The buzz around Samsung’s latest flagship phones Galaxy S8 and S8+ refuses to die down. These devices are receiving overwhelming response everywhere they have been released. While many onlookers may get fascinated by these stunning devices, the justified high-end price has left many annoyed. But is Samsung making all the hay (read money!) while the sun shines? May not be exactly.
A report straight out from the company’s parent country says that for every Galaxy S8 sold at a cost of 935,000 won ( approximately $828), Samsung is able to cash in less 100,000 won (which is $88.20) profit. That is, Samsung makes a profit of $88 on one unit of Galaxy S8, which is far far less than the $828 cost.
The Korean Herald quoted an industry watcher as saying:
It is reasonable to say that the profit per Galaxy S8 sold hovers below 100,000 won, although it is hard to calculate a detailed margin as the criteria of costs differs among companies.
As per the report, the calculation is based taking into account Samsung’s expenditure on marketing and other costs as well as the 10.8 percent operating margin of the company.
The 64GB Galaxy S8 smartphone’s production cost is estimated at $307.50, including parts, as per Industry tracker IHS. And if Samsung sells some 50 million units of Galaxy S8 smartphones, it stands to make a net profit of around 3.5-5 trillion won.
Samsung has already received over 1 million pre-orders for Galaxy S8 and S8+ and at this rate the 50 million mark does not seem too far fetched. Luckily, for Samsung S8 and S8+ has healed all the wounds caused by the Note 7 fiasco.