Samsung launched their S23 series of handsets last February. The most premium model in this series is the Galaxy S23 Ultra, currently priced around Rs 1,25,000 in the Indian market. And in the US, its price starts from $1,199 (about Rs. 98,710). As a result, the current price makes it one of the most expensive Android smartphones in the market. But, do you know how much it costs Samsung to make the Galaxy S23 Ultra? You will be surprised to hear that the production cost of the phone is less than 500 dollars (about Rs. 41,200). Let’s get to know this topic in detail.
The selling price of the Galaxy S23 Ultra is 154% higher than the production cost
Counterpoint Research has delved into the Bill of Materials (BoM) of the Samsung Galaxy S23 Ultra. They claim that the materials cost Samsung $469 (about Rs. 38,620). That’s 154% less than the starting model’s retail price Although the manufacturing cost is considerably less than the selling price, the $469 BOM is much higher than other phones. And, based on the bill of materials, processing and cellular costs account for 35% of the total bill. Which is provided by Qualcomm.
On the other hand, the total cost of camera and display components is around 32%. Casing takes up 8%, while memory accounts for 11% of the total manufacturing cost. And 15% of total production cost of other components of Samsung Galaxy S23 Ultra. Which includes PCB, MLCC, waterproofing, vibration motor and other features of the phone. However, Counterpoint Research did not provide clear information about the assembling, testing, software and other related costs of the Galaxy S23 Ultra. Incidentally, Counterpoint Research is one of the trusted global technology market research firms in the TMT industry. So, there is no doubt about the credibility of this report.
As it turns out, the total cost of materials used in the Samsung Galaxy S23 Ultra is $469. Naturally, the question arises that where is this amount of money going, is Samsung putting all of it in their pockets? Not really. As mentioned earlier, other aspects of the phone are not included in the bill of materials shared by Counterpoint Research. It has only priced the components inside the Samsung Galaxy S23 Ultra. However, it does not mention any information about software, assembling, testing, IP&R and other related costs. Although, the exact information regarding this is not known at the moment, but the total cost for the Galaxy S23 Ultra should be more than $479. And Samsung is definitely not making 154% profit from selling the device. Instead, it can be assumed that the company’s profit margin is less than 100%.
For that reason, the Galaxy S23 Ultra’s bill of materials might make one think the phone is cheap to build. However, the cost of sourcing materials and preparing all aspects of the phone must also be considered According to the information emerging from the report, Samsung is giving the largest share of production costs to Qualcomm, and this may be why the company is planning to use their in-house Exynos 2400 chipset for the next Galaxy S24 series in certain regions. But this cannot be confirmed now. Hence, Samsung is likely to spend the most on sourcing Qualcomm components for the future Galaxy S24 lineup.
