Why do Phones cost more than Laptops?

[ItalianLad]

I was just wondering, why do phones cost so much more than Laptops when clearly there isn't anywhere near the same amount of raw materials that is present in a Laptop/Desktop.

Yeah, I get it, Marketing, Servicing and Shipping are all things that add up to the final cost of a product. but, Laptops and Desktops are things that cost a lot more to service and ship. Marketing is in fact a lot less costly for PCs.

 

So why?

[LogicWeasel]

The parts that go into phones have extra expense due to HOW small they must be.  The laptop motherboard has so much more space and can use mass-produced CPUs and modular parts.  Phones aren't even slightly modular, they get one motherboard, everything is soldered on including the RAM and storage, and there is very little room to cool the SoC.  Also they need more parts than most sub-$700 laptops because they have to have a modem, antenna, touchscreen, quality digitizer, and certification for LTE bands (the expense of the qualcomm chip being approved by carriers like Sprint/Verizon), etc.

[Pixel5]

first of all phone tend to have many functions and there for sensors that laptops dont havef or example GPS, a Compass, Ambient light sensors and a bunch of cameras

Not to mention all phones come with a GSM module and today usually with support for everything from 2G to 4G or even 5G

 

Especially the GSM and 4G chips are usually integrated into the SOC which is why it is a custom made part just for phones, this is also the case because phones have much smaller batteries and all the electronics need to be more power efficient.

 

all of this adds up to higher production cost but overall you also have to factor in that the profit margin, especially on high end phones, is MUCH higher than it is on laptops of the same price range.

 

 

[ItalianLad]

Yet the same argument could be made for the amount of features that go into a Laptop with GPUs Cuda-Cores and all. I think that specially because the phones have a lot more power eficiente systems and less material due to it all being processed in one chip that it should cost a lot less, no?
I mean, even if it was about the size of the components and the fact that they are spaced out in a way that makes manufacturing easier, that could have only been the case for the first few, but now that part has been nailed down to perfection to the point it would be easy to do so. if anything PCs have a much harder time in that regard with CPUs and GPUs nodes and VRMs giving a hell of a hard time to develop further.

[dizmo]

Very few things produced are priced simply on their BOM cost. Phones are a much more mass market commodity, so the pricing will be higher; there's simply more market for them. If you think marketing for phones is less than laptops, you're really not that informed. Samsung, for instance, spent over $10,000,000,000 in marketing alone in 2017. It's also a little incorrect to make the blanket statement that all phones cost more than laptops; there are many, many phones that cost significantly less than laptops do. If you're talking about higher end models, then yeah, they're more, but you're also not paying for the materials then, you're paying for what the phone offers performance wise.

 

23 minutes ago, LogicWeasel said:

The parts that go into phones have extra expense due to HOW small they must be.  The laptop motherboard has so much more space and can use mass-produced CPUs and modular parts.  Phones aren't even slightly modular, they get one motherboard, everything is soldered on including the RAM and storage, and there is very little room to cool the SoC.  Also they need more parts than most sub-$700 laptops because they have to have a modem, antenna, touchscreen, quality digitizer, and certification for LTE bands (the expense of the qualcomm chip being approved by carriers like Sprint/Verizon), etc.

Their small size doesn't mean they're more expensive, and actually probably helps their cost as you can fit more of them onto a die. Very few phones these days use separate modems, they're built into the SoC. Laptops also require antenna, so that cost is a moot point as well.

 

[ItalianLad]

4 minutes ago, dizmo said:

Very few things produced are priced simply on their BOM cost. Phones are a much more mass market commodity, so the pricing will be higher; there's simply more market for them. If you think marketing for phones is less than laptops, you're really not that informed. Samsung, for instance, spent over $10,000,000,000 in marketing alone in 2017. It's also a little incorrect to make the blanket statement that all phones cost more than laptops; there are many, many phones that cost significantly less than laptops do. If you're talking about higher end models, then yeah, they're more, but you're also not paying for the materials then, you're paying for what the phone offers performance wise.

 

 

 

The marketing bit came across the wrong way, I meant it the other way arround.

Still, due to there being a hell of a lot bigger margin of profit due to shear size of the market, it should cost, if anything, less.

Yes, although there are phones that cost less than laptops, these seem more reasonably priced, that seems something hard to argue against.

I made this blanket statement due to what interests me are higher end models not the more affordable ones.

 

Even when you are paying for what the phones offer performance wise, when the background software has been standardized (Android or iOS), the performance aspect of it is bound to the components, so therefore, it doesn't make much sense.

[Mooshi]

52 minutes ago, ItalianLad said:

I was just wondering, why do phones cost so much more than Laptops when clearly there isn't anywhere near the same amount of raw materials that is present in a Laptop/Desktop.

Yeah, I get it, Marketing, Servicing and Shipping are all things that add up to the final cost of a product. but, Laptops and Desktops are things that cost a lot more to service and ship. Marketing is in fact a lot less costly for PCs.

