Samsung’s latest Galaxy S6 Edge is a pretty expensive device. But, for buyers, it costs less than the iPhone 6 Plus. Now a teardown analysis of the S6 Edge by IHS has revealed that it is more expensive to build than the iPhone 6 and 6 Plus both. It means Samsung is giving up a lot of profits to make the S6 Edge affordable to buyers.
Galaxy S6 Edge costs $290 to build and assemble
Arik Hesseldahl of Re/code reports that the Galaxy S6 Edge is the most costly Samsung phone yet to build and assemble. According to IHS, the 64GB version of Verizon Galaxy S6 Edge costs Samsung $290 to build and assemble. By comparison, the Galaxy S5 costs $256 to build. The total bill of materials is $247 for 128GB iPhone 6 and $263 for 128GB iPhone 6 Plus.
Joel Greenblatt Owned Hedge Fund On Why Value Investing Isn’t Working Now
Acacia Capital was up 12.27% for the second quarter, although it remains in the red for the year because of how difficult the first quarter was. The fund is down 14.25% for the first half of the year. Q2 2020 hedge fund letters, conferences and more Top five holdings Acacia's top five holdings accounted for Read More
IHS analyst Andrew Rassweiler told Re/code that the cost of components has been rising steadily in recent years. Buyers pay less for the Galaxy S6 Edge than iPhone 6, but it costs Samsung more to build the phone. Not surprisingly, the most expensive component in the S6 Edge is its dual-edge display, which costs a hefty $85 per unit.
Galaxy S6 Edge uses a Qualcomm-made baseband chip
The second-most expensive component is the Exynos 7420 processor. The chip is built on Samsung’s 14-nm FinFET technology. It costs Samsung $29.50 per unit. Both Galaxy S6 and S6 Edge sport 3GB DDR4 RAM, which adds $27 to the cost of materials. Another Samsung-made component, the 64GB flash memory, is estimated to cost $25 per unit. The teardown also revealed a Qualcomm-made baseband chip that costs $15.
The 64GB Galaxy S6 Edge retails for $699 without a contract. Samsung makes many of the major components used in the phone and it could easily negotiate better rates from suppliers. So, it’s hard to know the accurate cost of building and assembling the phone. And the $290 bill of materials doesn’t include R&D, patent licensing and other expenses. Anyway, Samsung has made it clear that it is willing to sacrifice margins to beat the rivals.