Welcome to another informative episode (Why are cell phones so expensive) on our techloveres.com. Today’s episode is about a special topic, we are all curious about this topic, but we don’t get much information about this topic. Because these are secret information. The company hides this information, the company does not want this information we know. This means that the company will be in danger if we know how much it costs to make a smartphone. Then before we buy each smartphone, we will think about how much profit the company is actually making by selling this smartphone. So this secret information does not come to the fore. Yes, today we will give a full idea about this. Let’s get started.
Why are cell phones so expensive?
When we use a small smartphone with our hands, we can’t even imagine that there are at least 300 small devices in that smartphone. And those different equipments are supplied from different countries of the world. Maybe the parts are collected from 200/250 countries of the world and then assembled and made into a smartphone. So the price of each part is constantly changing. So it is never possible to say exactly what the exact price of a component is. However, an idea can be found. We already know that it costs 410-480 USD to make an iPhone 12 Pro. It is sold for about 1000 USD. That means selling an iPhone 12 Pro at almost three times the price. They make a lot more profit. Apple makes the most profit by selling a smartphone in the world. Other companies also make quite a profit. Some companies make 50% or 40% or 30% profit. Each one earns a different kind of profit. Even Xiaomi claims they make only 5% profit. There is no exact proof of that. It may be less profitable to provide a lower priced product to the buyer. Xiaomi’s profit difference with Apple is so much! It is difficult to accept. Especially if we calculate that the price of smartphone equipment is not very high.
Smartphone display price
The most expensive component of a smartphone is the display. Samsung produces the most displays. The highest cost is when using an amoled display. Also the price of the display depends on various reasons. Curve display, 120hz is more expensive. Due to such various features, the price of the display is higher. The price of an amoled display is around 82-165 USD. 82USD is the cheapest amoled display available which is not made by Samsung. These are made by Chinese manufacturer. These low priced amoled displays we could see in realme phones. The brightness of these displays is low. And the display whose price is 165 USD is used in that display flagship phone. It has high resolution and 120hz refresh rate. This type of display uses Apple. The price of Apple’s display is very high because you have to spend a lot of time for color calibration of this display or use new technology. So it costs more. Now come to the case of Tft or LCD display. The price of LCD display is comparatively much lower. The price of an LCD display averages 14 USD. And a very good 120HZ LCD display can be USD 28. Due to the difference in price between LCD display and AMOLED display, smartphone companies prefer to give cheap IPS LCD display. It is impossible to use Amoled display on cheap phones.
Smartphone Cpu price
The second most expensive thing in a smartphone is the processor or SOC. When a processor is made, Especially when we look at the Qualcomm Snapdragon 888 processor it has a lot of features. There is a 5g modem integrated in it. This means that you have to buy the 5G modem with the processor. All in all, the Qualcomm Snapdragon 888 is priced at around $100.When the Qualcomm Snapdragon 865 came out, the price of that processor was around 60 usd. We used to know it as a more expensive processor. Why would we say expensive? If we compare it with MediaTek’s processor, we can see that MediaTek’s processor is much cheaper. MediaTek’s most expensive 5g processor which is mediatek dimensity 1200, this processor is priced at 42-48 usd. Think about how cheap it is. The processors used in mid-budget phones can be cost usd 30-36 for MediaTek. The processor used in low budget phones costs less than usd 28.In the case of Samsung’s Exynos 9611, the price is only 14 usd. Samsung would make it itself and give it at the cheapest price. And made the most phones using that processor. Because Samsung is the biggest gainer after Apple.
Smartphone camera price
The 3rd most expensive device is the camera. But in case of camera, the lens of the camera has to be bought separately, the lighter sensor of the camera has to be bought separately, the laser auto focus has to be bought separately. We will mainly discuss normal sensors. When we saw the 108 megapixel camera came. Which was being fitted with Samsung’s flagship phone. But the price was much higher. It cost 55 USD.Then when it became cheaper, Xiaomi brought them to their phones, brought realme, then you will assume that the price has come down a lot because the technology has become old.At that time its price was close to 28 USD. We use normaly Sony’s 46 megapixels, Samsung’s 64 megapixels, they are usually priced around 15 usd. The price of a sensor can be 15-20 USD. But the 2 megapixel camera sensor, which is only used to sort the phone’s camera module, costs between 1-3 USD. If we consider the iphone as the standard. Then the price of the camera used in iphone 12 is 50 Usd. When a smartphone company offers OIS or autofocus or any other feature, then a different price is charged for it. Then the price of the camera module is up even more. This is how the price difference of the camera module becomes.
Price of RAM ROM and other hardware
What is the price of RAM and ROM i.e. storage? A combination of 64GB and 3GB RAM, it costs about 30 USD. But the protection of a gorilla glass is more expensive than that. In the case of gorilla glass, if the gorilla glass is 3, or the old-fashioned gorilla glass is only 5 usd to protect it,It’s not too much. But if the glass is the latest, if it is more than 5th gorilla glass then its price is like 20 USD. So smartphone companies no longer offer the latest version of Gorilla Glass. They are now gradually moving back to Gorilla Glass 3. You must have been curious for a long time about the price of a battery, an important part of a smartphone. The price of a battery is not very high. A 5000mAh battery costs about 5 USD. Although the battery is a big thing, its price is quite cheap. But smartphones do not have just these few things. There is a Bluetooth module for Bluetooth, there is a WiFi receiver for WiFi. Also a lot of more components like this together make a smartphone. For example, there is a microphone, there is a speaker, there is a fingerprint reader. All this is to be spent for every little thing. Transportation costs are added to bring all these parts together. Then you have to spend money to put these parts together to form a phone. According to a report, the lowest cost to make a smartphone is for labor. The labor cost to make each phone in China is only 2.5 USD
Software maintenance cost
Making phones doesn’t just cost hardware. The company has to spend a lot for the software. Google has to pay a fee for the software you see on your phone, Android, Google, YouTube, Gmail. Google charges 1 USD for each phone. In that case, the more phones sold, the higher Google’s profit.Suppose a phone supports Dolby atmos. The Dolby company take 3.15 USD charge for each phone who uses the Dolby Atmos feature, their name, their logo. That means we can’t even imagine how much to spend on small things. Even after making the phone, it has to pay tax, godown cost, marketing cost, store supply cost, distributor cost, packaging cost. Ultimately, the company makes a lot of money after selling a smartphone even after spending so much. Usually a smartphone is never sold at a loss unless an absolutely abnormal situation is created. It is sold at at least 3x more price . When a smartphone gets too old, it stays in stock. when company need to out the stock, the smartphone companies sell them at 60% discount, 50% discount. Even then they gain a lot. This is the smartphone business.
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