Galaxy S7 MWC Booth AH 8

It costs Samsung $255 to Manufacture a Galaxy S7

March 14, 2016 - Written By Alexander Maxham

When it comes to the price of your smartphone, a lot of things go into that price. The price alone isn’t how much it costs the company to manufacture that device. A lot of times, especially with bigger companies like Samsung and Apple, the price also factors in their advertising budget, R&D and of course their profit. The Galaxy S7 is retailing for around $650-700 in the US depending on which carrier you buy it from. Unfortunately the company is not selling the device unlocked or SIM free in the US. Now with the device costing $650 to buy brand new, it’s pretty astounding that it costs only $255 to make the device. At least that is according to a report out of Re/Code.

Now we’ve seen these prices before for flagship smartphones, where the device actually only costs about $200 or less to manufacture, but it sells for much more. Take the iPhone for example. It sells for about the same price as the Galaxy S7, but costs under $200. That’s a pretty big profit margin. Most companies reinvest that profit into R&D and marketing, so they can make the next smartphone even better, and sell even more of these flagships.

According to the report, the most expensive component of the device is the Qualcomm Snapdragon 820. Which means that the Exynos variant being sold in much of Europe, is likely even cheaper. While no exact price was given for the price of the Snapdragon 820, it is important to note that Samsung is actually manufacturing the Snapdragon 820 in their own facilities. After having struck a deal with Qualcomm – although that was mostly so that Qualcomm could get their largest customer back in their pocket.

The Samsung Galaxy S7 went on sale last Friday in about 60 countries worldwide. The company stated that pre-orders were higher than they were for any other Galaxy device, especially in Europe. So far sales have gone off without a hitch and Samsung has been selling loads of devices. Making for a pretty good launch, even better than the Galaxy S6 launch last year. The Galaxy S7 is available at AT&T, Sprint, Verizon, T-Mobile and US Cellular here in the States.