Samsung Foldable Teardown Shows Why It Is The Company’s Latest Cash Cow
Samsung is leading the profitability game regarding its flagship foldable device – the Samsung Galaxy Z Fold 4. A new report by Nikkei reveals that Samsung is saving a ton of margin and can extract maximum profit from a niche smartphone like the Fold 4. The report reveals that the original cost of making a Samsung Galaxy Z Fold 4 is merely 40 percent of its current selling price. It may be why the South Korean company is heavily investing in the R&D of foldable phones, and there are already two unique models available now.
While most Android smartphone makers have jumped on the trend of making the next prosperous foldable, Apple seems to be marinating the idea of expanding the iPhone to the foldable segment.
What does the Nikkei report reveal about Samsung Foldables?
It is pretty clear that Samsung is making a ton of profit from each sold unit of its foldable phones. But that’s not all. The teardown also found something unique about the device and why Samsung is able to reap such huge profits. It is because of locally sourcing the components of the phone.
Locally sourcing the components helps Samsung save both shipping time and money. The Galaxy Z Fold 4 uses almost 50 percent locally sourced parts from makers like LG for the battery. Along with that, Samsung benefits from being a technology manufacturer itself, which ensures high-quality components and reduced reliance on neighboring countries.
It is exactly the opposite of what Apple is trying to achieve with its manufacturing model. Apple is trying to spread out its manufacturing pipeline to reduce reliance on one country. Still, its latest flagship iPhone isn’t able to reap the same amount of profit as the Galaxy Z Fold 4. As per Nikkei, the Apple iPhone 14 Pro Max has a higher cost ratio of 46 percent.
When foldables were first launched, their perception was of a flimsy device with a few tricks. But Samsung and other Android smartphone brands carved out a niche for these devices. The foldable phones industry is expected to grow by 73 percent in 2022, which is another good reason for Apple to work on a foldable.
