Samsung's latest smartphone costs more for the Korean company to make than last year's model, which might affect pricing.
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The Galaxy S 4 costs Samsung about $236 to manufacture for the HSPA+ model, IHS iSuppli estimates. The company's teardown of the Galaxy S 4 reveals upgraded components and some interesting choices that make the device more costly to make than both the Galaxy S 3 and metal-clad iPhone 5.
"Among the upgrades are a larger, full high-definition display; a beefed-up Samsung processor; and a wealth of new sensors that set a record high for the number of such devices in a smartphone design," said IHS senior analyst Vincent Leung in a statement.
The Galaxy S 4's 5-inch 1080p HD screen accounts for a whopping $75 of the device's cost, versus the Galaxy S 3's screen, which cost $65. IHS iSuppli notes that the Galaxy S 4's screen gave the company some trouble.
"While many brands have released smartphone models using full-HD LCD displays, the S 4 represents the first with an AMOLED display at this resolution," said Vinita Jakhanwal, director for small and medium displays at IHS. One example is the recently announced HTC One, which has a 5-inch 1080p LCD screen. LG also uses LCDs for its smartphones, such as the Optimus G Pro, which has a 5.5-inch 1080p HD display.
"Reaching a true pixel density greater than 300 ppi has been a challenge for AMOLED display makers," continued Jakhanwal. "However, Samsung was able to enhance AMOLED display performance by implementing new technologies that also drove up the cost of the display." The Galaxy S 4's screen has 441 pixels per inch, putting it far ahead of Apple's Retina display in pixel density.
The new processor in Samsung's anticipated Android smartphone is another component that helped swell the bill of materials. The four-core engine in the Galaxy S 3 cost Samsung $17.50, but the eight-core chip in the Galaxy S 4 costs $30. Both are Exynos-branded processors made by Samsung. Samsung's home-made processor is dramatically more expensive than Qualcomm's Snapdragon chip, which costs only $20.
The interesting twist here is that the HSPA+ version of the Galaxy S 4, which is what will be sold in markets outside the U.S., costs $1 more to make than the LTE 4G version. The HSPA+ radio costs Samsung $16, but it is paired with Samsung's $30 processor for a combined radio-processor cost of $46. The LTE radio costs $25, but it is paired with Qualcomm's $20 processor for a total radio-processor cost of $45.
Sensors represent another area where Samsung's costs increased. The Galaxy S 3's sensor array totaled about $12.70 per device. The Galaxy S 4, however, adds temperature and humidity sensors, which boost the overall sensor package cost to $16.
Despite making the screen, processor and on-board storage components, Samsung parts represent only about 63% of each Galaxy S 4. The remaining 37% of components come from companies such as Intel, Broadcom, Qualcomm and others.
By comparison, the 16-GB Apple iPhone 5 costs Apple $207 to manufacture. The 64-GB version costs Apple $238.
Samsung and its carrier partners have not provided pricing information for the Galaxy S 4 yet. However, the device will likely sell in the U.S. between $199 and $399, depending on the storage configuration.
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