We all know the markup on tech devices are quite large, and when looking into what it takes to manufacture a smartphone versus what it costs to buy you may reconsider picking up a brand new Galaxy S8. After tearing down the S8 and looking researching the cost to build one from scratch, you may not be happy to know there’s more than a 50% markup.
The standard S8 retails for around $750 which is pretty typical for a flagship, but considering it costs around $310 to build you’re probably wondering why. The Plus sized version has an even higher markup with a build cost that comes in around $320, and retails for $850.
The markup in smartphones is not only with Samsung as Google and Apple have considerable amounts as well. When looking at two of last year’s top-selling flagships, the Google Pixel and iPhone 7 which retailed for about the same with Google keeping more of the pie.
The Pixel is estimated to cost upwards of $290 to build while the iPhone 7 came in considerably less at just under $225. While the $65 difference in build cost between the Pixel and iPhone 7 may not sound like much, when considering Apple sold more than 80 million worldwide this equates to more than 325 million.
While there are other factors to consider in retail sales such as marketing, I think you get the point.