According to a report from TechInsights, component costs for manufacturing the Galaxy S6 is estimated at $281, which is 12 percent higher than the Galaxy S5. Inspite of this, Samsung has released the Galaxy S6 at a price lower than the original retail price of the Galaxy S5. It is said that Samsung has paid around $9.2 billion in patent royalties to Qualcomm during the four years since the release of the Galaxy S.
According to a report from Business Korea, Samsung is trying to reduce patent royalties required to manufacture smartphones, and it might already be saving 2.5 – 5 percent on patent royalties by using its in-house Exynos chipset in the Galaxy S6. Up until last year, Samsung used to release multiple variants of its smartphones, some with Qualcomm’s Snapdragon chipsets and the others equipped with its homegrown Exynos chipsets. Starting with the Galaxy S6 and the S6 edge, Samsung went all exclusive with Exynos 7420, and this is hurting Qualcomm.
Now, Qualcomm is thinking to cut its patent royalty fees, because it doesn’t want to lose its biggest mobile application processor customer in the world. especially since its Snapdragon 810 chipset has been riddled with overheating issues. Additionally, Qualcomm is looking to split its technical licensing and chip manufacturing divisions due to the dim state of its current generation application processors.
Not only this, Samsung is also developing its own CPU cores codenamed ‘Mongoose‘ and mobile GPUs, which will be used in the next-generation Exynos chipset. This will reduce Samsung’s dependency on brands like ARM, Imagination Technologies, and Qualcomm, further improving profits.