Subsequently, the highest-end Galaxy S series model, the Galaxy S23 Ultra has a starting price of $1,199.99. This is the model with 8GB of RAM and 256GB of storage. Obviously, the pricing point is on a higher node but it won’t stop the phone from becoming the fifth best-selling smartphone in the first quarter of 2023. While, as per the bill of materials (BoM) analysis done by research firm Counterpoint. The component cost is 39 percent of the price of the phone.
To be specific then the chipset and cellular components aggregate the bulk of the cost. This is 35 percent of the total BOM. Moving next then the display is the second most expensive part. This accounts for 18 percent of the total BOM. Other costly components comprise the camera accounts for 14 percent, memory accounts for 11 percent, and casing for 8 percent respectively.
BOM total cost of the Galaxy S23 Ultra
Whereas, the other elements like PCB, waterproofing, vibrator and inductors come comprehensively comes at 15 percent of the BOM. Additionally, the BOM total cost of the Galaxy S23 Ultra comes out to be $469. Clearly, this is not the cost as same as the total cost of making the phone. Here, BOM only considers the materials and parts required to make a product.
The cost doesn’t comprise the other costs that are incurred during the making processing including labor, overhead costs, quality control, testing, assembly, and software. Talking about the components made by Qualcomm, then it is the customized Snapdragon 8 Gen 2 chip, fingerprint reader IC, power management ICs, RF power amplifiers, audio codec, GPS, Wi-Fi + Bluetooth, and Sub-6GHz transceiver, on total this accounted for 34 percent of the BoM cost. While Samsung-made parts like NAND flash, the AMOLED screen, as well as the main and the front cameras are 33 percent of the total BoM.
BOM cost for Apple’s iPhone 14 Pro Max for comparison
For making the comparison, the BOM cost for Apple’s iPhone 14 Pro Max with 128GB of storage is $464. At the same time, it retails for $1,099. This indicates that 42 percent of the selling price can be allocated to the components.
Therefore, based on the above figure alone, it seems like Samsung has a higher margin percentage as compared to the other top smartphone makers. Although actual profit margin cant is come out without considering all the costs.
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