Galaxy S10+ seemingly has a materials cost of $420
A summary of the BOM cost by TechInsights suggests a manufacturing price of $420 for the 8GB+128GB variant of the Galaxy S10+. That’s about 42 percent of its $999 retail price. The most expensive component is understandably the Infinity-O display at $86.50. The processor and modem are next at $70.50 followed by the $56.50 triple-camera system.
This suggested cost doesn’t take into account the money spent on research and development of this device. Flagship devices require significant investment in R&D and Samsung pours billions into these efforts every year. Furthermore, the cost doesn’t reflect expenses for auxiliary materials, assembly, shipping, promotions, discounts and more.
Even if on the face of it the Galaxy S10+ costs 42 percent of its $999 retail price, the difference isn’t what Samsung is pocketed. It’s difficult to really be sure just how much Samsung is making on each Galaxy S10 model sold. However, once all of the other costs are taken into account, it’s pretty unlikely that there’s a profit margin of over 50 percent on the new flagship.
The post Is Samsung making a 50% profit on every Galaxy S10+ sold? appeared first on SamMobile.
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