Through the looking glass: Rising smartphone costs are inevitable, but many components are also getting expensive to fund the research and development of ever smaller chips. Tear downs of the Galaxy S10+ show that margins may not be as high as they once were when non-physical overhead factors such as marketing are amortized over the product life cycle.
Samsung had its moment in the limelight showing off this year's latest and greatest of the Galaxy series. With ever rising phone prices across the board, do the components inside and development costs really warrant such massive price hikes? Some enthusiasts from TechInsights received their Galaxy S10+ and tore it open to put together an estimate of build costs.
The Korean model that was ripped apart for information gathering purposes contains an 8nm Exynos 9820 as opposed to the Qualcomm SoC that will ship in US variants. As a result of die shrinks and known wafer pricing, it is believed that the S10+ processor costs $10 less than the S9+ processor.
Looking at the outside of the phone, the fancy new display with camera cutout is estimated to cost $9 more than the previous generation. Still, at roughly $86.50 for one of the best mobile displays in existence, its hard to expect much lower.
Increasing the base storage amount to 128GB up from 64GB is sure to add some cost. Bumping the RAM up by 2GB as well also adds a few dollars. Memory totals just over $50, with an included 128GB microSD card adding around $12 to the total build cost.
Adding on additional cameras also results in additional build costs. However, at a total of approximately $56.50 for a total of five cameras, these components are not terribly expensive either.
In the end, all of the physical materials, testing, and assembly costs run up to $420 for the Exynos Galaxy S10+. This still does not account for marketing, software development, and other overheads that exist. Samsung's track record of updating Android versions in any timely fashion is poor, but software development is still a cost that exists.
While it is still subjective as to whether all of the newer hardware warrants the lofty price tags of flagship phones, at least we know that Samsung is not out to completely gouge on pricing. Marketing and overhead expenses can quickly add up, leaving thinner margins than many would guess.