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How much does the Google Pixel cost to make?

According to IHS Markit, the new Google Pixel XL's bill of materials costs almost the same as its high-end competitors, such as the iPhone 7 and Galaxy S7.
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October 26, 2016
google pixel xl initial review aa (10 of 48) back glass featured

The new Google Pixel and Pixel XL certainly don’t come cheap, easily costing as much as Apple’s iPhone 7 and Samsung’s Galaxy S7, and it seems that there’s plenty of profit to be made with these high end phones. The production cost of a 32GB Pixel XL is just $285.75, including $7.75 in basic manufacturing costs, according to IHS Markit.

Given that the 32GB Pixel XL is priced at $769, that’s a $483.25 net income for Google. Of course, this is not including research and development costs, distribution, or the company’s biggest advertising budget to date (you may have seen one of the billboards), so actual profit from the handset will be a bit lower.

“Total BOM costs for the Google Pixel XL are, not surprisingly, in line with those of other competitors, because the supply base and specs are very similar from phone to phone—whether it’s an iPhone, a Galaxy-series phone or the Google Pixel XL” –  Andrew Rassweiler, senior director of cost benchmarking services for IHS Markit

When it comes to individual component costs, it’s the Samsung-built 5.5-inch QHD AMOLED display that costs the most at $58 a pop. The Qualcomm Snapdragon 821 processor is the next most expensive component costing $50, followed by $26.50 spent on the RAM and NAND memory package.

google-pixel-xl-exploded-view

Surprisingly, Google’s best in class camera package isn’t one of the more expensive items. The combined cost of the 8 megapixel front camera and 12 megapixel rear camera is estimated to be around $17.50. This would have cost notable more if the camera included optical image stabilization technology. The company spent more on Gorilla Glass 4 protection and the die-cast aluminum enclosure at a cost of $35, so the new design seems to have been higher up Google’s priorities list.

Google has certainly gone after the very high-end market with its new Pixel range, but the Nexus line-up was never a slouch in the hardware department either. Do you think that the new design justifies the higher price tag? Also, if you’re interested in the full bill of materials for a modern smartphone, be sure to check out the source link below.

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