The smartphone industry provides plenty of options when it comes to price. The high-end of the market, which includes the so-called flagship devices, offers the heyday of the entire industry.
Any new technological advancement in the industry is almost immediately incorporated into this category.
Because of that, phones in this category are usually costly – and the uptrend never ceases to stop. Premium phones have normalized the four-figure dollar price tag, but you may wonder how much it costs to make them.
Counterpoint’s Components research practice gives us the best look at that. The team breaks down the real cost of making the recently announced Samsung Galaxy Note flagship phone, the Note 20 Ultra 5G.
Starting with under the hood, Qualcomm’s Snapdragon 865+ processor costs $57 while the 12GB of memory and 128GB of ROM costs $61.50 in total. Connectivity features, including the baseband processor and radiofrequency system, WI-FI, Bluetooth, NFC, etc., costs $107.
That impressive 6.9-inch edge Quad HD+ (3088×1440) 120Hz AMOLED display with Corning’s recently launched Gorilla Glass victus on top adds up to $91.50.
The camera module costs $60.30, while the 4,500mAh battery and related features cost $11.60.
The components are many, and these are just a summary of the most notable ones. In total, the cost of components that make up the Galaxy Note 20 Ultra 5G is $468 (Bill of Materials, BoM).
But that’s not the whole story.
Add the cost of assembly, and testing, IP rating support, charger and cables, the S Pen($25), sales box, and other included accessories, and the total BOM rises to $548.90(around KES 60,000) compared to over 2x the retail price of the device.
The Galaxy Note 20 Ultra 5G retails at $1299(~KES 141,000).
Some may say that’s too much markup but, trust me, the relationship between BoM and retail price is tricky.
According to Senior Analyst Ethan Qi, “The total BoM cost achievement is slightly under $550 with the component cost making up around $468, which is a commendable for a device with a list price of $1299.”