 The Samsung Galaxy S9 Plus only has $375 US dollars worth of materials in it, but it launched at a retail price of $840. What?! And the iPhone X, while actually a little cheaper to assemble at $370, retails to start at about $1000. What if you could buy a phone for much closer to its actual cost? Well, it turns out you can. Welcome back to another installment of why the fu-...advertiser friendly content. Are you guys buying this? Where today, we've got one of the top selling phones on Chinese e-tailer GearBest, the $213 Yumi Digi S2. Not to be confused with the Samsung Galaxy S2. Also today, is this exciting opportunity to learn about Madrina's Coffee. Madrina's Coffee blends specialty cold brew coffees into 16 ounce grab-and-go cans for everyone's convenience. Actually just the convenience of their customers. Check them out and use offer code LINUS to save 40% today. 🎵 🎵 The Umi Digi... Or Umi Digi? Yeah, let's go with that. S2 has hundreds of reviews awarding it 4.78 out of 5 stars on average. And you can order one of these puppies for just $220... Ah, okay, actually it depends what warehouse you order it from because GearBest is super weird. But let's call it $213. Now based on the language of the bulk of the reviews, the S2 has been a bigger hit in Russia, Poland, and Italy than it has in the fancy ass US&A. But that doesn't necessarily mean that you'll get ridiculed by your flagship fondling friends because the S2 doesn't look like a budget phone. It has a 6-inch edge-to-edge display in the chic 18x9 aspect ratio, an anodized aluminum chassis with a USB type-C port, and it's got a dual lens rear camera right above the rear fingerprint reader. And the internals aren't terrible either. Unlike some value smartphones, it's got 64 gigs of storage and it's expandable via microSD in the dual-SIM slot. It has the same amount of RAM as the Google Pixel 2, and it has nearly double the rated battery capacity of the iPhone X. 5100 milliamp hours. So in practice, getting it to two days is a pretty easy feat. Now compare that to what budget phones were like just a few years ago. The Samsung Galaxy S5 and the Motorola Moto E both launched in 2014 with a similar price differential to what we're looking at here. Except that the Moto E was 50% thicker than the Galaxy S5, had half the RAM, and didn't have a front camera. At all. So how then have companies like Umidigi, which was only founded in 2012, managed to close the gap so much? Well, there are three main reasons. First, the small brands avoid some of the expenses that eventually trickle down into the price of premier brand phones. So they use off-the-shelf components instead of researching and developing their own cutting-edge tech. They focus on online and guerrilla-style marketing instead of doing things like spending $15 million on a single Super Bowl commercial. They rely on established e-commerce platforms like GearBest and Amazon instead of trying to build out their own stores. And they benefit from what's called the economies of agglomeration. What that means is that since everything is made in and around Shenzhen, China, they have easy access to manufacturing talent and inexpensive labor without having to invest much in their own logistics. The second way that Chinese companies keep the price down is by flat-out paying less for their components. And now, I'm not even necessarily talking about using older, inferior technology. I'm talking about using the exact same parts that could be in your Samsung or your Apple phone, but for less money. So how do they get a deal like that? The answer is binning. A big brand with a reputation to uphold will buy the supplier's best parts, their A parts, batches of thousands of units where maybe only 1% of them are likely to fail that manufacturer's quality checks. But as for value brands like this one, they'll buy batches with significantly higher failure rates and much lower price tags to match. Strategy number three for keeping the cost down is to just not make any profit on the device. Now, Umidigi doesn't do this, but Xiaomi famously sells their phones with zero profit margin in exchange for market share and brand recognition, paying the bills ostensibly by selling accessories like headphones, power banks, luggage, and... Really, slippers. Okay. So does all of this mean then that soon there will be no reason whatsoever to buy a flagship from Google, Apple, or Samsung? The answer is no. No, it doesn't. Because budget phones still have a lot of cut corners. The S2 screen, for example, looks like it was just glued on to the front of a phone instead of being seamlessly integrated into the camphored edges. Though in fairness, once you put it into the included sandstone case, that particular flaw melts away. With that said, there's no hiding the resolution. The S2 has about the same number of pixels as the iPhone 6 from 2014, but they're spread over a larger area, giving it about half the pixel density of the leading phones at size. And this is noticeable when you're reading text, and in particular, in the way that Netflix seems to handle streaming content to this phone, it looks noticeably worse than even other value devices. And then there's the camera. While it isn't a complete potato patch, the dual lens business is basically a complete marketing gimmick, because the bokeh mode doesn't do... I mean, it just doesn't work, like, at all. It just kind of makes everything but the center of the frame blurry. It's just stupid. Like, look at this. It's just... It's like rubbing Vaseline on every part of the lens that isn't the very center here. Nobody takes pictures like that. I mean, never mind not having AI-assisted, you know, bokeh background removal. There's no eye even. There's no consideration of depth at all. It's a total joke. And then finally, there's the support, or lack thereof. I was having issues with my Pixel 2 XL, and Google quickly, effortlessly dealt with the RMA for me, even offering advanced replacement. I would be floored to hear a similar story about Umidigi. And as for software, this thing is running Android Marshmallow, which launched in 2015, and it will probably run Marshmallow forever. That might not seem like a huge deal on the surface, but Android didn't even have a built-in flashlight utility at that point. And it's got Google Now on tap instead of the Assistant, which you can't get unless you do this one weird trick that phone manufacturers hate. So is it time for you to stop spending your life savings every time you need a new phone? The Umidigi S2 is a near-stock, if a little dated, Android experience with almost no bloat, and it's not even that slow. So if you don't care much about the camera, and some people don't, I say it's time for us to take a long, hard look in the mirror and ask ourselves, do I really need the latest and greatest? Need is a strong word, but the speakers are awful. Fast charging is a super nice thing to have. And that, oh man, that Netflix experience. I don't remember the last time I saw a movie look this bad. And I like Marvel movies. Speaking of things I like, I like telling you guys about Dollar Shave Club. We all have our everyday grooming routines. You know, showering, brushing your teeth, we all have them. But maybe you didn't know that Dollar Shave Club has all of your grooming products, toothpaste, body wash, hair styling products, everything you need to look for in a good, clean, clean, clean, clean, clean, clean, clean, clean, feel and smell your best. Everywhere. Have you seen their One Wipe Charlies? Yeah, that's right, they're peppermint scented. And Dollar Shave Club is basically giving away their daily essentials starter set to new members for just five bucks. In your first box, you'll get their shave butter, body wash, and One Wipe Charlies butt wipes, and you'll also receive their executive razor, which includes their premium weighty handle and a full cassette of cartridges. After the first box, replacement cartridges are sent to you for just a few bucks a month, so check it out at dollarshaveclub.com slash Linus. We're gonna have that linked below. So thanks for watching, guys. If this video sucked, you know what to do. But if it was awesome, get subscribed, hit that like button, or check out the link to where to buy the stuff we featured in the video description. Also linked down there is our merch store, which has cool shirts like the one I'm wearing, and our community forum, which you should totally join.