Samsung’s new Galaxy S8, the first device shipping in volume capable of gigabit-LTE speeds, cost a lot more to make than the vendor’s previous smartphones, according to IHS Markit.
The high costs reflect “something of an arms race in features among Apple, Samsung and other phone manufacturers, as they all try to add new and distinguishing hardware features,” said Andrew Rassweiler, senior director of cost benchmarking services for IHS Markit.
He added the hardware in the Galaxy S8 and the upcoming iPhone is “expected to be very similar.”
It is no surprise Samsung went all out in the making of the device, as there is a lot riding on it following the Galaxy Note 7 battery debacle, and the company will be looking to restore customer faith in the brand in hopes of increasing sales.
Samsung’s Galaxy S8 will be up against the LG G6, Huawei’s P10 and also Apple’s next iPhone, the much anticipated 10th anniversary edition, which will launch later this year.
IHS Markit estimated the total cost of manufacturing the Galaxy S8 at around $307.50. The unit will retail at around $725.
The total cost of manufacture is $43.34 higher than the S7 and $36.29 higher than the total build cost of the S7 Edge, which IHS Markit said is “considered a better comparison to the Galaxy S8”.
Both the Galaxy S8 and S8 Plus feature a 10-nanometer processor along with CAT-16 LTE modem and radio. The radio allows the smartphone to aggregate three carriers of up to 20MHz each while the LTE modem is capable of reaching peak theoretical speeds of one gigabit per second, the study observed.
“Gigabit LTE is very much the marquee specification for 2017 flagship smartphones,” said Wayne Lam, principal analyst of smartphone electronics at IHS Markit. “Keep in mind that gigabit speeds are a best-case scenario and that a user’s real-world experience will be limited to what mobile networks can provide.”
The S8 also feature 4GB of RAM and built-in storage of 64GB, twice the level of built-in storage found in the S7 and iPhone 7.
Battery capacity on the Galaxy S8, at 3000mAh, is the same as the S7. However, compared to the S7 Edge, which had a 3600mAh battery, Samsung “played it safe after the Note 7 incident and included a considerably less dense battery pack”, IHS Markit said.
While the iPhone 7 Plus and the LG G6 now come with dual cameras, Samsung stuck to a single camera, which is “essentially the same” as the S7.
“Owing to the asymmetric placement of the rear fingerprint sensor, it would have been likely that a dual-camera design was scrapped at the last minute in the design cycle,” IHS said.
Last week, Samsung said demand for the S8 beat expectations, with orders exceeding those of the S7.
Watch our feature video from the launch of the Galaxy S8 here.