Samsung Galaxy S5 costs $256 to build, $50 more than iPhone 5s

But the flagship device represents evolution not revolution with a conservative approach to design.
Written by Steve Ranger, Global News Director

The 32GB version of Samsung's latest flagship smartphone, the Galaxy S5, costs about $256 to build — a fair chunk more expensive than rival high-end devices, such as Apple's iPhone 5s.

According to calculations by analyst IHS Technology, at $207, the build cost for the 32GB iPhone 5s is around $50 cheaper than that of Samsung's S5.

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The S5's $256 price ticket (which includes $5 for manufacturing) contrasts even more sharply with cheap Android devices, such as the ZTE U793 and K-Touch T619+. The cost of components in both handsets came in at under $35, IHS Technology said.

The IHS cost calculations don't take into account software, licensing, royalty payments, or additional expenditures, which can bump up the total cost of the finished device, however.

The cost of components in Samsung's flagship Galaxy devices has been gradually increasing over the last few versions as the company crammed in more features: the cost of the components in the Galaxy S3 came in at $205 while the S4 cost $236.

Andrew Rassweiler, senior director of cost benchmarking services for IHS, said higher costs are becoming more typical of Samsung's flagship Galaxy line, adding that in the last year IHS has torn down four Galaxy devices with costs ranging from $237 to $280.

But despite the additional costs, Rassweiler said the S5 embodied a conservative, evolutionary design approach. "There are no revolutions or giant steps forward in this design. There's a lot of similarity and commonality between the S5 and other recent Samsung smartphones... However, there are many small changes throughout the design," he said.

Modified component selections in the S5 include the Qualcomm WTR1625 radio frequency transceiver: previous Galaxy products included the WTR1605L instead. The S5 also includes a new version of the NXP near-field communication controller that's different from the NXP PN5441, PN547, and PN65N devices found in other Samsung devices.

In one major departure from previous designs, the Galaxy S5 features 802.11ac wi-fi with multiple-input, multiple-output (Mimo) technology. Mimo uses multiple antennas to improve signal strength and overall wi-fi performance.

One of the biggest costs in the handset is its core processor, the Qualcomm MSM8974AC. IHS said this is a variant of the popular MSM8974 used in a number of mobile products ranging from the Nokia Lumia 1520 to the Galaxy Round, and LG Google Nexus 5. This chip alone costs $41, but combines the functionality of two formerly separate chips, the core applications processor and the wireless semiconductor. Adding in the cost of the memory bumps this cost up to $102. The cost of the screen — estimated at around $63 — is the second biggest cost.

IHS said the S5 represents the latest escalation of the sensor war, adding more such devices than IHS has found to date in a smartphone design. While a standard smartphone design will feature an accelerometer, gyroscope, and magnetometer, the S5 adds a barometric pressure sensor, as well as fingerprint and pulse sensors.

The handset will vary slightly by region: for example, the model dissected by IHS was sold in the South Korean market and included a television receiver, something unlikely to make it into models sold elsewhere.

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