Samsung’s Galaxy S5 Costs About $256 to Build

[TOMPPIX]

 

It is always funky to see what a device initially is costing to produce with the knowledge that you know what you pay for in the stores. The Galaxy S5, Samsung’s new flagship smartphone, costs about $256 to build according to a teardown analysis by market research firm IHS. The device sells for $660 without a contract, implying a gross margin for Samsung of about 60 percent. Samsung declined to comment on IHS’ findings.

The cost of components, known in electronics industry lingo as a bill of materials, has been drifting upward on Samsung phones in recent months, said Andrew Rassweiler, an analyst who heads up IHS’ teardown research efforts. “Our main takeaway is that Samsung has been moved up to the higher end of the cost spectrum. It used to be that its typical flagship phone sold for $600 without a contract and had a bill of materials of about $200,” Rassweiler said. “Now they’re inching up above $250 regularly.”

 

 

SOURCE

[hawaiims]

You don't say?

 

1. metal construction is extremely expensive which is why samsung stuck with plasticky builds

 

2. The snapdragon 801 is just a higher clocked 800. It shouldn't cost much and phones with the snapdragon 800 can sell for 300$ (nexus 5)

 

3. Screen is the usual over saturated "super duper gazillion AMOLED Pure Pixel+ zomg" Samsung screen. Having owned both a note 3 and an s4 they also have the burn in problem. Contrast is amazing since black pixels are off, but as far as power consumption it's not actually as beneficial as you might think because despite black pixels not using any power, other colored pixels actually use more than a regular LCD display. Again, burn in of the taskbar has also been an issue after 3 months of use only.

 

4. 2GB of ram is the same amount as the older s4

 

5. Camera modules are cheap and the one in the s5 isn't overly complicated or amazing 

[AlwaysFSX]

Can someone please explain to me why phones are so expensive? Give me one really good reason I should fork over $660 for a freaking phone. I'll stick to my $50 brick until that time comes around.

[ZetZet]

Can someone please explain to me why phones are so expensive? Give me one really good reason I should fork over $660 for a freaking phone. I'll stick to my $50 brick until that time comes around.

Novelty.

[Puppet]

It's not exactly 60% profit once you factor in marketing, paying employees and logistics etc but I'm fairly certain they are getting a good deal out of it.

[Nineshadow]

Can someone please explain to me why phones are so expensive? Give me one really good reason I should fork over $660 for a freaking phone. I'll stick to my $50 brick until that time comes around.

Samsung(or any other manufacturer) : GIMME MORE MONEY.GIBE MONEEEEY!!

༼ つ ◕_◕ ༽つ MONEY!!!!

[lufihengr]

 

 

3. Screen is the usual over saturated "super duper gazillion AMOLED Pure Pixel+ zomg" Samsung screen. Having owned both a note 3 and an s4 they also have the burn in problem. Contrast is amazing since black pixels are off, but as far as power consumption it's not actually as beneficial as you might think because despite black pixels not using any power, other colored pixels actually use more than a regular LCD display. Again, burn in of the taskbar has also been an issue after 3 months of use only.

 

Wow, I have not heard of this before! I have had my Note 2 For nearly 2 years and no issues. My dad has a note 2014 and no issues. My mom has an S4 and no issues.

[qwertywarrior]

yay....

every one knows this  (cost alot less )

they never include other costs

[Nineshadow]

Wow, I have not heard of this before! I have had my Note 2 For nearly 2 years and no issues. My dad has a note 2014 and no issues. My mom has an S4 and no issues.

Oh there is.AMOLED burn-in is very known.It's not noticeable unless you want to spot it though(unless very bad situation).

[qwertywarrior]

Can someone please explain to me why phones are so expensive? Give me one really good reason I should fork over $660 for a freaking phone. I'll stick to my $50 brick until that time comes around.

1.advertising  ( a large LARGE chunk)

2.Logistics a LARGE cost

3. packaging

etc

 

that the reason nexus devices are cheap also u can take a look at chinese phones like Xiaomi

[hawaiims]

Wow, I have not heard of this before! I have had my Note 2 For nearly 2 years and no issues. My dad has a note 2014 and no issues. My mom has an S4 and no issues.

