April 15, 2014
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samsung galaxy s5 aa (8 of 36)

We’ve already had a look at what goes into the new Galaxy S5, thanks to this teardown, and according to an analysis conducted by market research firm IHS, all of the components in the Samsung Galaxy S5 costs around $256 to purchase and put together.

Samsung latest flagship handset is currently being sold for approximately $650 SIM-free, or around $200 with a contract, but the latest gadgets never do come cheap. That works out to a rather healthy $394 profit margin for the SIM-free handset, which equates to around a 60 percent profit for Samsung. Of course that doesn’t factor in other costs such as software development, shipping, or marketing.

IHS estimates that Samsung’s 5 inch Super AMOLED display module is the most expensive component, costing around $63 to produce, whilst the fingerprint scanner and fitness biosensor only cost $15 and $1.45 respectively. I guess it can’t be said that Samsung is wasting a lot of money on small features, they are some of the cheapest components. Samsung also manufactured its own DRAM and flash memory modules for the handset, which only set the company back a combined cost of $33 per device.

“Inside we see mostly a lot of recycled components that we’ve seen before. There’s really nothing special inside where Samsung is pushing the envelope,” Andrew Rassweiler, IHS research

I suppose this bill of materials isn’t so surprising if you recall that the Samsung Galaxy S4 cost around $236 to produce, and not too much has changed internally between the two handsets. If anything, it seems that Samsung may have benefited from falling costs, in some instances, by reusing older components. Samsung’s AMOLED display cost about $75 when the Galaxy S4 was built but has now fallen to $63, the savings from which have been spent on new features, such as IP67 compliance.

“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

Samsung’s flagship production costs have been steadily creeping up though. The Galaxy S3 was estimated to cost $205, the Galaxy S4 $236, the mighty Note 3 $232, and the latest model ends up at $256, making it Samsung’s most expensive smartphone yet. As a side note, the latest iPhone has a bill of materials totalling just $199, yet it still retails for a similar price.

Robert Triggs
Lead Technical Writer at Android Authority, covering the latest trends in consumer electronics and hardware. In his spare moments, you'll probably find him tinkering with audio electronics and programming.
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