The Samsung Galaxy S7’s manufacturing price tag is at least $255

by: John DyeMarch 14, 2016
1.9K

Galaxy S7 Teardown complete iFixit

When you sum up all the component parts of the Samsung Galaxy S7, it looks like your final payment will be around $255, at least according to the research team IHS who recently tore the device down and catalogued all of its pieces. However, before you start thinking you’re going to save yourself a cool $400 (the Galaxy S7 currently retails for $670 in the US) you probably should take into consideration the impossibility of acquiring these parts at bulk rates and the difficulty you’d have assembling them in your garage.

Galaxy S7 teardown teaserSee also: iFixit Galaxy S7 teardown reveals a worse repairability rating than the Galaxy S646

The teardown revealed that the manufacturing cost of the Galaxy S7 is about on-par with what it cost the Korean tech giant to make Galaxy S5 devices two years ago. From a design evolution standpoint, IHS describes the S7 as “more of the same,” which isn’t necessarily a slam on the device but a description of safe, incremental improvement to stay competitive with contemporary devices. One of the biggest component changes from the S6 model, and definitely the most expensive part of the entire handset, is the inclusion of the Qualcomm Snapdragon 820. The last member of the S-line used Samsung’s Exynos 7 chip. The Snapdragon 820 is valued at $62, meaning it’s worth almost 25% of the device’s full cost.

snapdragon 820 vs snapdragon 810

In a move that has puzzled some, the Galaxy S7 has taken a step backward in terms of megapixels when it comes to the device’s main camera. Although the S6 rocked a 16MP shooter, the S7 has backed it off to a mere 12MP. However, this only goes to show that megapixels don’t always tell the full story. The Galaxy S7 uses a new dual-pixel technology – the first time this tech has been used in a smartphone – to improve autofocusing, low-light clarity, and image quality across the board. IHS called it “the best camera on the smartphone market.”

23-Samsung-Galaxy-S7-Teardown-Camera-Module-Front-Facing-package

IHS’s full report is expected to be out later today. In the meantime, let us know what you think of the Samsung Galaxy S7’s build cost. More than you were expecting, or less? Give us your take in the comments below!

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  • $255, but if you take retail prices… In fact S7 cost is under $170 to manufacture it…

    • Adu-Mensah

      Manufacture?, does the $170 include labour cost, R & D etc?

      The price above is for only the parts. The SD chip alone costs $62. How do you manufacture that for $170.

      • Yes, WITH labor and R&D… Just stop using retail prices of hardware and start thinking…

  • Jaime

    That’s just the price of the parts. The manufacturing cost involves a lot of other things, such as electricity, machine burden, labor, etc.

    • James Tyna

      Not just that, Samsung has spent a butt load on marketing lately. Superbowl commercials are not cheap, and that also adds to the total price tag.

      • Miguel Ortiz

        And let’s not forget paying the people who design these

    • eXoguti097

      How much does the software side affect the price?

      • Jaime

        That too

  • Pinetrax

    And europe gets the (propably cheaper but about same performing) Exynos processor for the same price. Nice.

    • DBS

      Actually, it costs Samsung more to produce the Exynos than to use Qualcomm’s chips. The Exynos costs Samsung not only the production cost but also the engineering and the R&D.
      when they dropped the SD810 for the Exynos was simply because they foresaw that they’d incur in greater costs with unsatisfied customers and returns of overheating handsets than by using their own chips. And if I had to guess, the reason we got the Exynos in Europe is likely because Samsung is still not 100% sure about the 820 (or rather, they’re cautious after the disaster that was the 810)

      • Jake

        Can you blame them really? Qualcomm SOCs do tend to run allot hotter than other SOCs and that is before the release of the Snapdragon 810! Personally, I think Samsung should have stuck to using their own in-house Exynos SOCs rather than use those produced by another company. At least that way you know how the hardware in your products are gonna perform.

        • Kenrick Fernandes

          but but.. according to the 820 vs 8890, it has shown that the 820 is a bit superior (specially in the graphics department)

        • Johngir Hussain

          820 is made by Samsung for Qualcomm.

      • scoupdogg

        you are kidding right?
        it costs manufacturers more to produce something than to BUY it, its like saying, i will open a factory for chips, and instead of making them i will BUY them. makes no sense, and ofcourse using their own processor costs them way less thats why they use it.

        • Ivsil

          Did you read what he wrote? No, you didn’t because you’re a parrot repeting the same told by DBS

        • Johngir Hussain

          Incase you guys forgotten that 820 is made by Samsung for Qualcomm. So why samsung bother to make same product with different name? It’s all about money saving. ..

          • DDD

            It’s the same kind of product but not the same product. Anyway, Samsung gets paid for making Qualcomm’s chips. That’s income that they’d be stupid to give up just because they’re making their own. It’s the same reasoning behind making components for Apple too.

        • DBS

          I’m still trying to understand the logic behind your answer…

      • LethalLunatic

        blablablablabla

        The S6 last year was only released with their homebrew SOC. They likely avoided the SD810 because of all the bad rumours anyway. The S7 will probably sell similarly or slightly more compared to last years S6. Samsung is fully capable of using their own SOC’s and keeping the costs for that down. Why do you think others are doing the same? Huawei is doing it, LG is going to do it and Apple has been doing it. They would only do it if it is more profitable and if they can build it to their needs.

        They way you’re making it sound is if Samsung is small, they’re actually more capable than you think.

        • DBS

          Do you have any idea how business works? Or economics for that matter?
          Anyway:

          “They likely avoided the SD810 because of all the bad rumours anyway.”
          – They tested the chipset BEFORE the rumours even started. It failed their tests. And they publicly acknowledged it.

