How much does it cost to produce the phone? Quite a few…
Almost every day we bring you information on mobile equipment. We try to make sure that no hot launches “fly past your nose”, but we also keep in mind the less obvious proposals of manufacturers. In the vastness of descriptions and specifications, one of the most important features is the price. Everyone pays attention to it.
However, in the world of technology, there are two types of device cost. The one that the manufacturer wishes and the cost of producing the equipment. It is worth looking into, because the difference from the store price is quite large, not to write colossal.
Smartphones cheap as borscht… in production
Prices of top phones usually settle around $600 – $800 on the day of release. While the cost of manufacturing such a device closes in the range of $200 – $250. Examples can be multiplied, so let’s focus on the most popular models (the principle is generally the same for all manufacturers):
- Apple iPhone 4 (16GB): production cost – $188/suggested price at launch – $599.
- Apple iPhone 5 (16GB): 207 USD/649 USD
- Apple iPhone 6 (16GB): 200 USD/649 USD
- Samsung Galaxy S3 (16GB): 213 USD/549 USD
- Samsung Galaxy S4 (16GB HSPA+): 244 USD/579 USD
- Samsung Galaxy S5 (32GB): 256 USD/660 USD
The production costs listed above include the cost of components and assembly of the device. As you can see, the most popular smartphone families bring their manufacturers quite large profits, in the order of 60 – 70% per unit sold. Can you imagine the latest model of iPhone’a at a price of $300 (about £1000)? Certainly yes.
Moreover, many people may ask themselves a simple question: why am I overpaying so much?!