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AT&T 16GB Samsung Galaxy S4 costs $237 to build, says report

According to a new report from IHS, the AT&T 16GB version of the Galaxy S4 costs $237 to build. So why do we pay $200, with contract, for the handset? Read on to learn more!
May 9, 2013
samsung galaxy s4 vs galaxy s3 s4 touchwiz aa

You go to buy your new Galaxy S4, reach for your wallet and pull out $200, sign the contract and walk away with the next Big Thing. Or if you don’t like contracts, you throw down around $700 for Samsung’s latest. But how much is the U.S. version of the Samsung Galaxy S4 really worth, when it comes down to parts and manufacturing? About $237, according to research firm IHS.

The latest IHS teardown report arrived today, stating that the bill of materials for the AT&T version of the Galaxy S4 comes in at $229, with the manufacturing costs bringing the total to $237.

How does that compare to the Korean LTE version of the Samsung Galaxy S4? It’s a bit cheaper, with the Korean version coming to $252, combining manufacturing and BOM. What’s really interesting is that despite similar looks, these two versions share very little in common, internally.

samsung galaxy s4 vs galaxy s3 s4 performance aa

We already knew that the processors were different, with a Snapdragon 600 ($20) in the U.S. version, versus the Exynos 5410 ($28), but it doesn’t end there. In fact, about the only two components that bare the exact same vendor and model number are the Samsung display and a Broadcom NFC controller.

When you look at the prices involved to build the Galaxy S4, does mean we are getting hosed, regardless of what version we get? It might seem that way at first glance. After all, most of us pay $200 upfront for such a device, and then there are the prices involved with the two-year contract we commit to.

Just remember, there is a lot more involved with determining the Galaxy S4’s retail cost than just parts and manufacturing. Samsung not only has to pay the costs of assembly and distribution, but they also have to consider support for the devices, and their multi-billion dollar marketing efforts. That’s not to mention all the research and development, these things just don’t come cheap.

What really matters is the profit margins that Samsung is making for the handset. Think they are charging too much for the Galaxy S4? Just remember that the iPhone 5 costs around $207 with parts and manufacturing, and yet the two handsets sell for comparable subsidized prices.