Cost of building Samsung flagship phone rises

By Mark Gurman

Samsung’s latest flagship phone costs more to build than the previous model after the South Korean technology company upgraded the device’s camera, according to research firm TechInsights.

The new Galaxy S9+ smartphone cost $379 (€306) to build, up from $343 for last year’s Galaxy S8+, TechInsights estimated. The S9+ has a more advanced camera system that includes a second rear camera. Those components cost $48 versus $32 on the S8+.

As smartphone cameras have improved enough to be the go-to picture-taking devices for most people, photo quality has become a major battleground between Apple, Samsung and other mobile technology companies.

For the new phone’s rear dual camera, Samsung combined one of the 12-megapixel camera sensors from the earlier Note 8 with a new 12-megapixel wide-angle sensor, while also re-using a front 8-megapixel camera from previous models, TechInsights said.

The other key phone technology battleground is the display, although here costs declined. The most expensive component inside the S9+ is the 6.2-inch Oled screen, which comes in at $72.50. That’s cheaper than the similarly sized screens in the Note 8 and S8+, which cost $82 and $78.50, according to the analysis.

This is followed by the main phone processor coming in at $68 and memory components at $51. The analysed phone uses a Samsung-designed processor, while Samsung models in the US have historically used Qualcomm processors.

The device TechInsights took apart includes Samsung’s Exynos 9810 chip, which has a new modem that’s potentially faster than last year’s models. The average US price of the S9+, through wireless carriers, is $903.30, suggesting Samsung has a 58% gross profit margin after the costs estimated by TechInsights.

Samsung also sells the device on its website for $840, resulting in a 55% margin. That compares to 61% estimated margins for Apple’s iPhone X, and 59% margins for the iPhone 8 Plus, according to TechInsights’ analysis.

Earlier this week, sources said Samsung C&T, an affiliate of the world’s biggest smartphone maker, is in talks for a multi-year deal to buy cobalt from a Congolese miner, joining Apple in the global rush to secure supplies of the metal at the heart of the electric-car boom.

- Bloomberg