Galaxy S20 Ultra, What are the manufacturing costs?
I analyzed the manufacturing costs of the top model of the Samsung Galaxy S20 series, the Galaxy S20 Ultra. Since it's also a model that's been flexing the camera, the price of camera parts is the highest, so let's take a moment to see what the total sum of the parts needed to make one Galaxy S20 Ultra is. Let's also compare the cost difference with the previous Galaxy S10 series and iPhone 11 Pro Max, and how much profit can be gained from a single sale.
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| Galaxy S20 Ultra |
TechInsights, a specialized IT media that breaks down various devices and analyzes production unit prices, released data that summarizes the cost calculation for the Galaxy S20 Ultra. Separate by parts required, analyze each detailed cost and add them all to calculate the cost of making a single product.
However, please be aware that the actual manufacturer's revenue from selling a single device is less than that because TechInsights does not assess the wide range of resources such as R&D, labor, transportation and marketing costs.
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| Galaxy S20 Ultra |
■ Manufacturing cost $528.50
The cost of the Galaxy S20 Ultra, which sells for $1,399 in North America and 1,595,000won in South Korea, is $528.5 and about 630,000 won in Korea won. When you sell a product, you can take a profit of 870.5 dollars and the price of the part accounts for 38 percent of the sales price. Of course, Samsung Electronics does not take all $833, and the profit from the manufacturer will be reduced by deducting the margins of retail stores, wholesale distribution channels, and the aforementioned fringe benefits.
Among the detailed cost items of the classified Galaxy S20 Ultra, the largest amount is the camera parts priced at $107.5. Given that it is the most important component of the Galaxy S20 Ultra, it is judged to be a sufficiently predictable proportion of the amount. Next is the AP processor, which serves as the brain of a smartphone, and the Qualcomm Snapdragon 865 is priced at $81, the second highest price for parts after a camera. The third was the 6.9-inch Dynamic AMO Infinity-O display, which cost $67.
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| Galaxy S20 Ultra |
■ $38.5 Up from Galaxy S10+ 5G
What is the cost difference compared to the Galaxy S10 Plus 5G model, the top-tier version of the previous Galaxy S10 series? The Galaxy S10+ 5G was $490 cheaper than the Galaxy S20 Ultra. At that time, the highest part was the $90, followed by a $70.5 AP processor price, followed by a $62.5 camera. The S10 5G model was the only rear-end quad-camera model in the series, and the price of the quad-camera module a year ago was $10.7.5 for S20 Ultra camera parts. Compared to the previous model, the price of display parts has been reduced, and processor prices have been changed from Exynos 9820 to Qualcomm Snapdragon 865, driving up costs.
■ Compared to iPhone 11 Pro Max?
What is the cost difference compared to the current top model of Apple, iPhone 11 Pro Max? If you look at the cost analysis for the iPhone 11 Pro Max 512GB model, which is priced at $1,449, the price is the same as the Galaxy S10 Plus 5G at $490. The result is that the S20 Ultra needs 38.5 dollars more to make than the iPhone 11 Pro Max, and the cost ratio of Samsung Electronics to sales is not bad, but it's less than 34 percent of Apple.
So we compared the cost of the Galaxy S20 Ultra with the previous model. What do you think? You might think that we're going to profiteer by paying a huge amount of money, and we're going to make a huge profit, and if we're going to put in a lot of different costs to make a single device, and we're going to put a lot of different costs to promote it, the manufacturer's going to have a good selling price. In particular, the price of camera parts has increased dramatically compared to the previous model, and considering the fact that the model has unique camera technology, I think it's a reasonable amount. However, manufacturers should not be negligent in making efforts to increase cost-effectiveness, as consumers always want to buy better specs at a lower price.