We may earn a commission if you make a purchase from the links on this page.
Up Next:
Samsung had a lot of hard choices to make after releasing the 5G-enabled Galaxy S20 Ultra at an outlandish retail price of $1,400, especially given that the spring 2020 flagship lineup didn't prove as popular as expected both due to the coronavirus pandemic and its own shortcomings.
Ultimately, the world's number one smartphone vendor decided to ditch the gimmicky 100x "Space Zoom" feature and largely useless 3D Time-of-Flight sensor while also downgrading the gargantuan 5,000mAh battery to 4,500mAh capacity for the otherwise impressive 6.9-inch Galaxy Note 20 Ultra 5G.
That allowed the company to shave 100 bucks off the MSRP of its latest S Pen-wielding hero compared to its non-stylus-supporting predecessor, but if you were wondering exactly what that means for Samsung's profit margins, we may have the answer you're looking for today.
That 5G is sure expensive
According to a Counterpoint Research analysis of the Note 20 Ultra's components, this bad boy carries a total BoM cost of $548.90. For those unfamiliar with the smartphone teardown lingo, BoM stands for Bill of Materials, including the estimated price of everything from a handset's screen, cameras, processor, and memory to build materials, assembly and testing, various accessories bundled in the box as standard, and even the retail packaging itself.
In other words, Samsung is purportedly spending almost 550 bucks to put together each and every Galaxy Note 20 Ultra 5G unit, which just so happens to be slightly higher than the S20 Ultra 5G BoM of $528.50. At first glance, that means Samsung might have settled for a lower profit per device this time around in a mission to boost its declining shipment figures, but after looking closely at the two charts, you'll realize that's not exactly the case.
Consequently, "cellular connectivity" is the most expensive category in the Note 20 Ultra 5G mmWave BoM analysis, with Qualcomm's X55 5G modem, mmWave antenna module, transceiver, and other related components setting Samsung back a cool $97.20.
If that doesn't feel like a lot of money, you should know the same section of the Sub-6 S20 Ultra 5G's Bill of Materials was estimated at a measly $9.50. That explains why Verizon-compatible 5G phones tend to be around $100 pricier than their non-mmWave-equipped counterparts while also suggesting Samsung has largely retained its profit margins for the Note 20 Ultra.
Costlier display, cheaper camera, stable margins
We're pretty sure that means the $1,400 Galaxy S20 Ultra 5G was overall pricier to manufacture than the $1,300 Note 20 Ultra 5G, but before condemning Samsung's greed, you might want to keep in mind there are some big costs not included in BoM charts. Namely, R&D and marketing, which... still leave plenty of room for hefty company gains, as proven by its official financial reports.
If you compare the other different sections of the two BoMs, you'll find that Samsung is spending more on the display but a lot less on the cameras of the Galaxy Note 20 Ultra 5G.
The processor and memory expenses are lower this time around, despite the new guy adopting a newer Snapdragon 865 Plus SoC and retaining the 12 gigs of RAM and 128 gigs of storage. The built-in S Pen is a fairly important added cost, at $25, while the smaller battery is curiously enough slightly pricier to make.
In case you're wondering, the BoMs of both the S20 Ultra 5G and Note 20 Ultra 5G in their 128GB configurations are higher than the $490.50 estimated production cost of a 4G LTE-only iPhone 11 Pro Max with 512 gigs of local digital hoarding room that normally goes for $1449. So, yeah, Apple's profit margins are still unbeatable.
Adrian, a mobile technology enthusiast since the Nokia 3310 era, has been a dynamic presence in the tech journalism field, contributing to Android Authority, Digital Trends, and Pocketnow before joining PhoneArena in 2018. His expertise spans across various platforms, with a particular fondness for the diversity of the Android ecosystem. Despite the challenges of balancing full-time parenthood with his work, Adrian's passion for tech trends, running, and movies keeps him energized. His commitment to mid-range smartphones has led to an eclectic collection of devices, saved from personal bankruptcy by his preference for 'adequate' over 'overpriced'.
Recommended Stories
Loading Comments...
COMMENT
All comments need to comply with our
Community Guidelines
Phonearena comments rules
A discussion is a place, where people can voice their opinion, no matter if it
is positive, neutral or negative. However, when posting, one must stay true to the topic, and not just share some
random thoughts, which are not directly related to the matter.
Things that are NOT allowed:
Off-topic talk - you must stick to the subject of discussion
Offensive, hate speech - if you want to say something, say it politely
Spam/Advertisements - these posts are deleted
Multiple accounts - one person can have only one account
Impersonations and offensive nicknames - these accounts get banned
Moderation is done by humans. We try to be as objective as possible and moderate with zero bias. If you think a
post should be moderated - please, report it.
Have a question about the rules or why you have been moderated/limited/banned? Please,
contact us.
FCC OKs Cingular\'s purchase of AT&T Wireless
Things that are NOT allowed: