Samsung smartphone costs rise due to new camera

Samsung Electronics Co.’s latest flagship phone costs more to build than the previous model after the South Korean technology company upgraded the device’s camera, according to research firm TechInsights.

The new Galaxy S9+ smartphone cost $379 to build, up from $343 for last year’s Galaxy S8+, TechInsights estimated. The S9+ has a more advanced camera system that includes a second rear camera. Those components cost $48 versus $32 on the S8+.

As smartphone cameras have improved enough to be the go-to picture-taking devices for most people, photo quality has become a major battleground between Apple Inc., Samsung and other mobile technology companies.

“When you look at the camera sensors, Samsung took the higher-performing 12 megapixel sensor from the Note 8 in addition to the 12 megapixel sensor on the S8+, and combined those for the S9+ camera module,” TechInsight’s Al Cowsky said. “They’re incrementally improving things.”

The other key phone technology battleground is the display, although here costs declined. The most expensive component inside the S9+ is the 6.2-inch OLED screen, which comes in at $72.50. That’s cheaper than the similarly sized screens in the Note 8 and S8+, which cost $82 and $78.50, according to the analysis. This is followed by the main phone processor coming in at $68 and memory components at $51.

The analyzed phone uses a Samsung-designed processor, while Samsung models in the U.S. have historically used Qualcomm Inc. processors. The device TechInsights took apart includes Samsung’s Exynos 9810 chip, which has a new modem that’s potentially faster than last year’s models.

The average U.S. price of the S9+, through wireless carriers, is $903.30, suggesting Samsung has a 58 percent gross profit margin after the costs estimated by TechInsights. Samsung also sells the device on its website for $840, which would result in a 55 percent margin.

That compares to 61 percent estimated margins for Apple’s iPhone X, and 59 percent margins for the iPhone 8 Plus, according to TechInsight’s analysis. A teardown on the smaller S9 model wasn’t conducted.

Now read: Samsung unveils new Smart TV lineup

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Samsung smartphone costs rise due to new camera