Pricing speculations on cheaper Samsung Galaxy R, Tegra2 4.2″ Super Clear LCD Smartphone

Posted by Charbax – August 14, 2011

Arguably, the Samsung Galaxy S2 is the best phone in the world today. Samsung now also brings what looks to become a lower cost similar smartphone experience using the Tegra2 Dual-core 1Ghz processor instead of the 1.2Ghz Dual-core Exynos and using an LCD touch screen instead of the more expensive and harder to manufacture Super AMOLED Plus screen.

I played with the Samsung Galaxy S2 for a few days as I was able to borrow it during Computex, it's a very impressive phone, the screen is amazing and the processor for now seems unbeaten in terms of performance (until 1.5Ghz Dual-core OMAP4460 devices start coming out next month).

In Europe, I cannot find the Samsung Galaxy S2 sold below 458€ and in the US it seems to cost $629. Clearly, that's very expensive. But I guess, many people still consider that the normal going rate for high-end smart phones?

What is really the true manufacturing cost for Samsung on the Samsung Galaxy S2? My guess is they spend less than $200 to manufacture each phone (which is probably a bit higher than Apple and other LCD based Android smart phone makers pay per phone). Which means they are making upwards 200% profit margin on each phone. Sure enough, Samsung spends extra on making the Super AMOLED Plus screen, which they also are in the process of using their new multi-billion dollar Super AMOLED Plus factory to try to ramp up mass manufacturing to keep up with demand. But I guess that's just how things are for getting a Samsung for now. I'd find it cool if they decided to sell the Samsung Galaxy S2 for $250 unlocked or 250€, it may allow them to not loose money and gain huge market share as they increase their mass manufacturing even much further, but that may be too disruptive for the whole smart phone carrier business model yet.

Anyways, Samsung may save with Galaxy R compared to S2 (according to my pure guess) about $20 on the LCD, and perhaps about $10 on the processor and other electronics that come with the Tegra2 package. A $30 savings in Bill of Material, may translate to upwards $100 cheaper retail price. So I expect Samsung will sell the Samsung Galaxy R below 399€ and below $499 as unlocked. I do not consider the carrier subsidized pricings as I consider those more expensive, they can sometimes add up to $2500 over the 2-year contracts, which I do not consider a pricing advantage over buying the phones unlocked and then using cheaper data and voice SIM cards in there.

What do I recommend geeks who want the best regardless of the price? If you can't wait, get a Samsung Galaxy S2, don't look too much at the price tag, consider all competing big brand Android phones cost about the same. If you can wait, maybe in 1 or 2 months, the rumored Samsung Nexus Prime might be coming with Ice Cream Sandwich. I do not know if the rumors of a 720p Super AMOLED Plus 4.3" screen are realistic, or if Samsung will use the 1.5Ghz Dual-core OMAP4460 or perhaps overclock their own Dual-core Exynos platform to 1.5Ghz. I would not be surprised if the rumored Nexus Prime is more or less the same as a Samsung Galaxy S2, with very minor design changes and it just running vanilla Ice Cream Sandwich, just like the Nexus S is a copy of the Samsung Galaxy S1 and the Nexus One is a copy of the HTC Desire. The OMAP4460 Ice Cream Sandwiches might be used by LG, Motorola and other companies which may have more history in working with Texas Instruments, but who knows, maybe Texas Instruments is doing huge efforts to provide attractive package deals to all the device makers and that they all feel they cannot afford to miss the non-exclusive TI OMAP4460 based opportunity.

TheInquirer recently quoted analysts saying that Samsung has now overtaken Apple and has become the worlds biggest smart phone maker.

Samsung might have sold more smartphones than Apple and Nokia during April, May and June

With phones like the Samsung Nexus Prime, Galaxy R, cheaper Galaxy phones (2, 3) targetted at pre-paid and developing countries (including focus on BRIC, Brazil, Russia, India, China), the new Super AMOLED Plus factory being ready for increased mass production, Samsung's rise in smart phone market share is likely to only increase. Consider that with just Samsung's Android smart phones, there are more sales than the iPhone, consider how much more Android smart phones sell overall compared to iPhone when all the other many growing Android smart phone makers are put together. I think it is not ridiculous to expect a 1/4 ratio in daily sales to be demonstrated pretty soon, likely before Christmas, regardless of how many current iPhone owners decide to upgrade to the iPhone5.