It costs more to build a Samsung Galaxy S4 than to build an iPhone 5
This should silence all those who say that Samsung phones are cheap and that iPhone means ‘premium quality’. According to IHS’s tear down analysis, it costs Samsung $237 per unit to build Samsung Galaxy S4 and iPhone 5 on the other hand costs $207. Once manufacturing cost is added, the total price goes up to $244. To rub salt on wounds, Galaxy S3 HSPA version costs as much as iPhone 5. The highest priced component in GS4 is the 5″ Super AMOLED display (as expected) that costs $75 but is in-sourced from Samsung’s display manufacturing section. Some may say that it costs just $244 to make but Samsung is milking in excess of $700 per device. What we mentioned here is manufacturing and component costs but the price goes much higher when the R&D, software and distribution costs are added (not to forget the advertising costs). What makes Samsung churn out more profits than competition is the fact that Samsung greatly relies on in-house design and manufacturing of various components used in their smartphones as you can see in the table below.
“Although its hardware is not radically different from the Galaxy S III introduced in April of 2012, the Samsung Galaxy S4 includes some critical component updates that enhance its functionality as well as its BOM cost,” said Vincent Leung, senior analyst for cost benchmarking at IHS. “Among the upgrades are a larger, full high-definition (HD) display; a beefed-up Samsung processor; and a wealth of new sensors that set a record high for the number of such devices in a smartphone design. And despite the larger display and other changes, the Galaxy S4 has roughly the same width and the same ease of handling as the Galaxy S III.”
The following table explains the component costs for Samsung GS4 HSPA version, LTE version and the Galaxy S3 HSPA version:
