Debunked: “Galaxy S6 Edge more costly to make, cheaper to buy than iPhone”

Chris Burns - Apr 14, 2015, 2:30 pm CDT
19
Debunked: “Galaxy S6 Edge more costly to make, cheaper to buy than iPhone”

The differences are slight – or they might seem slight to the untrained eye – but the Galaxy S6 Edge’s cost to Samsung is higher than the average phone. In fact, according to a study being published by IHS today, the Samsung Galaxy S6 Edge’s estimated cost to build is higher than an equivalent* iPhone 6 or 6 Plus, but costs less for a consumer to buy outright on the market today. *Equivalent, that is to say, if you consider what they present to be the same.

According to today’s IHS report as presented by Re/code, the iPhone 6 costs less to manufacture than the Galaxy S6 Edge, yet more to the consumer in the end. This is false.

According to the report, the Samsung Galaxy S6 Edge (Verizon version) with 64GB internal storage) will cost Samsung approximately $290.45 to build. IHS does a breakdown of known components in the device and estimates costs.

S6 Edge: $290.45 to build
iPhone 6: $247 to build
6 Plus: $263 to build
(all 64GB editions)* [See below for corrected numbers]

All costs are estimated based on known components, all by IHS.

These are all off-contract prices:
S6 Edge:
$699.99 to buy
iPhone 6: $749.99 to buy
6 Plus: $849.99 to buy
(all for 64GB editions)† [See below for corrected numbers]

Earlier today Re/code and an IHS representative suggested that the Galaxy S6 Edge “costs less than an iPhone to buy, but costs Samsung more to build.”

Several slight corrections change this whole setup around in the other direction. Not that it makes a massive amount of difference to the end consumer – who rarely looks at costs to manufacture – but still.

According to the Re/code report, “IHS estimated the top end of the materials cost” on the iPhone 6 and 6 Plus “at $247 and $263.”

* Fix 1

The problem here is that the “top end” they mention is the 128GB model of the iPhone 6 and iPhone 6 Plus, not the 64GB model. The 16GB version of the device is estimated in that same IHS report as hitting $200.10 and $215.60 for Apple to make.

At the time of the report, IHS analyst Andrew Rassweiler suggested that Apple was paying around 42-cents per gigabyte on flash memory. If you add 42-cents-per-GB of memory to these devices to ramp them up to a 64GB machines, you get $20.16 in added material cost.

Add that to the 16GB edition cost and you’ll have the following:

S6 Edge: $290.45 to build
iPhone 6: $220.16 to build
6 Plus: $235.76 to build
(all 64GB editions)

† Fix 2

The pricing scale adds up when you look above – yes, indeed, the Galaxy S6 Edge appears to be cheaper than the iPhone 6 and iPhone 6 Plus. But there’s a problem.

side

The pricing doesn’t reflect the 64GB version of every phone. If have a peek at the 64GB version – as we’re supposed to be looking at for all devices in this report, you see the following:

S6 Edge: $799.99 to buy
iPhone 6: $749.99 to buy
6 Plus: $849.99 to buy
(all for 64GB editions)

At this point, the Galaxy S6 Edge costs more to build than either the iPhone 6 or iPhone 6 Plus and can be purchased for less than its equivalent iPhone 6 Plus. Meanwhile the iPhone 6 costs less to make and will cost the consumer less to buy on the market off-contract.


Must Read Bits & Bytes