Do smartphones cost much to build?
Looking at the iPhone 6 and realising I could buy a Moto G and PS4 for the same price - with change left over!
Sep. 15, 2014 at 20:28
Depends on the phone and if the manufacturer is intending to make a viable business out of making smartphones. Typically some of the top smartphones cost between $200-$250 to make, I say make but that's the cost of the materials. Then you have to factor in umpteen other costs such as labour, transport and distribution, R&D, marketing, retail costs, etc. the list goes on. Then on top of that a company has to make a reasonable profit, but the problem is that some manufacturers sell at cost and don't make any money. Take the Nexus line from Google, sold at cost, the same with the OnePlus One which is also sold at cost (at least for the first two years).
Cheaper phones obviously cost very little to make and profit margins are very slim to practically non-existent, but they're usually aimed at higher volume sales in emerging markets a lot of the time. I think the statistics show that Apple and Samsung own 110% of the industry profits because everyone else is either breaking even or losing money.
In the case of something like a PS4 they're also sold at cost or even at a slight loss, getting you to buy the console at a reasonable price and then recouping the cost through high priced games.
JanSt / MOD
Sep. 15, 2014 at 21:06
Yes. TJ made most of the points...
And when you see articles that claim, so and so only costs $110 in parts... consider this:
15 years ago a company like Nokia would spend 10-20 million dollars just to test how a £40 dumb phone fares in a woman's handbag! Nokidding.
The tear down geeks never consider R&D, software and hardware development. Future updates and the many middlemen up to and including the networks.
Then there are test & prototypes - for every model launched and mass produced there are probably half a dozen earlier versions. Put on ice or killed.
If you're still upset: consider Tesco pay appr 6p for a chicken mass-produced in Thailand! How can organic farmers compete?
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