The True Cost of Samsung Galaxy S23 Ultra: Manufacturing Costs vs Retail Price Analysis

It’s mostly Apple who gets criticized for making their phones overpriced considering what the manufacturing costs are. Apparently, it’s usually a crazy disparity between production costs and selling price. But most people forget that in these presented amounts there is not only the price of the hardware, but other costs that must be reflected in the final price. Here we have, for example, the costs of people, administration, marketing, support, SW development, HW development itself and many other small things that will dramatically increase the cost per piece as a result. So when we look at what should be the manufacturing cost of a high-end phone Samsung Galaxy S23 Ultrawhich were calculated by the analytics company Counterpointso she claims that the phone, whose official the price is $1199, costs only $469 in manufacturing costs. That’s not even 40% of its retail price.

But if we look at Samsung’s finances, we will see that the situation definitely does not look like Samsung is overpricing its phones and has a 60% margin on them. For the most recent quarter, the phone division reported revenue of 30.74 trillion Korean won, while the division’s operating profit was 3.94 trillion. won. The actual operating (not net) margin of the phone division is thus just under 13% and no more than 60%. While it’s likely that the margin on the Galaxy S23 Ultra is larger than the other phones (not just by size, but by ratio), the hardware for the S23 Ultra may cost that $469, but with all other costs factored in, applying the division’s average margin the cost of it was up to about 1040 USD.

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Samsung Galaxy S23 Ultra

Counterpoint claims that a full 35% of the hardware price (approx. 165 USD) will be taken by the computing part and the modem, i.e. mainly by Qualcomm. Another 18% take the display (approx. USD 85) and 14% the camera system (approx. USD 65). These two parts are handled by Samsung itself. Memory makes up 11% of the price (about 50 USD), packaging and construction 8% (35-40 USD). When it comes to components, Qualcomm makes up the largest part of the phone in terms of price, and Samsung itself is a close second.

2023-06-03 22:00:34
#Samsung #Galaxy #S23 #Ultra #cost #manufacturing #costs #retail #price

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