The Galaxy S25 with better AI capabilities may end up costing you more in the end

About a month ago, a well-known tipster on the Weibo social platform shared worrying news about the upcoming Galaxy S25 launch, explaining why the series might sell for a higher-than-usual price next year. The reason was likely due to the higher manufacturing costs of Qualcomm Snapdragon 8 Gen 4 chips, not any decision by Samsung. Now, a market analyst may be offering a bit more insight into what the future holds for Samsung and S25 buyers.

American chip designer Qualcomm is reportedly set to begin production of its next-generation Snapdragon 8 Gen 4 chip in the second half of 2024. This is an upgrade over the current Snapdragon 8 Gen 3 chip and is expected to have better AI processing capabilities, and Samsung is a major customer of Qualcomm that is expected to adopt the next-generation SoC in its devices. For Samsung, the chip is expected to debut alongside the Galaxy S25 series, due for release in early 2025.

The bad news is that the Snapdragon 8 Gen 4's technological advancements may drive up costs, which could lead to higher prices for upcoming smartphones, including the Galaxy S25.

According to a recent prediction by industry watcher Ming-Chi Kuo ( Phone Arena), Qualcomm may increase the cost of the Snapdragon 8 Gen 4 by 25-30% compared to the Gen 3 solution.

Could Samsung's own Exynos chips be the savior?

The Snapdragon 8 Gen 4 will be manufactured on TSMC's 3nm N3E process, the same advanced manufacturing process used to produce Apple's A18 Pro chip.

This change is expected to make the Snapdragon 8 Gen 4 25-30% more expensive than the Snapdragon 8 Gen 3. The latter is priced at around $190-200, so the upcoming Snapdragon 8 Gen 4 might be priced as high as $260.

The expected price increase for the Snapdragon 8 Gen 4 is out of Samsung's control, but the company theoretically has some options to address the issue.

What's least likely is that Samsung won't raise the price of the S25 to absorb the additional cost of the new chips, or it could cut corners in other areas like the battery, display, or build quality to make up for the higher cost of the chips.

Another option for Samsung would be to use its new in-house Exynos silicon across the entire Galaxy S25 lineup, freeing itself from Qualcomm's manufacturing burden — assuming the Exynos 2500 doesn't end up being too expensive. Either way, if S flagship customers aren't yet fully accustomed to the idea of ​​Exynos being a better chip than it was two years ago, this strategy could backfire and hurt S25 sales.

Previous reports have suggested that the Galaxy S25 series may not be an Exynos exclusive after all next year, as Samsung may split its lineup between Exynos 2500 and Snapdragon 8 Gen 4 chips, so at the time of writing, an all-Exynos flagship series seems unlikely.

It remains to be seen what will happen in the coming months, but what's more likely is that Samsung will raise the launch price of its upcoming Galaxy S25 smartphone to compensate for Qualcomm's rising production costs.

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The Snapdragon 8 Gen 4 will be manufactured on TSMC's most advanced processes and should bring improved performance to the CPU, GPU, and NPU (AI processing).

The rise of AI capabilities, backed by increasingly powerful mobile chips, is expected to offset potentially rising prices for premium smartphone models. Samsung introduced Galaxy AI earlier this year, and is expected to continue adding and improving on the system with each new generation of flagship models.

However, many generative AI capabilities are also language-restricted, and at least some customers may feel that the higher price tag for more AI capabilities isn’t worth the trouble.