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April 14, 2015

With great power comes great cost for Samsung Galaxy S6 edge

by John_A

samsung_galaxy_s6_edge_exploded

The Samsung Galaxy S6 edge brings a lot of new innovation to the smartphone market and a new breakdown of the cost to produce the phone by research firm IHS reveals that innovation comes at relatively high cost. IHS recently took a look at the 64GB Verizon variant of the Galaxy S6 edge and estimated the cost for parts and assembly was about $290. That puts the Galaxy S6 edge about $34 per unit more than last year’s Galaxy S 5 and much higher than Apple’s iPhone 6 which is estimated to cost $247 to produce. The Galaxy S6 edge is currently retailing for $699 off contract. “This phone costs less than an iPhone to buy, but it costs Samsung more to build,” says IHS analyst Andrew Rassweiler.

Almost a third of the cost of the Galaxy S6 edge comes from the curved touchscreen display. IHS estimates the display and touchscreen elements cost $85. The next most expensive part is the Exynos 7 processor with a price tag of $29.50. Part of that high cost is likely due to the fact that the Exynos 7 is Samsung’s first chip that uses 14-nanometer technology in its production. The use of the new Exynos 7 cpu pushed Samsung to also produce new high-end DDR4 memory at a cost of $27 to pack in 3GB worth. The DDR4 memory is another first for a smartphone on the market.

Although the Galaxy S6 edge is expensive for Samsung to produce, their investment in new technologies and getting them to market first should help position them for future success. The fact that Samsung is selling the device at such a low price point relative to its cost to produce is also a sign of how serious Samsung is about regaining their market share momentum after the 2014 dip.

source: Re/code

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