I'm sure my eyes were not the only ones to tears at the leaked price for the upcoming Samsung Galaxy S10.
The report suggests that the most expensive S10 Plus model, which includes 12GB of RAM and 1TB of internal storage, costs $ 1,599. It's not so long ago that smartphones have surpassed the $ 1,000 mark, and it seems we can reach the $ 2,000 mark soon. Ouch!
The only extra you get if you choose the top variant is more RAM and more memory. As far as we know, nothing changes the specifications of the smartphone. However, the premium paid for this additional storage appears to be increasing exponentially.
Here is a breakdown of the leaked European prices, converted into dollars:
- Samsung Galaxy S10 Plus 6GB RAM / 128GB Memory: $ 1,193
- Samsung Galaxy S10 Plus 8GB RAM / 512GB Memory: $ 1,477
- Samsung Galaxy S10 Plus 12GB RAM / 1TB Memory: $ 1,818
(In the US, Galaxy S10 Plus prices are likely to be lower, but still not nearly affordable). 19659004] The difference between the 6GB / 128GB Galaxy S10 Plus and the 8GB / 512GB model is $ 284. In other words, you pay $ 284 for the extra 2GB of RAM and 384GB of storage.
That's already expensive, but switching from 8GB / 512GB to 12GB / 1TB could cost another $ 341. In this case, you get 4GB of RAM and 512GB of storage at $ 341.
Memory is not usually the most expensive component of a smartphone, usually the display and application processor. To be fair to Samsung, a state-of-the-art, high-capacity storage can often cost a premium. But is there a certain amount of price drop here?
How much does memory really cost?
Determining exactly how much RAM and NAND Flash memory costs is a tricky business, not least because component prices are almost equal to impossible to find. There are various capacities, technologies and manufacturers to choose from, each requiring slightly different prices. Not to mention that Samsung and other OEMs have much better bargaining power to negotiate prices below what you find online.
We've been trying to find the appropriate parts prices from component vendors, including Mouser and DigiKey, but there's a significant markup. Samsung definitely does not pay on these sites.
To find out, we need to use a bit of intuition.
According to this material bill of materials (BOM), the Samsung Galaxy S9 Plus & # 39; s 6GB of RAM cost Samsung only $ 39, probably because it was sourced internally (Samsung is a leading manufacturer of RAM and flash memory). , In the meantime, Toshiba's 64 GB UFS flash memory costs just 12 US dollars.
We can project the Samsung Galaxy S9 with up to 512 GB and 1 TB of storage capacity. With lower flash memory prices and capacity expansion savings, prices for 512GB could be $ 96 and 1TB would be $ 192. Actual costs are likely to be lower if we consider the scale cost savings. Industry estimates suggest that flash memory could cost only $ 0.08 per GB in 2019, which could halve our conservative estimates here.
As far as RAM goes, we can make a similar assumption. The conversion from 6 to 8 GB should cost no more than 33 percent more. This suggests that an 8GB LPDDR4 chip for Samsung should cost around $ 52. Meanwhile, the 12 GB chip should cost about $ 78.
However, keep in mind that this is a very rough estimate based on extrapolative guide prices. This gives us a very conservative playground, but the actual prices that Samsung pays could be lower. And DRAM prices across the market are currently declining due to oversupply and sluggish demand.
So what's the price?
The use of these assessments brings us to the region of Samsung's BOM.
- The memory and memory in the Galaxy S10 Plus with a capacity of 6 GB / 128 GB should cost about 63 USD.
- The memory and memory of the 8 GB / 512 GB model should cost about $ 148. That's $ 85 more than the lower version.
- The memory and memory of the 12 GB / 1 TB model should cost about $ 270. That's $ 122 more than the lower version.
We calculate the estimated cost differences between the models at $ 85 and $ 122, respectively. Certainly not the price increases of $ 284 and $ 341, which according to Samsung will be charged for the Galaxy S10 Plus models with more storage space. We anticipate a markup of 179% to 234% in these areas, which could potentially be significantly higher if flash memory prices fall as sharply as expected.
|Variant Galaxy S10 Plus||Estimated Storage Costs||] Cost Increase vs. Lower Tier||markup versus lower tier||markup|
|6GB RAM / 128GB storage||$ 63  N / A||N / A||N / A|
|] 8 GB RAM / 512 GB memory||$ 148||$ 85||284||234%|
|12 GB RAM / 1TB memory||$ 270||$ 122||$ 341||179.5%|
Note that this rough calculations do not take into account the full picture. There are other development costs, such as configuring drivers and other software. Nevertheless, there is definitely a significant markup for smartphone makers who have the privilege of having more storage capacity.
We will be looking for a Galaxy S10 BOM after launching the handset on February 20th. That shows us exactly what our estimate was, and how much of the price premium is just profit in Samsung's pockets.
To be clear, we're not saying Samsung here. Higher markups for top-tier versions seem to be the norm, and not just in the mobile industry. From the consumer's point of view, it seems to be greedy. However, if you are in the position of a mobile CEO, you may be less inclined to think so.
The high premium that customers pay for the high-end versions of a phone can help to "subsidize" the base models, which have lower profit margins. In addition, memory and memory are one of the few ways to sell a phone manufacturer. In a highly competitive market, companies with their very expensive and powerful variants can improve their margins without sacrificing budget-conscious buyers.
Let us know your thoughts!