Why Smartphones cost $150 to build / sold for $800?
When a company such as Samsung sells a Samsung Galaxy S5 to a customer for $800 that’s $800 profit that goes into Samsungs pocket right? Wrong.
When a Samsung Galaxy S5 is built for $100 that’s now only $700 profit for Samsung, but there’s more.
Samsung now has to use $500 of there $700 profit for advertising. If Samsung didn’t advertise their products and their company then no one would know who they were or what they did and Samsung wouldn’t sell anything.
So most of the money spent on a Samsung Smartphone goes towards advertising the company.
This all relates to the OnePlus One smartphone. Because OnePlus does not charge money for advertising, they can sell their “Flagship Killer” Smartphone for a very low price ($300).
The downfall of not advertising means that OnePlus cannot build and sell millions of OnePlus One devices because if they did they would HAVE TO sell EVERY device or they would go bankrupt for not making enough profit.
In order to avoid bankruptcy OnePlus only builds a few hundred devices at a time and send “Invites” which allow customers to enter a code on the OnePlus website to buy their OnePlus One.
Also, every customer gets their own invites from OnePlus that they can send out to friends etc.
(stats were made up to give examples)
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