According to Nikkei Asia, which collaborated with the Tokyo-based teardown in this research, the total bill of materials used in the Galaxy Z Fold 4 comes in at about $670. The retail price of the phone starts at $1,800. The iPhone 14 Pro Max, meanwhile, costs $1,100 for the base variant but its material bill is close to $500. Based on this finding, the foldable has a significantly higher gross profit margin. Beleaguered Chinese firm Huawei, which has been making foldable smartphones for a few years now but is mostly limited to the domestic market due to US sanctions, has even higher margins than Samsung. The part cost to retail price ratio for its Mate Xs is roughly 30%. That’s a lot of money on every foldable sold for the company, which once threatened to overthrow the Korean behemoth as the world’s largest smartphone vendor. Xiaomi’s profit margin for the Mi Mix Fold is reportedly close to the Galaxy Z Fold 4’s. Long story short, these “non-conventional” smartphones make more money per unit for manufacturers than the regular smartphones that have existed for years now. The new report speculates that higher profitability may have spurred OEMs to enter the foldable market in bulk in recent years. OPPO and Vivo, which are among the world’s five largest smartphone companies, launched their first foldable product in 2022. The likes of Google and Apple may also jump in soon.
Samsung is benefitting from a strong domestic foldable supply chain
Samsung has a huge headstart over its rivals in the foldable market. The company’s early bet on these futuristic products has resulted in a strong foldable supply chain in South Korea. While the company makes the folding display, memory chips, and storage chips on its own, it sources a lot of other components from domestic firms. On a cost basis, about 50% of components used in the Galaxy Z Fold 4 are reportedly supplied by South Korean vendors. Moreover, Huawei’s Mate Xs also uses roughly 50% of its components from South Korean suppliers. South Korean parts further account for about 36% of components in Xiaomi’s Mi Mix Fold. This indicates the strength of the foldable supply chain in Samsung’s domestic market. The company would be looking to further leverage that to its benefit in the coming years. The company will launch its fifth-gen foldables in less than a year from now.