          “The S7 will probably sell similarly or slightly more compared to last years S6”
          – well it’s already starting strong. So yes, it’s very likely that it’ll sell more than the S6.

          “Samsung is fully capable of using their own SOC’s and keeping the costs for that down.”
          – It’s not a question of being able to keep costs down. For Samsung, it will still cost more to produce their own chipsets than to use someone else’s. There’s more to using a chip set than just manufacturing it. There’s the entire R&D process. THAT costs money. And those are reflected on the price of each individual chipset produced. Samsung’s chipsets also require Samsung investment. Which they could avoid by simply buying the already developed chip sets. If it was cheaper to produce chipsets in-house, every single OEM would do it and Qualcomm (and MediaTek etc) would all be out of business.

          “Huawei is doing it, LG is going to do it and Apple has been doing it.”
          – Huawei is a Chinese company, owned by the Chinese government and operating in China. Which means they have zero concerns about other production costs like, for example, fair wages. And even then, Huawei does NOT produce its own chipsets. It’s HiSilicon, a separate company. that produces them. Yes, that company is owned by Huawei however it does make a difference since the price of producing the chipsets isn’t part of the costs of running Huawei’s smartphone division itself.
          The rumours of LG producing their own chipsets have no basis. Sony was reported to be considering that but they too denied it.
          Apple operates in a different scenario because they doesn’t produce a single thing in house. All the manufacturing is outsourced. So Apple only has the cost of R&D for the chipset. AND not only that, Apple only produced one type of chipset for one specific phone which is sold for 7 times more than it costs them to produce it.

          Samsung is not small AT ALL. They even build Korea’s military arsenal for Christ’s sake. HOWEVER, it has nothing to do with being small or large. It has to do with being economically smart. If buying chips developed by third parties is more cost effective to them – and it normally is – then they go for the third party chipsets instead of burning money in their own chipsets. And since Samsung already produces, as you correctly pointed out, the SOC’s for those third party companies, it makes even less sense for Samsung to spend time and resources in adding yet another chipset to manufacturing. Economically it just makes sense: Samsung doesn’t spend money on major SOC’s development, Samsung uses third party SOC’s which are cheaper and even gets paid to produce those same SOC’s they’re going to use.

    • Dave

      While Australia get the exynos for twice the price.

  • Natural Gamer

    How is it that the Galaxy S6 cost 275$ when it was first manufactured?

  • Nallaikumaran

    In fact, The 32GB S7 device components cost more than $270, The 16GB iPhone 6s plus device components cost only $215. The Google 6P $180. Where is the IHS news? (Link) Where is the evidence? The Google 6P’s manufacturing price tag is at least $180. Where is the news? android authority is a Google 6P reseller site. Highly misleading article.

  • Nallaikumaran

    In fact, The 32GB S7 device components cost more than $270, The 16GB iPhone 6s plus device components cost only $215. The Google 6P $180. Keep telling only half of the truth! LMAO. Where is the IHS news? (Link) Where is the evidence? The Google 6P’s manufacturing price tag is at least $180. Where is the news? Android authority is a Google 6P reseller site.

    Manufacturing cost + labour + Company’s profit + marketing and advertising + taxes + import charges + dealers and distributor’s profits + R.and D. + after sales service + updates and support + accessories cost + software. Highly misleading article.

    The biggest lure for investing in a S7 this year is the free gear vr on pre-order ($99).

    • King_Android

      If they release their mobile division sales and expense numbers this shouldnt be too hard to figure out. Plus any tear down will give the component cost. Maybe this could be an internal number that got leaked. At the end of the day who cares. We know these phones truely arent worth the price they go for when there are numerous of other phones with similar tech for much lower prices.

    • DDD

      Did you count all those other additional costs for the 6P and iPhone too, or are you yourself being biased? Then consider that the 6P costs more than $200 less. I know this site is going to hide the not so favorable stuff about the Nexus line, but at least call them out for the stuff they’re really wrong on.

    • Major Sceptic

      Off course it’s a Bullshit figure, taking account only the list price of parts doesn’t take into account the many costs of doing business.

  • Jfdryhbn

    Indecent margins. Thank you, capitalism!

    • Ry

      Read above. I’m no fan of capitalism tho..

  • aaloo

    Funny how no one is calling Sammy ma boy greedy. I guess it only works if a certain other company sells a phone for 3x what it costs in materials. $250!!!! This phone should be sold for $278.99 max. Sammy ripping off their sheep.

    • staylow

      Advertisements, R&D, assembly, labor, facility costs and software development add a lot to just the straight up cost of the parts shown in this article. Take an engineering economics class and you’ll have a pretty good understanding of the overhead required for a top tier device like the S7.

      • DDD

        But does all that push it all the way up to almost $700 though and wouldn’t assembly be counted under labor? Considering the fact that Samsung doesn’t make its software and hardware for only the S series, the cost of labor, storage, R&D and SD would span over all of Samsung’s devices, not just the S series. It still shouldn’t be that expensive.

    • Ikhsan Hasbi

      I have a better idea, how about you buy all the parts for $278.99, assemble it yourself in your garage then operate it with your own software. Sounds like a good deal, right?

  • Johngir Hussain

    What a fool world! What a buzz!!! Why samsung using 820 instead of its own chip???
    The answer is simple because samsung made 820 for Qualcomm. Samsung and Qualcomm agreed to work together after the last year’s 810 problems. It was win, win situation for samsung. I don’t need to say anymore. .do your math!

  • Snappie

    I’d be okay with 100% of the average manufacturing costs but 200% is a bit extreme

  • Juan Dela Cruz

    It’s a mass production, that’s the reason why.