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Samsung Galaxy Note 10.1 Has Bigger Profit Margin Than iPad

By - Source: IHS | B 26 comments

More than two years after the introduction of the iPad, Samsung appears to be very confident in the tablet market and is shooting for margins that exceed Apple's iPad levels.

According to IHS, the HSPA+-equipped Galaxy Note 10.1 has a bill of materials (BOM) of $283, excluding assembly cost. The device sells for about $640 to consumers.

The Wi-Fi only $499 Galaxy Note 10.1 has a BOM of $260. In comparison the 16 GB, Wi-Fi only iPad as an estimated BOM of $316. At least in theory, Samsung can make more money per device than Apple does.

“With the Galaxy Note 10.1, Samsung continues to seek the magic formula for a media tablet that can rival the iPad’s market penetration,” said IHS' Andrew Rassweiler. “And where some other tablets introduced in recent times generated small or no hardware profit, the Galaxy Note 10.1 could turn a decent per unit margin for Samsung, and stands to be a money maker, if the company can extend the recent success of the Samsung Galaxy Note smartphone to its tablet line.”

Rassweiler noted that the Google Nexus 7 and the Amazon Kindle Fire generated "little or no hardware profit". Obviously, the actual profit will lie in demand - and Samsung still has to show that it can sell the tablet in substantial numbers, which will help sustain the current retail pricing. At this time, there hard no substantial discounts available for the Galaxy Note 10.1.

 “Samsung is a behemoth in the electronic industry and its competitive strength lies in its control, via internal sourcing, of a large percentage of the components that go into its final products,” Rassweiler said. “This allows Samsung to keep costs down, while delivering competitive differentiation. The company’s internal sourcing strategy is certainly in evidence in the Galaxy Note 10.1, where Samsung supplies the memory, both flash and DRAM, as well as the core processor, battery and many other components.”

IHS said that, compared to its predecessor, the Galaxy Note 10.1 only has an incremental set of improvements.


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Top Comments
  • 34 Hide
    nieur , August 28, 2012 2:37 AM
    will apple sue them for infringing profit margin?
  • 22 Hide
    subaru41 , August 28, 2012 3:00 AM
    nieurwill apple sue them for infringing profit margin?

    LOL!

    No, but Apple will come out with a product or software called iNote and sue Samsung for copying name and trade dress of using white, because apple invented the color white on the first iPad.
  • 21 Hide
    dauntekong , August 28, 2012 2:59 AM
    Cheaper, better, and lighter. Samsung takes the lead even after losing the lawsuit
Other Comments
    Display all 26 comments.
  • 34 Hide
    nieur , August 28, 2012 2:37 AM
    will apple sue them for infringing profit margin?
  • 21 Hide
    dauntekong , August 28, 2012 2:59 AM
    Cheaper, better, and lighter. Samsung takes the lead even after losing the lawsuit
  • 22 Hide
    subaru41 , August 28, 2012 3:00 AM
    nieurwill apple sue them for infringing profit margin?

    LOL!

    No, but Apple will come out with a product or software called iNote and sue Samsung for copying name and trade dress of using white, because apple invented the color white on the first iPad.
  • 12 Hide
    tomfreak , August 28, 2012 3:14 AM
    Apple Ipad is priced more aggressively compared to their crappy overprice Mac/iphone. There is no reason for a smaller screen Iphone 4s using the crappier A5 non-X CPU with a smaller battery pack to cost more than Ipad3. Those who buy Iphone 4S is getting rip off for good.
  • 10 Hide
    dauntekong , August 28, 2012 3:21 AM
    TomfreakApple Ipad is priced more aggressively compared to their crappy overprice Mac/iphone. There is no reason for a smaller screen Iphone 4s using the crappier A5 non-X CPU with a smaller battery pack to cost more than Ipad3. Those who buy Iphone 4S is getting rip off for good.


    "Ba dee Ba dee Ba dee, That's Apple for you folks!" Said Porkie pig.
  • 12 Hide
    ikyung , August 28, 2012 3:24 AM
    It only makes sense Samsung will have a bigger profit margin. They pretty much make every single component that goes inside.

    I noticed Samsung's current trend is, keep pricing the same as competitors while being about 2 quarters ahead in technology. Now, if Samsung can invest big money into a software developing sector, they can maybe turn their current OS into a big competitor against Android, iOS, and W8.. but, I've only seen Samsung's OS on Korean phones and some European Samsung phones. And it's pretty crappy from what I heard.

    If Samsung can make their OS lightweight as iOS and open as Android, I would definitely see it dominating the market.
  • -8 Hide
    schnitter , August 28, 2012 3:39 AM
    dauntekongCheaper, better, and lighter. Samsung takes the lead even after losing the lawsuitSo Apple spend more


    Getting a bigger profit off the consumers is hardly a win now is it?