 

So why?

Anything smaller cost more to get tech to fit in that confined space. You can spend $1.5k on a desktop and the mid tower will be more powerful at the price than a SFF machine needing specialized SFF components.

 

And Apple shown people are willing to spend 1k on a phone so now this is the new norm for high end devices.

 

On a real note, I use my phone more than I do my desktop and this isn't unique. My desktop or laptop really get used when I want to game.

[Kisai]

39 minutes ago, ItalianLad said:

I was just wondering, why do phones cost so much more than Laptops when clearly there isn't anywhere near the same amount of raw materials that is present in a Laptop/Desktop.

Yeah, I get it, Marketing, Servicing and Shipping are all things that add up to the final cost of a product. but, Laptops and Desktops are things that cost a lot more to service and ship. Marketing is in fact a lot less.

 

So why?

Almost 30% of the cost of a phone is the radio. This is due to patents. Compare the price of the iPad vs the same model with the 4G LTE radio.

 

Then you have the chips themselves. You don't see Apple putting their A-series chips in laptops and desktops. This will never be a thing. They do not scale in that direction. Low-power devices, have low-power designs, and thus instructions to make them have low power.

 

This is why you will never see an Intel x86-64 CPU in tablet or phone, it's just not power efficient enough to go into one. The "tablet" devices with them don't last even half the time of the iPad or require batteries that are twice as thick.

 

Likewise why the PS4 and Xbox One use essentially desktop CPU's in their designs. If they had mobile or smartphone CPU/GPU's they would never overheat, but they would also be limited to that which would run on a mobile device, which is to say their performance would be cut by 75%.

 

In order to scale a mobile CPU up to that of desktop, it could only be scaled horizontally (more cores), not vertically (higher speed), because you can't give the mobile cpu more power, it will melt. That means the software has to be designed that way, and desktop software is just never designed to use more than 1 core because of entrenched 1970's programming paradigms.

 

That is why analysts are always wrong about Apple putting their A-series CPU's into laptops. It's just not going to ever happen. They will scale their iPad up to hit the performance expectation of a laptop (and arguably it's more useful than a Macbook Air to begin with) but they're never going to make an ARM Macbook. If you need Mac Software, you're going to use OSX. If you need designed-for-tablet software, you are going to use the iPad.

 

As it is, "tabletpc"'s have always been something of a failure. They appeal to exactly one type of customer, the artist. For everyone else, "touch" tabletpc's are basically a toy and are more useful in environments where you don't want a keyboard present. Like kiosks, point-of-sales devices, industrial controls, etc. But because capactive touch doesn't work with gloves on, half of these use cases are rendered unusable.

 

Which goes back to this issue with why do phones cost so much. The phone is a compromise so you don't have to carry $100,000 in equipment around.

 

Phones have "good enough" picture/video cameras, but they're ultimately rubbish and can not be compared to a $50,000 camera.

 

Phones have "good enough" audio recording that you don't need to carry around anything to do an interview with someone

 

Phones have "good enough" compute power to play games you'd see on other mobile platforms like the Nintendo Switch, or earlier devices like the 3DS or PSP Vita, but they're not good enough to play FPS type games.

 

Phones have "good enough" input for applications and games that rely on "click and drag" gestures. The touch screen sucks for everything else, and games ported to phones typically emulate the "controller" of a game console on the screen, and are just poor experiences.

 

Phones have "good enough" touch input for finger-painting. You need a stylus to do anything artful. That still puts them ahead of more desktop PC's which lack any means of touch input other than maybe a touch-pad "mouse" found on laptops.

 

But ultimately a smartphone doesn't excel in any of these use cases. A $2,000 DSLR or Camcorder takes better photos and video than any smartphone. A $2000 gaming PC leaves a smartphone in the dust for games, and a $500 pen-tablet-display device is still better than a smartphone for drawing.

 

[dizmo]

2 minutes ago, ItalianLad said:

The marketing bit came across the wrong way, I meant it the other way arround.

Still, due to there being a hell of a lot bigger margin of profit due to shear size of the market, it should cost, if anything, less.

Yes, although there are phones that cost less than laptops, these seem more reasonably priced, that seems something hard to argue against.

I made this blanket statement due to what interests me are higher end models not the more affordable ones.

 

Even when you are paying for what the phones offer performance wise, when the background software has been standardized (Android or iOS), the performance aspect of it is bound to the components, so therefore, it doesn't make much sense.

Why would you lower pricing if people are willing to pay what you have it priced at? That would be an absolutely horrible business model. 

 

Ok, so, it's much like cars. When you pay for a performance car, you're paying for the engineering and the performance they provide. These cars don't have many more parts that a regular car, and the costs to produce them (aside from exotic materials) is the same. You chose to get the performance model, and as a result, you chose to pay the higher price for the features it provides. 

 

Your last statement makes little sense. 

