Galaxy S5 bill of materials stands at $256, display the costliest component

The Galaxy S5, which went up for sale on April 11 and broke launch day sales records of its predecessor, costs about $256 to build, according to a teardown analysis by market research firm IHS. According to IHS, the cost of components (or bill of materials) on Samsung smartphones has been increasing in recent months – once holding around the $200 mark, the bill of materials is “inching up above $250 regularly.” On the Galaxy S5, which retails for an average of about $660, Samsung is practically making a profit of more than 60 percent.

When looking at individual components, the display was found to be the costliest at $63, followed by the memory chips (RAM and flash storage), which are supplied by Samsung itself and cost $33 in total. The fingerprint scanner, one of the most touted features of the device, apparently has a price tag of $4, which is considerably less than the $15 biometric chip found in the iPhone 5s. As for that biosensor, or heart rate monitor as we know it, the cost is a mere $1.45, which might explain why Samsung was able to put in a heart rate monitor on the flagship phone and its two new wearables as well.

Of course, the bill of materials doesn’t include things like research, labor, marketing and other such factors, but it’s still a good indication of how Samsung is taking home more and more profits with each new flagship, even if the company’s total profit margins might be taking a dive.

Via | Source

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3 years 10 days ago

Galaxy S4 is being actually sold in EU for 450$ and I don’t think Samsung is losing on it, I imagine actually a 20% company’s profit + 15% to resellers.
Cost of materials of the two devices it is supposed to be similar for S4. Indirect costs (personnel, software, patents, facilities, shipping, etc.) may be 30% of direct materials cost.
Fixing direct and indirect costs, only profits may change, being obviously higher for the new dreamed device.
So in my opinion this is the figure.
S4: Direct 250$ + Indirect 75$ + Samsung profit 65$ + Resellers profit 60$ = Selling 450$
S5: D 256$ + I 75$ (30%) + S 200$ (60%) + R 150$ (25%) = 660$
It’s just an exercise but I don’t find the 60% Samsung profit impossible at this stage. Price will go down as usual in few months when all people who don’t care the cost to get a new device will be over.

3 years 11 days ago

60% profit? Terrible article.

3 years 11 days ago

The phone is not only a hardware,and you do not bay only a parts.Also have a software,don’t forget.

3 years 11 days ago

I really dont know much about math but this article is ridiculous. If the cost to make the S5 is 256$ and they sell it for 660$ Samsung ends up with with a profit around the double of what it costed, in other words the profit is much more than 60 percent….

3 years 10 days ago

The $660 does not all go to Samsung, the retailer gets a good chunk of it as well, they aren’t selling Phones for charity they have their own bills and shareholders to keep happy.

On top of that as mentioned above you have Research and development cost, the cost of constructing the units, packaging, factoring costs of repairs, wages, licencing fees, marketing, distribution costs, and a bunch of other costs.

Also these prices Samsung pay for these componants might actually be less than the prices quoted above, they are buying millions of these units so can squeeze the suppliers to give them the best price possible.

3 years 11 days ago

Actually it’s very simple. 40% out of 660 is 264. This is the build cost. So the rest is profit: 60% out of 660. You calculate how much of the selling price is profit.

3 years 11 days ago

Ugh I really can’t stand people like you! Ignorance at its bets…

You know that this is only the material cost?! With your so called ‘profit’ Samsung (and every other company out there) has to pay following things:

-Payrolls -> Samsung Electronics (biggest subsidiary) has 427000 Employees right now!
-Transport costs
-Reasearch facilities and projects
-Patents and court trials ( *cough* *cough* *apple*)
-serveral other departements

If you count those off, you have are left with profit…

3 years 11 days ago

I guess you did not read my comment correcty. My comment was about the article itself that states the profit of Samsung was 60% when by their values it could never be. I only said that the Math in this article was wrong i NEVER said how much Samsung really had in profit.

So chill and think twice before call someone ignorant….

3 years 11 days ago

$660 is retail price, which isn’t what Samsung sells it for.

3 years 11 days ago

Oh, damn it!

Sincere apologies!

3 years 11 days ago

“doesn’t include things like research, labor, marketing and other such factors”