The Pixel 7 Pro costs $413 to produce, 51% of which goes into a competitor’s pocket

The smartphone market is complex where competitors are sometimes also partners. The cost of production analysis of the Google Pixel 7 Pro is a perfect example.

A Counterpoint analysis reveals that the production cost of a Google Pixel 7 Pro would be around $413 for the version with 128 GB of storage. Of this sum, only 7% of the components would be produced by Google. On the other hand, 51% of them would come from the same supplier: Samsung.

Google very dependent on Samsung to produce its smartphones

Samsung plays a critical role in Google’s presence in the high-end smartphone segment. Indeed, just over half of the components of the excellent Pixel 7 Pro are manufactured by Samsung, which is both an important partner, but also a direct competitor with its Galaxy S23 Ultra in particular. Being able to have it both ways is one of the great strengths of the Korean manufacturer, which remains the world leader in smartphone market share today.

With 20% of the total production cost, the Pixel 7 Pro screen is the part that costs Google the most. Samsung Display is thus the exclusive supplier of the 6.7-inch OLED panel that equips Google’s high-end phone. For the Korean brand, this screen represents 39% of the revenue generated by the Pixel 7 Pro.

The Google Pixel 7 Pro is one of the best photo smartphones on the market. It owes its results to the impressive software processing that Google has developed, but also to the ISOCELL GN1 sensor of the main camera module, manufactured by Samsung. The Korean giant does not stop there as it also produces the sensors for the telephoto modules and the front camera.

That’s already a lot, but the list is not yet complete. Thus, Samsung provides Google with the cellular communication system (4G/5G) of the Pixel 7 Pro, as well as integrated circuits that are used for the audio experience of the phone.

Core to the Pixel 7 Pro, the Google Tensor G2 chip was co-developed with Samsung. Engraved in 5nm, the SoC is made up of the CPU, the TPU (Tensor Processing Unit) which accelerates artificial intelligence systems, and the GPU which takes advantage of the Mali-G710 MP7 cores to improve the graphics performance of the phone. With the Titan M2 co-processor dedicated to security, which is also co-designed, Google represents only 7% of the total cost of the components of its smartphone.

Other Google Providers

With 51% of the components manufactured by Samsung, Google is extremely dependent on Samsung to produce its smartphone. Google’s other suppliers only share 42% of the pie. Examples include SK Hynix, which manufactures the storage memory, Micro, which takes care of part of the RAM (with Samsung), ATL and Sunwoda Electronics, which supply the 5000 mAh battery. For their part, NXP and IDT take care of wired and wireless charging.

The Counterpoint graph highlights the complexity of the manufacturing process of a smartphone and the large number of stakeholders required to manufacture it. Many brands are now looking to produce their own components to better control their costs and availability. This is the case of Apple, which is starting to manufacture its own screens.

Source :

Counterpoint