ADDING MULTIMEDIA Galaxy S8 Materials Costs Highest by Far Compared to Previous Versions, IHS Markit Teardown Reveals

21-Apr-2017 Intellasia | BusinessWire | 9:09 AM Print This Post

New Samsung smartphone is the first shipping in volume capable of
gigabit-LTE speeds; aims to restore consumer confidence following Note 7
challenges


LONDON–(BUSINESS WIRE)–The new Samsung Galaxy S8 equipped with 64 gigabytes (GB) of NAND flash
memory carries a bill of materials (BOM) cost that comes out to
US$301.60, much higher than for previous versions of the company’s
smartphones, according to a preliminary estimate from IHS Markit
(Nasdaq: INFO), a world leader in critical information, analytics and
solutions.

After $5.90 in basic manufacturing costs are added, Samsung’s total cost
to make the Galaxy S8 rises to $307.50; the unsubsidized price for a
64GB Galaxy S8 starts at around $720. The preliminary estimated total at
this point is $43.34 higher than that of the Galaxy S7 previously
performed by IHS Markit, and is $36.29 higher than the total build cost
of the Galaxy S7 Edge, considered a better comparison to the Galaxy S8.
IHS Markit has not yet performed a teardown analysis on the larger
Galaxy S8 Plus.

“The higher total BOM costs for the Galaxy S8 seem to be part of a trend
that reflects 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
.
“While there are new non-hardware features in the Galaxy S8, such as a
virtual assistant called Bixby, from a teardown perspective the hardware
in the Galaxy S8 and that of the forthcoming new iPhone is expected to
be very similar.”

The introduction of the Galaxy S8 comes at a delicate time for the
embattled South Korean electronics giant, which is eager to put behind
the challenges associated with the Galaxy Note 7, whose exploding
batteries prompted a worldwide recall.

The latest salvo from Samsung shows how it’s keen to regain consumer
confidence and attain leadership in the smartphone landscape, a nearly
saturated but still highly competitive space that remains key to
retaining subscriber loyalties and winning new converts.

First smartphone capable of gigabit-LTE speeds

Both the Galaxy S8 and S8 Plus feature a 10-nanometer (nm)
system-on-chip (SoC) along with CAT-16 LTE modem and radio. The CDMA
version of the S8, intended for use in the United States as well as in
China, will feature the Snapdragon 835 chipset from San Diego-based
Qualcomm. In comparison, a version of the phone featuring Samsung’s
homegrown Exynos 8895 chipset will be used for the rest of the world.

The CAT-16 LTE radio allows the new Galaxy phone to aggregate three
carriers of up to 20 megahertz each. Combined with 4×4 MIMO antennas and
higher-order modulation of 256 QAM, the LTE modem is capable of reaching
peak theoretical speeds of one gigabit per second. “Gigabit LTE is very
much the marquee specification for 2017 flagship smartphones,” said Wayne
Lam, principal analyst of smartphone electronics, 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.”

New “Infinity Display” design fits better in hand

The redesigned Galaxy S8 has a tall, narrow shape that is 1.5
millimeters narrower than the previous Galaxy S7, providing slick new
ergonomics while also optimizing screen real estate. The screen curves
around the edges, and Samsung designers have maximized the display,
relative to the size of the phone, with a 5.8-inch 2960×1440 AMOLED
display and an elongated aspect ratio of 18.5:9. Compared to
conventional 16:9 aspect-ratio Quad HD smartphone displays, the Galaxy
S8 features an additional 15 percent more pixels in a form factor that
is easier to hold in the hand. The device’s haptic engine, which
provides the “click” feel for users, also has been improved for
longer-duty cycles and a more dynamic response.

Double the base-model storage

Both the Galaxy S8 and S8 Plus feature 4GB of RAM and built-in storage
of 64GB—twice the standard built-in storage found in the Galaxy S7 as
well as the iPhone 7. Storage for the new Samsung phones can also be
expanded, up to 256GB, via a microSD card. The Samsung NAND flash memory
and DRAM on the S8 come in at a cost of $41.50. Rassweiler said: “While
in previous years the cost per gigabyte has generally fallen in both the
NAND flash and DRAM areas, we have seen rising prices in both DRAM and
NAND flash recently due to some tightness in the marketplace. The cost
of memory in the S8 reflects these recent market dynamics, even though
we expect the erosion in memory pricing—something that occurs regularly
in the memory market—to resume during the course of the year.”

Battery

The battery capacity on the Galaxy S8, at 3000 milliamp hour (mAh), is
the same as that found in last year’s Galaxy S7. However, compared to
the Galaxy S7 Edge, which had a 3600mAh battery, Samsung played it safe
after the Note 7 incident and included a considerably less dense battery
pack. Overall cost estimate for the Galaxy S8 battery pack is $4.50.

Single camera lens

Although the Galaxy S8 and S8 Plus come with new features and the latest
components, each still has only a single camera in the back—essentially
the same as the camera module found in last year’s Galaxy S7. Apple’s
iPhone 7 Plus, the newly launched LG G6 and many Chinese OEMs are now
promoting dual cameras as a key feature. 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.

For more early observations, visit the IHS
Markit Technology blog section
, or jump directly to this IHS Markit
blog post: Samsung
touts powerful new features with Galaxy S8
.

About IHS Markit (www.ihsmarkit.com)

IHS Markit (Nasdaq: INFO) is a world leader in critical information,
analytics and expertise for the major industries and markets that drive
economies worldwide. The company delivers next-generation information,
analytics and solutions to customers in business, finance and
government, improving their operational efficiency and providing deep
insights that lead to well-informed, confident decisions. IHS Markit has
more than 50,000 key business and government customers, including 85
percent of the Fortune Global 500 and the world’s leading financial
institutions. Headquartered in London, IHS Markit is committed to
sustainable, profitable growth.

IHS Markit is a registered trademark of IHS Markit Ltd. All other
company and product names may be trademarks of their respective owners ©
2017 IHS Markit Ltd. All rights reserved.

Contacts

IHS Markit
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annette.hamilton@ihsmarkit.com
or
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Team, +1-303-305-8021
press@ihs.com
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