SEOUL, April 21 (Korea Bizwire) – Samsung Electronics Co. is estimated to make less than 100,000 won (US$88.20) for each Galaxy S8 smartphones sold, industry watchers said Friday, hovering far below the market price of 935,000 won.
The calculation is based on the fact that Samsung’s mobile business saw its operating margin reach 10.8 percent last year, and that the tech giant needs to also take expenditures on marketing and other costs into account.
Industry tracker IHS Markit also estimated that the 64GB Galaxy S8 smartphone’s production cost, including parts, is estimated at $307.50.
“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,” an industry insider said.
Industry watchers estimate that given the likelihood of Samsung selling some 50 million units of Galaxy S8 smartphones, the company would raise a net profit of around 3.5-5 trillion won. The tech giant kicked off sales of the new flagship in South Korea and the United States on Friday.
Preorders for the Galaxy S8 and the Galaxy S8 Plus, which ran from April 7-17 here, surpassed the 1 million unit mark, setting a new record among all of the company’s smartphones so far.