I am not trolling or joking, it's legitimately a problem. The note 2 doesn't have that problem because it doesn't use amoled I think and the S4 however does and has burn in problems (except the s4 active and maybe some other models that use a regular lcd)

 

Oh there is.AMOLED burn-in is very known.It's not noticeable unless you want to spot it though(unless very bad situation).

noticeable whenever you have a light or white background in the spot where the taskbar normally is

[Nineshadow]

I am not trolling or joking, it's legitimately a problem. The note 2 doesn't have that problem because it doesn't use amoled I think and the S4 however does and has burn in problems (except the s4 active and maybe some other models that use a regular lcd)

 

noticeable whenever you have a light or white background in the spot where the taskbar normally is

But I haven't had my taskbar for like 1+ years..Nova Launcher!!

[hawaiims]

1.advertising  ( a large LARGE chunk)

2.Logistics a LARGE cost

3. packaging

etc

 

that the reason nexus devices are cheap also u can take a look at chinese phones like Xiaomi

bullshit, they just like to price their phones so high because they have no reason to drop their prices thanks to consumers who are willing to fork over the cash without thinking about how much it costs to make.

 

advertising may be a big cost to a company like samsung, but then again they move 10x as much as their next closest competitor so it balances out as far as profit

logistics are not a particularly large cost these days. most of these phones are made in the same freaking Chinese factories and they take care of sourcing the parts and all that

packaging is cheap as hell because phones are small, easy to ship and not prone to breaking like hard drives for example would. also, there are no accesories included in many carrier versions. Usually they just include the phone and a cable (yes, sometimes you don't even get a charger). No headphones, no free screen protector, none of that.

[kinkywink]

It's not exactly 60% profit once you factor in marketing, paying employees and logistics etc but I'm fairly certain they are getting a good deal out of it.

dont forget prototypes and such, but realistically its probably no profit until they sell around 25% of the population phones - because everyone has to have the best and latest >.> 

[Cubit481]

Can someone please explain to me why phones are so expensive? Give me one really good reason I should fork over $660 for a freaking phone. I'll stick to my $50 brick until that time comes around.

So that some people can show off their slipper sized phones stuck on to ur head while talking on the phone...lol... :lol:

[lufihengr]

I am not trolling or joking, it's legitimately a problem. The note 2 doesn't have that problem because it doesn't use amoled I think and the S4 however does and has burn in problems (except the s4 active and maybe some other models that use a regular lcd)

 

 

Quote from the samsung website http://www.samsung.com/global/microsite/galaxynote/note2/benefits.html?type=find

 

 

GALAXY Note II’s 5.5” HD Super AMOLED screen

[Puppet]

bullshit, they just like to price their phones so high because they have no reason to drop their prices thanks to consumers who are willing to fork over the cash without thinking about how much it costs to make.

 

advertising may be a big cost to a company like samsung, but then again they move 10x as much as their next closest competitor so it balances out as far as profit

logistics are not a particularly large cost these days. most of these phones are made in the same freaking Chinese factories and they take care of sourcing the parts and all that

packaging is cheap as hell because phones are small, easy to ship and not prone to breaking like hard drives for example would. also, there are no accesories included in many carrier versions. Usually they just include the phone and a cable (yes, sometimes you don't even get a charger). No headphones, no free screen protector, none of that.

 

I wouldn't say its bullshit, they clearly make a decent profit, but those additional costs definitely mount up. R&D is another example of a massive cost.

 

I think one of the main reasons they make so much profit compared to competitors is that they manufacture a lot of their own components and also supply them to other manufacturers. I'm pretty sure they make the a lot of the panels and memory for Apple devices.

[kuddlesworth9419]

Can someone please explain to me why phones are so expensive? Give me one really good reason I should fork over $660 for a freaking phone. I'll stick to my $50 brick until that time comes around.

£50 is too much man. Mine cost £25 and it has a colour screen. I am actually waiting just like you are for a phone that doesn't suck and has a reasonable price tag. 

