Samsung’s new flagship smartphone, the Galaxy S8, goes on sale in several countries including the U.S. today. The unsubsidized price for the premium phone starts at $720, but according to estimates by IHS Markit, it is Samsung that really pays the premium.
IHS regularly takes apart smartphones to figure out the price of their parts and ultimately give an estimate of the devices’ immediate production costs (excluding indirect costs such as marketing, R&D etc.). According to the company’s latest findings, the Galaxy S8 is particularly expensive to build compared to competing devices.
At $307.50, Samsung’s new flagship phone exceeds the production costs of Apple’s iPhone 7 ($224.80) by more than 35 percent and is $50 more expensive to build than its predecessor, the Galaxy S7. According to IHS’s Andrew Rassweiler, the increase in production costs of smartphones is the consequence of an arms race between Samsung , Apple and other manufacturers, who all try to one-up each other in the increasingly uniform premium smartphone segment.
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