Looks like Samsung is putting more dime into its latest flagship device than it has with the Galaxy S8’s predecessors.
According to an IHS Markit teardown, the South Korean company is spending as much as $43.34 more on materials for its S8 than it did for the Galaxy S7 as it looks to recover from its Galaxy Note 7 fiasco.
The teardown found the S8’s 64 GB of NAND flash memory comes with a materials bill of $301.60, plus basic manufacturing costs of $5.90. That brings the total cost to make the S8 to $307.50, some $43.34 more than it spent on the S7 and $36.29 higher than the build cost of the S7 Edge. The S8 is retailing for around $720.
“The higher total BOM costs for the Galaxy S8 seem to be part of a trend that reflects something of an arms race in features among Apple, Samsung, and other phone manufacturers, as they all try to add new and distinguishing hardware features,” Andrew Rassweiler, senior director of cost benchmarking services for IHS Markit, observed. “While there are new non-hardware features in the Galaxy S8, such as a virtual assistant called Bixby, from a teardown perspective the hardware in the Galaxy S8 and that of the forthcoming new iPhone is expected to be very similar.”
The built-in storage on the S8 is double that found in both the Galaxy S7 and iPhone 7. IHS Markit noted the Samsung NAND flash memory and DRAM on the S8 come in at a cost of $41.50, while the battery pack cost comes in at just $4.50.
“While in previous years the cost per gigabyte has generally fallen in both the NAND flash and DRAM areas, we have seen rising prices in both DRAM and NAND flash recently due to some tightness in the marketplace,” Rassweiler added. “The cost of memory in the S8 reflects these recent market dynamics, even though we expect the erosion in memory pricing—something that occurs regularly in the memory market—to resume during the course of the year.”
Samsung’s decision to shell out for more memory comes as the company seeks to rebuild its reputation in the wake of its Note 7 recalls. YouGov BrandIndex recently noted that Samsung’s brand reputation hasn’t yet fully recovered from the Note 7 disaster.
The Samsung brand currently holds the number two market share position in the United States behind rival Apple. Samsung has 30 percent market share to Apple’s 38 percent, while LG is lurking in the wings with 18 percent market share, according to new figures from Consumer Intelligence Research Partners (CIRP). And changes are occurring in the Android space.
“We do see meaningful shifting of share among brands within the Android operating system,” Mike Levin, partner and co-founder of CIRP, commented. “Samsung seems to have suffered from slack demand still coming off the Galaxy Note 7 recall and in anticipation of the Galaxy 8 launch. LG appears to have eclipsed the remaining Android manufacturers and consistently captures the second-largest share of Android sales. Motorola persists with a small but consistent 4 percent share, while HTC has fallen to within the ranks of minor manufacturers in the US.”