[s3ns3]

You don't say?

 

1. metal construction is extremely expensive which is why samsung stuck with plasticky builds

 

 

iphone 5s cost 200$ to make

 

1.advertising  ( a large LARGE chunk)

2.Logistics a LARGE cost

3. packaging

thats like what,100$ x phone more ?

[Sneaky]

They also put a lot of money in to research and development.

[StingBull]

Maybe there is a perfectly acceptable explanation for why the base model of S5 cost over 1000 USD in my country. I don't fucking think so though.

[Nineshadow]

Maybe there is a perfectly acceptable explanation for why the base model of S5 cost over 1000 USD in my country. I don't fucking think so though.

Yep.Same story here.HTC M8 costs $1100 though.

[Puppet]

Maybe there is a perfectly acceptable explanation for why the base model of S5 cost over 1000 USD in my country. I don't fucking think so though.

 

Yep.Same story here.HTC M8 costs $1100 though.

 

Import taxes?

[Nineshadow]

Import taxes?

What import fucking taxes?24% VAT,that's all.

[LAwLz]

You don't say?

 

1. metal construction is extremely expensive which is why samsung stuck with plasticky builds

 

2. The snapdragon 801 is just a higher clocked 800. It shouldn't cost much and phones with the snapdragon 800 can sell for 300$ (nexus 5)

 

3. Screen is the usual over saturated "super duper gazillion AMOLED Pure Pixel+ zomg" Samsung screen. Having owned both a note 3 and an s4 they also have the burn in problem. Contrast is amazing since black pixels are off, but as far as power consumption it's not actually as beneficial as you might think because despite black pixels not using any power, other colored pixels actually use more than a regular LCD display. Again, burn in of the taskbar has also been an issue after 3 months of use only.

 

4. 2GB of ram is the same amount as the older s4

 

5. Camera modules are cheap and the one in the s5 isn't overly complicated or amazing 

I see you haven't actually researched the Galaxy S 5. I suggest you do so before trying to talk crap about it.

 

 

As for why they are so expensive, supply and demand. If people stopped buying them at such ridiculous prices then they would drop in price.

Don't get me wrong. The Galaxy S 5 is still overpriced, but other companies are just as guilty of this. Actually, the Galaxy S 5 is very expensive to manufacture compared to other phones.

I really hope Google continues to release cheap yet high end phones.

 

 

Metal is pretty damn cheap (especially aluminum). What's pricey are the CNC machines but you just have to make that investment once. There are A LOT of plastics that are more expensive than aluminum. Not only is it one of the most common materials on earth, but a lot of it used in phones and such are literally recycled soda cans. Aluminum is not expensive or luxurious, just like drinking from a soda can is not expensive or luxurious.

 

Your second point is valid. There are some other differences though (like better manufacturing process) but yeah, it shouldn't really cost more than the old Snapdragon 800.

 

The screen is not oversaturated anymore, compared to other phones. The M8 is just barely more saturated, the LG G2 is the same, the Moto X is far more saturated. Color accuracy is even better than the M8. White temperature is fantastic (the best of any phone on the market by far). Power usage has dramatically gone down. Brightness is up quite a bit and the reflectiveness of the screen is down (both helps improve outdoor visibility).

The burn in problem still exists but I don't get how you could get it on the Galaxy S 4 and note 3 though. Both of them have transparent taskbars for this exact reason. I noticed a slight burnin on my Galaxy S 2 after ~2 years of usage, but I am going to have to call bullshit on you getting burn in on a recent SAMOLED device after only 3 months (unless you had the screen on for basically the entire 3 months).

 

About the camera. The camera is actually really good, and it is fairly complex. It uses a brand new camera architecture. HIS estimate the cameras to cost about 19 dollars. That's quite a lot compared to the iPhone 5S which has cameras that costs about 13 dollars. I suspect that the HTC One lands at around 20 dollar combined as well.

19 dollars is quite a bit of money in a 250 dollar device. 256 dollar BOM is actually very high for a phone. The iPhone 5S for comparison costs under 200 to build.