[dizmo]

9 minutes ago, Caroline said:

Brand, in some consumerist societies having something samsung or apple gives people certain "status" that for example someone with a chinese mobile doesn't has, pretty dumb but that's how they work, probably costs about $100 to manufacture a phone and somehow they sell them for $1000 and get away with it.

Well, R&D budgets have to come from somewhere. Phones cost a lot more than $100, most BOMs are around $200+. That's just materials, doesn't include marketing, R&D, logistics, etc. 

 

Anyone that simply looks at the BOM cost of an item and complains about its cost is incredibly naive. 

[wasab]

Corporate greed. Don't let anyone tell you otherwise. 

[Mira Yurizaki]

2 hours ago, dizmo said:

Very few things produced are priced simply on their BOM cost.

To add to this, I think the high-end iPhones still costs <$300 to make.

 

Where does that extra $700 come from? /rhetorical

[Commodus]

1 hour ago, Caroline said:

Brand, in some consumerist societies having something samsung or apple gives people certain "status" that for example someone with a chinese mobile doesn't has, pretty dumb but that's how they work, probably costs about $100 to manufacture a phone and somehow they sell them for $1000 and get away with it.

To add to what dizmo said: not only is there a lot more to the cost of the phone than the raw parts and manufacturing, but those bill-of-materials estimates are frequently off.  Apple's Tim Cook even called out those BOM estimates as garbage during a fiscal results call.

 

If you want to know the approximate profit margin for a phone, look at the company's gross margins and work from there.  Apple estimated that its gross margins will hover between 37.5% and 38.5% for the last calendar quarter of 2019.  I'm having trouble finding Samsung's current gross margins, but I understand that they're not that far off for its highest-end phones near launch, and it's lower for at least some of the lower-cost phones.  Now, there are numerous phone makers with smaller profit margins, but keep in mind that many of those companies aren't doing well -- part of why Apple and Samsung are still top dogs in the phone world is because they don't rush to commit financial hara kiri in the name of half a point of market share.

[Mark Kaine]

They aren't really. You're comparing apples to oranges... 

 

High end laptops cost way more than high end phones - surely on average. 

 

And you can get a fully functional phone which is pretty much ok for like 200 bucks,  try that with a laptop...  It'll be basically dysfunctional except for most basic tasks...

 

Phones have pretty much plateaued whereas laptops still get the usual improvements just like PCs do. 

 

 

This happens a lot on the Internet, someone comes up with a narrative or "comparison" without a real basis and everyone goes with it like it had any merit. 

 

 

~ sent from my Sony Xperia Z3 "compact"  lolz 

[amdorintel]

4 hours ago, ItalianLad said:

I was just wondering, why do phones cost so much more than Laptops when clearly there isn't anywhere near the same amount of raw materials that is present in a Laptop/Desktop.

Yeah, I get it, Marketing, Servicing and Shipping are all things that add up to the final cost of a product. but, Laptops and Desktops are things that cost a lot more to service and ship. Marketing is in fact a lot less costly for PCs.

 

So why?

Because people are willing to pay $1500 for a cell phone, and not pay $1500 for a laptop. And you cant get a $1500 laptop for $35/month so the threshold of credit worthiness is lower.

[Dredgy]

Short answer: Cameras.

 

Long Answer: They don’t. A top spec phone might cost more than a mid spec laptop, but a top spec laptop is a very expensive thing that easily eclipses the highest end phone. 
 

complicated answer: Also, cutting edge technology ends up in phones first these days so raw parts cost is a factor - camera tech in particular is very expensive (put three high quality cameras inside a laptop and watch the price skyrocket). Screen tech is also not cheap - and modern flagships have super colour accurate, high resolution OLED displays, But also look at the Galaxy Fold, probably the most expensive phone on the market - there is exactly 0% chance Samsung makes any money on it, but they need to prove the technology, need to be first to market with it etc. Then most phones are subsidised over 12 to 24 months as part of a service contract whereas laptops are not.

[Donut417]

On 12/14/2019 at 3:35 PM, ItalianLad said:

hy do phones cost so much more than Laptops

Firstly the engineering that goes in to them. Then you have the fees that Google charges makers for access to the Google Play store. Add in what ever refinements that the phone makers does to the OS, software devs dont get paid in peanuts. Because phones transmit over REGULATED bands, the government is invovled, so there is definatly cost there. 

[LogicWeasel]

3 hours ago, Donut417 said:

Then you have the fees that Google charges makers for access to the Google Play store

That isn't a fee if the default browser in the android image is Chrome and the default search app is google.  It's just in the EU where they hit them with anti-trust where they made google not require that for play store access, so then they opted to charge a fee since they weren't getting the browser and app placement they wanted.

[NeuesTestament]

Short answer: Because people pay that amount for them.

[DoctorNick]

31 minutes ago, NeuesTestament said:

Short answer: Because people pay that amount for them.

Exactly. Because the iPhone crowd payed $$$ and then Samsung followed their pricing and the rest is history.