When Samsung Galaxy announced the S6 and S6 Edge a while past a lot of us were shocked that the corporate did not push the edge model more. however the reality was that this device was additional complicated to make and generated less profit for the firm than its “flat” S6 varient. currently Samsung has got eliminate the quality device, and offers only phones with a curved edge and it is clearly going to affect profitability.
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The Samsung Galaxy S8 price $307.50 per unit. that is a jump from last year’s Galaxy S7 Edge which price $271.20 to supply. By way of comparison, the iPhone 7 value just $224.80 to supply, $82.70 less. The Galaxy S8 is the most costly phone to produce currently on the market.
Samsung Galaxy charges $720 for the S8 with no carrier ties. That leaves concerning $420 in potential revenue from every sale, however of course Samsung will have any value in every sale. The build value also ignores things like promoting, shipping price and, most important of all, R&D.
The cost of manufacturing the phone cuts into its gross margin substantially, and promoting and shipping price will eat into it further. Samsung’s ads spend on the S8 alone must be quite staggering. And while none of this is unhealthy story for Samsung, it does mean that it’ll have to sell additional units to keep shareholders happy.
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The great news is that the phone is outselling the S7, according to Samsung. Some analysts counsel the firm might sell 50m S8 handsets this year. Samsung has clearly opted to use top-quality elements. this can only be seen as a positive sign, and no doubt a part of that has come from its need to build the S8 a roaring success to recover some of the cost it lost with the Note 7. it’ll additionally need to avoid additional exploding phones.
Presently leading the pack on cheap-to-produce smartphones is Huawei’s P9. what is interesting is that the P9 is truly a superb phone, with a good camera system, and is extremely nearly as well-built and solid as Samsung’s devices. it’s just $205.30 price of materials and construction value baked into its build value.
Google’s pixel XL is also expensive at $285.80, simply a bit less than $22 cheaper to supply than Samsung’s high-end phone.
In the future although, it is seemingly that Samsung’s Galaxy investment in the S8 will pay dividends when it launches a brand new Note 8 later this year. What the corporate spends currently should help it design a additional efficient and cost-effective device next.