    Wasn't all the hating on Apple about them being overpriced and yet Samsung openly announce they are taking more money per customer than apple? And yet you praise them for this?

    Oh the irony.
  • -5 Hide
    mike_man , August 28, 2012 3:43 AM
    Personally I love Samsung, but bragging about profit margin is not the way to go! Besides clearly the 10" Note is going to sell a lot less than the iPad so that isn't going to count for much.
  • 14 Hide
    Kami3k , August 28, 2012 4:01 AM
    Well Samsung does make a lot of the parts themselves, so this actually makes sense.
  • 12 Hide
    techcurious , August 28, 2012 4:58 AM
    mike_manPersonally I love Samsung, but bragging about profit margin is not the way to go! Besides clearly the 10" Note is going to sell a lot less than the iPad so that isn't going to count for much.

    Well, no one said Samsung was bragging about profit margins.. those numbers you see in this article are not released by Samsung.
    To the consumer, sale price matters.. not cost price. To succeed in putting Apple in it's place, either Samsung needs to deliver a product as good as an iPad for a lower price, or a better product at the same price. I wish Samsung all the best. Apple needs to be taught a lesson! Although I do not wish for Apple and it's products to disappear, I look forward to the day when Apple sales decline to the point where it finds itself in 3rd or 4th place!
  • 7 Hide
    dauntekong , August 28, 2012 5:28 AM
    schnitterGetting a bigger profit off the consumers is hardly a win now is it?Wasn't all the hating on Apple about them being overpriced and yet Samsung openly announce they are taking more money per customer than apple? And yet you praise them for this?Oh the irony.


    News Flash... you cant expect Samsung to sell it for $0. Samsung product is cheap and they sell like hot cakes, Yes they make more money then Apple. but doesn't mean they greedy for moeny. The statement is saying that Samsung does not charge customer high price and still be able to beat Apple's high price. In other words, Samsung is not greedy for moeny they are generating revenue by making customer happy with the prices.

    Something Apple needs to learn from.
  • 11 Hide
    freggo , August 28, 2012 5:30 AM
    I've been saying this over and over; and get down voted by Apple fans...

    Apple will not be viable in the long run because they do not manufacture. That means their parts cost more due to the added profit marging oftheir supplier; no matter if it is Samsung or someone else.
    If you have your own manufacturing your turn around times on new products are shorter; debugging is quicker and your parts cost is naturally lower.
    Apple trying to pi$$ off their major supplier will not have a good ending in the long run.
  • -5 Hide
    DSpider , August 28, 2012 8:11 AM
    $640?? Who are they kidding? For $640 you can buy:

    - a Kindle Fire ($200)
    - a Nexus 7 ($200)
    - a Kindle Touch ($140)
    - a Nook Touch ($100)

    You'd be set for a few years for all your tablet needs.

    Edit: This isn't spam, you morons! These prices are from their official websites. Why are you downvoting it?
  • 1 Hide
    kartu , August 28, 2012 11:14 AM
    killabankswow samsung is pulling alot of apple moves lately...

    Was it sarcasm? I hope it was sarcasm...
  • 0 Hide
    kartu , August 28, 2012 11:18 AM
    schnitterGetting a bigger profit off the consumers is hardly a win now is it?Wasn't all the hating on Apple about them being overpriced and yet Samsung openly announce they are taking more money per customer than apple? And yet you praise them for this?Oh the irony.

    Apple isn't making that much on tablets. (unlike most of the other stuff) Margins are pretty low there. That's why their profits were below expectations last quarter.
  • 0 Hide
    dark_knight33 , August 28, 2012 2:44 PM
    DSpider$640?? Who are they kidding? For $640 you can buy:- a Kindle Fire ($200)- a Nexus 7 ($200)- a Kindle Touch ($140)- a Nook Touch ($100)You'd be set for a few years for all your tablet needs.Edit: This isn't spam, you morons! These prices are from their official websites. Why are you downvoting it?


    Maybe because a selection of 7" bargain tablets and ereaders isn't the same thing as a 10" galaxy note?

    I could buy like 10 new Cameros for the price of one new Ferrari. I even like the Camero more personally, but 10 of them aren't the same thing as a Ferrari.
  • 0 Hide
    house70 , August 28, 2012 5:04 PM
    Price will come down in a few months.The next version will come out with a better digitizer and will sell like hot cakes (again).
  • 0 Hide
    mralex , August 28, 2012 5:30 PM
    Why is this surprising?
    iPad has 2048x1536 resolution screen instead of the yesterday 1280x800 screen.
    The Note 10.1 probably has a higher margin than the Transformer Infinity too, which has a 1920x1200 screen.
  • -2 Hide
    Hspito , August 28, 2012 5:55 PM
    Funny, people here are always saying that Apple sells overprice stuff but some how Samsung has a bigger margin profit in their Galaxy note than the iPad (both sell for $499)...... Tell me again, who is selling overpriced stuff?
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