Samsung makes upto $88 on sale of each Galaxy S8

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.

Read: Samsung to fix Galaxy S8 red tint display issue with a software update next week

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.

Read: Samsung may delay Galaxy S8 and S8+ shipments due to supply shortage

via The Korean Herald

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Nuzhat is a day-dreamer with imaginations running sky-high. Her love for tech is a recent one which she is still unwrapping and trying to decipher. Once a news-savvy journalist, she is now a tech-savvy author. Email: nuzhat@theandroidsoul.com
  • Rishab Warrier

    I’m assuming they had to reduce the profit margins to reduce its price.After that huge outbreak of exploding phones they had to do all they can to bring a marvelous phone at an affordable price and they have!

    • Nick Schellevis

      Affordable is relative. For most people it’s a lot of money.

      But these numbers: $88 per phone. Say they’ll sell 50 million. That’s a lot of money.

      • Rishab Warrier

        Well compared to the S7 whose Cost Of Production was around 250$ and seeing it was sold around the same price ,I’m assuming the margins were a bit higher.

        • Nick Schellevis

          You’d say that, put I believe production cost for the S8 is arount $300 (read it somewhere; NAND flash is more expensive these days, new sensors etc.), and they sell it for $100 more than the S7.

          Also, those production costs are just a part of the costs. Think about R&D, salary, shipping etc. I’m not that sure they made that much more per phone with the S7.

      • Aditya Pradhan

        Agreed. Though, considering Samsung is seeing the highest number of pre-orders from South Korea itself, it has to shell out lots of additional freebies, like the Samsung Dex and bluetooth speakers. Considering the response though, the company will have a pretty sweet year indeed.

  • Vishal Giri

    wow!! only 88$ profit, I thought they were making a 200$ of profit on each device by pricing it so high, but looks like the infinity display in such a small body is truly costs that much and for people to buy there beautiful Beast they reduced there margin to 88$ only, great work samsung!!

    • Aditya Pradhan

      Although compared to other flagship phones, it might seem less, they are actually making a lot of money here. Roughly 10% profit on a smartphone, that is being ordered in millions, with Samsung investing a lot in the marketing, it is entirely a possibility that they reach the 50 million mark, then we are looking at a 10 figure mark, and in dollars too 🙂

  • Samsung is playing this one pretty close to the chest. And they probably cut down the profit margins to keep the prices at an acceptable level and not raise any eye brows. Samsung needed the s8 to click. They had a lot to prove as well as survive after the note 7 chaos. Even with a smaller margin like 88 bucks, the sheer amount of phones they will sell will really keep their head above water and help them reach their targets.

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