Galaxy S6 edge bill of materials shows Samsung pursues wide profit margins like Apple

Galaxy S6 edge bill of materials shows Samsung pursues wide profit margins like Apple
According to a substantial report by the Wall Street Journal, the Galaxy S6 & S6 edge are more than just technological achievements for Samsung. By releasing its flagships completely sealed and devoid of microSD card slots, Sam charges more for memory pushes its profit margins to unprecedented heights that approach those of Apple's.

As you may be well aware, the Galaxy S6 & S6 edge are sold in 32GB, 64GB, and 128GB capacities, each costing $100 more than the one before it. Meanwhile, it costs Samsung about $13 more per unit to manufacture a 64GB Galaxy S6 / edge, and less than $26 more to build a 128GB version.

Thus, big S reaps $87 of extra profit per 64-gigabyte unit sold, and almost twice as much per 128GB unit sold. These estimates belong to Andrew Rassweiler, senior director of research and analysis at IHS. Rassweiler noted that Apple has been pricing the iPhone like this for years now.

IHS also revealed that the Galaxy S6 edge, which sells for $100 more than the regular Galaxy S6, costs $24 more per unit to make. This means each Galaxy S6 edge sold is at least $76 more profitable to Samsung. IHS puts the estimated Galaxy S6 edge bill of materials at $290.45 per unit, which makes it Samsung's most expensive flagship ever.

Although Samsung has positioned itself for wide profit margins by selling the Galaxy S6 edge at $799.99, it won't quite reach the Apple level of profiteering, which made it become the world's most valuable brand. The iPhone 6 Plus with 64 gigabytes of storage costs about $50 less to manufacture, but retails for $50 more.


source: WSJ

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68 Comments

1. cheetah2k

Posts: 2271; Member since: Jan 16, 2011

"Still, Samsung investors and shareholders will probably be delighted after the next earnings call. Customers - probably not as much." What exactly to you mean by this? Are you saying customers who buy the S6, will not be delighted to own it? A phone with the best of everything and still $50 cheaper than an iPhone with 2012 hardware lol If you want to be pathetic, you can easily say the same about your major sponsor Apple

4. FluffyBled unregistered

I ... uhmm ... have to agree with you!

8. cheetah2k

Posts: 2271; Member since: Jan 16, 2011

I can't believe phonearena even compared the iPhone 6 series to the Galaxy S6. For starters the component pricing will be Samsung's own internal supply structure which is heavily discounted. Street value would be double what they pay internally Also, for what you get for the money, for $50 less than the iPhone, the S6 is in a league of its own.. TBH what this article does is establish that Apple has failed to negotiate better supply prices on 2012 spec hardware components - but that's the reality of the situation when you DONT design and manufacture your own hardware. To keep Apple profits high, the customer loses out when you buy cApple Lets just say its definitely not comparing apples to apples... LOL

13. mixedfish

Posts: 1560; Member since: Nov 17, 2013

"For starters the component pricing will be Samsung's own internal supply structure which is heavily discounted. " How do you know this? Business 101 says that's not how transfer pricing works.

34. Finalflash

Posts: 4063; Member since: Jul 23, 2013

Business 101 says that having no middle man means no cut for the middle man....or was that common sense 101?

29. sgodsell

Posts: 7441; Member since: Mar 16, 2013

The iPhone 6 starts at 16 GB, where as the S6 starts at 32 GB. Plus its the fastest storage in the business UFS 2.0. The iPhone 6 is using eMMC 5.0. Enough said.

39. QWERTYslider unregistered

It's clear. No removable SD and battery are to INCREASE PROFITS. Only a idiot pays $650+ for a phone without them.

41. singhkaran9830 unregistered

So you don't become one, get a Chinese phone which offers these with a Mediatek Chipset.Games will run buttery smooth at 3fps.

5. arch_angel

Posts: 1651; Member since: Feb 20, 2015

i agree, accept the iphone is the one that's 50$ cheaper just sayin.

11. cheetah2k

Posts: 2271; Member since: Jan 16, 2011

I was just going off this "The iPhone 6 Plus with 64 gigabytes of storage costs about $50 less to manufacture, but retails for $50 more. " $50 more than the equivalent S6

30. sgodsell

Posts: 7441; Member since: Mar 16, 2013

I like the parts you left out. The iPhone 6 starts with only 16 GB of storage. The S6 starts with 32 GB of storage. The iPhone 6 is using slower eMMC 5.0 storage. The S6 is using the fastest storage in the business UFS 2.0. Plus the S6 has DDR4 1552 MHz ram. The iPhone 6 is using DDR3 800 MHz ram. You want to buy old junk. Then go with Apple.

