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Samsung Galaxy S4 Breakdown Reveals $237 Build Cost

Discussion in 'Android News' started by dgstorm, May 9, 2013.

  1. dgstorm
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    dgstorm Editor in Chief Staff Member Premium Member

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    The Samsung Galaxy S4 is the hottest new smartphone on the planet right now. The 16GB version sells in the range of $600-700 USD unsubsidized. The folks at market research firm IHS did a tear-down of the device to create a full breakdown of parts including pricing details. The results of their analysis shows the SGS4 costs Samsung around $237 USD to build (not including overhead and advertising).

    When comparing this to the 16GB version of the Apple iPhone 5, we see that the Samsung cost a bit more to build, since the iPhone's build cost is around $205 USD. This is also more than it costs to build the Nokia Lumia 900, which clocks in at $207 USD. It comes in cheaper but fairly close to the price of the Samsung Galaxy Note, which has a build cost of approximately $270 USD.

    It's also interesting, but unsurprising to note (no pun intended) that most of the components inside the SGS4 are supplied in some way by Samsung themselves. What is surprising is that Samsung pays itself more for the Exynos 5 Octa-core chip in the international version ($28) than it does for the Qualcomm Snapdragon 600 chip in the U.S. version ($20). Here's a quote with some additional info,

    Source: AllThingsD
  2. kodiak799
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    kodiak799 Well-Known Member

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    A few of us were debating this....$28 for 16gigs of internal memory.

    Does that sound like a lot? Well, like many other parts in this phone, Samsung supplies itself. It's not wrong to do transfer pricing at retail, but besides overstating the actual cost no major OEM is paying retail for its parts.

    In general, that applies to all these teardowns. $215 is overstating it when you are grabbing retail prices - I have no idea what bulk purchasing would actually cost on these things- 20% discount? 40% discount? You can price that IPhone at $215 of internal components, but it probably actually only cost Apple $150.
  3. 52brandon
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    52brandon New Member

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    that was $28 for the 16GB internal memory AND 2GB DDR3 chip. My guess is it's more likely around $15
  4. voodoodaddy
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    voodoodaddy New Member

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    $237...so why the $599+ retail cost on these? Id be much more likely to buy phones off contract at $300-350 vs $599 on up. With 6 lines on my plan its just not feasible for me to drop retail price on an upgrade to remain off contract.
  5. dfcfu342
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    dfcfu342 New Member

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    Because people will pay for them. If people stopped buying phones at that price they would come down. However they are still bought at that price and that trend is accelerating so there won't be a price drop anytime soon.
  6. kodiak799
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    kodiak799 Well-Known Member

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    That's just the component costs, which could be a bit inflated. But it presumably does not include labor, definitely does not include R&D, marketing and other overhead.

    It's interesting that they get about $250-$300 subsidy, which means somewhere in the neighborhood of $500-$600 on contract. But note that really only Samsung and Apple have been making money, so I'm not sure how much margin is really in these phones once all the costs are fully loaded.
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