6. Dude2014

Posts: 448; Member since: Feb 12, 2014

PA and most American tech sites are paid by Apple. Or maybe they are just fanboys? Lol

23. palmguy

Posts: 983; Member since: Mar 22, 2011

I seeing tech sites who gets 1st review phone/tablet/ watch are influenced by Apple favoritism while companys/review sites that speak how they really feel about Apple get blackballed by Apple. A sort of an elites forcing of getting what they want.

36. Finalflash

Posts: 4063; Member since: Jul 23, 2013

You don't have to speculate, google "ComputerBild blacklisted by Apple".

25. E.N.

Posts: 2610; Member since: Jan 25, 2009

that's the whole point.... people HAVE been criticizing Apple about huge profit from internal memory for years, but now that Samsung is doing it you don't want to talk about it. This new ultra-fast internal memory is clearly not as expensive as we thought and the only reason why they're pricing the S6/Edge storage options so high is to squeeze more money out of the customers. It's really that simple

28. j2001m

Posts: 3061; Member since: Apr 28, 2014

No, it costs Samsung less becuase they are making it, they also got get ther r and d back on them making it to start with, it's not like Apple using some other company tech now is it, get real

50. E.N.

Posts: 2610; Member since: Jan 25, 2009

If it costs Samsung less to produce, that's more reason to charge their customers less. Samsung Electronics covers a huge variety of electronic devices and components so they're going to spend more on R&D than your average company... that also gives them an equally large variety of ways to recover expenses (i.e. Apple buying their improved processors), so it's still no excuse to sell memory upgrades at rip-off prices.

57. Taters

Posts: 6474; Member since: Jan 28, 2013

Sure it is. You have to pay for the factories and the factory workers too. And not to mention the huge discount Apple gets from buying bulk. Samsung has to make up for the discount Apple gets somewhere. That plus the r and d. If anything, Samsung is the only one with a valid excuse.

64. E.N.

Posts: 2610; Member since: Jan 25, 2009

if you're going to come up with excuses, at least try and come up with good ones. If you're saying suppliers don't factor in work and labor costs when selling their products that's total BS. The simple fact is that when you pay $100 for more memory, Samsung pockets $87.

27. j2001m

Posts: 3061; Member since: Apr 28, 2014

All I going to say about this report is Samsung unlike Apple give you the fastest ufs 2.0 memory and hardware that cost way more to make then Apple, also Samsung will have done way more r and d to make the phones to start with then Apple, so they also need to make money

52. E.N.

Posts: 2610; Member since: Jan 25, 2009

Samsung could have sold the memory increases at higher prices without crossing the line of complete rip-off, and then relied on higher sales to make more profit. It costs them $13 for 64GB and they make $87. Spending a lot of money on R&D doesn't make that level of profit any less ridiculous.

33. Pinocchio

Posts: 141; Member since: Apr 14, 2015

Apple sponsor is a dime a dozen these days. Apple want to bribe everything in the world.

68. medicci37

Posts: 1361; Member since: Nov 19, 2011

Whatever apple is doing this is to high for a Android phone. I have the edge & UI sucks ass. Also paying a extra $100 for another 32 gigs is ridiculous

2. yoosufmuneer

Posts: 1518; Member since: Feb 14, 2015

I don't care much as some of it goes to R&D.

3. cheetah2k

Posts: 2271; Member since: Jan 16, 2011

And labour costs for assembly

7. Slammer

Posts: 1515; Member since: Jun 03, 2010

Damn. It's times like this that I hate being right. John B.

9. Martin_Cooper

Posts: 1774; Member since: Jul 30, 2013

NO WAY! I am sure my fellow apple haters have been saying that only Apple does this :(

10. namesib

Posts: 97; Member since: Feb 08, 2015

And we have people trying to defend Samsung's decision to remove microSD support. How naive do you have to be to think they did it for the sake of the consumers?

12. cheetah2k

Posts: 2271; Member since: Jan 16, 2011

I dunno.. less choppy 4K video playback/record, and faster USB transfers.. I'm ok with internal storage

14. mixedfish

Posts: 1560; Member since: Nov 17, 2013

LOL, so suddenly when there's an SD card in the phone you can't select 'record to internal memory'. Such a ridiculousness, that even the default settings in the camera app is set to internal storage. #fanbois

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