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Samsungs Galaxy S5 Costs About $256 to Build
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Hilbert Hagedoorn
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Default Samsungs Galaxy S5 Costs About $256 to Build - 04-18-2014, 07:29 | posts: 21,103 | Location: Guru3D testlab

It is always funky to see what a device initiallyis costing to produce with the knowledge that you know what you pay for in the stores.The Galaxy S5, Samsung’s new flagship smartphone, c...

Samsungs Galaxy S5 Costs About $256 to Build
   
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scoter man1
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Default 04-18-2014, 08:26 | posts: 4,267 | Location: MI, USA

Wow, there's a pretty big profit margin on that.
   
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Default 04-18-2014, 08:45 | posts: 22

You should see Apple's, the iPhone 5 is estimated to be $199

EDIT: To Be fair though, as stated, it doesn't take into account marketing costs and R+D.

I feel that smartphones are getting harder to "put something new". So far the new phones (S5, HTC) don't bring anything new to the table.

Last edited by zzzaac; 04-18-2014 at 08:52.
   
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Default 04-18-2014, 08:59 | posts: 11,300 | Location: Finland

Working link: http://www.guru3d.com/news_story/sam..._to_build.html

256€ excluding R&D, marketing, costs not directly related to that product like keeping they phone division running and so... Like zzzaac said.

Still... As long as people find it worth the $600 price tag, it's not too expensive. In the end it's still a company which is trying to make profit and pay to people who have invested in the company.
   
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Default 04-18-2014, 09:37 | posts: 533

Why I bought an Xperia Z1 compact, only £360 (barely more than the Nexus 5) and it has all the specs of the £500-600 phones.
   
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Default 04-18-2014, 13:02 | posts: 17 | Location: New Jersey

Quote:
Originally Posted by Tat3 View Post
Still... As long as people find it worth the $600 price tag, it's not too expensive.
This is pretty much what it comes down to. The cost of individual components is not a good metric for understanding what a phone is worth. Factory retooling, R&D, marketing, paying employees to build it - all of these things chew into that 60% increased sale price. How much they make on each phone is probably marginal, seeing how much smartphone competition is out there.

Usually a company will take a hit on hardware sales in order to sell their software, which is crazy cheap to copy a few million times and distribute. iTunes alone would keep Apple afloat on billions in profit each year, for example.
   
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Default 04-18-2014, 13:09 | posts: 26,347 | Location: Hampshire UK

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Originally Posted by scoter man1 View Post
Wow, there's a pretty big profit margin on that.
not really. I thought they cost a lot less to make, I'm surprised Samsung isn't selling these for more.
   
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Default 04-18-2014, 13:10 | posts: 5,523 | Location: Switzerland

Quote:
Originally Posted by miffywiffy View Post
Why I bought an Xperia Z1 compact, only £360 (barely more than the Nexus 5) and it has all the specs of the £500-600 phones.
And imagine the chinese company out there, who now sell worldwide their 5" high end smartphone..

you have a 100$ smartphone with the exact same hardware of 600$ ones..

I dont say the quality is excellent, but this explain too why they are now in the top 5 of smartphones producers..

Quote:
Originally Posted by eclap View Post
not really. I thought they cost a lot less to make, I'm surprised Samsung isn't selling these for more.
Dont forget, in reality they use hardware they are producing, the cost indicate is the price Samsung is selling them to other company, not the price they are really cost them. ( nand, display, even the qualcomm processors are made in their fundries ).. The cost are anyway in other places, fundry, research and developpement of technology process etc.

Samsung is today the only complete vertical company..

Last edited by Lane; 04-18-2014 at 13:14.
   
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Default 04-18-2014, 14:40 | posts: 397 | Location: MA, USA

The profit margin on this isn't that high. There's more than just individual parts you have to pay for.

Also, as long as they have something to offer that (most) others don't, the higher premium is fair.

I'm not sure about Europe, but in the US you can often get nice phones like this for either (relatively) very cheap or even free, depending on your plan.
   
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Default 04-18-2014, 14:47 | posts: 7,125 | Location: Above Earth in a Big Rocket Ship

Quote:
Originally Posted by schmidtbag View Post
I'm not sure about Europe, but in the US you can often get nice phones like this for either (relatively) very cheap or even free, depending on your plan.
Well, that phone is definitely being payed for in the cost of the contract. It's the reason why my T-Mobile plan is $70 for unlimited everything but I payed full price for my phone and my sisters Verizon plan is $120 for unlimited talk/text but only 6GB of data, yet she only payed $100 for the "subsidized" LG G2.

You actually end up paying for more in that model anyway for less service. She payed $100 when it launched for $600 phone but she's paying $50 more a month. Essentially paying off the cost of the phone in 10 months but she signed a 2 year agreement for that cost. Oh and she only gets 6GB of data. So essentially she's paying $700 more to be on verizon with less data. The only advantage is network coverage. In NJ T-Mobile is generally fine everywhere, but go outside and T-Mobile is ****. Whether or not that functionality is worth $700 is up to the consumer I guess, I feel like it's not.

Last edited by Denial; 04-18-2014 at 14:52.
   
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eclap
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Default 04-18-2014, 15:02 | posts: 26,347 | Location: Hampshire UK

Quote:
Originally Posted by Lane View Post
Dont forget, in reality they use hardware they are producing, the cost indicate is the price Samsung is selling them to other company, not the price they are really cost them.

Samsung is today the only complete vertical company..
where in the article is that said?
   
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Default 04-18-2014, 15:04 | posts: 1,735 | Location: BBQ Capital of the World

Quote:
Originally Posted by zzzaac View Post
You should see Apple's, the iPhone 5 is estimated to be $199

EDIT: To Be fair though, as stated, it doesn't take into account marketing costs and R+D.

I feel that smartphones are getting harder to "put something new". So far the new phones (S5, HTC) don't bring anything new to the table.
that annoys me, "about 199$" they couldn't round up because 200 looks like such a fantastic number? what am i being sold a value meal?
   
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Default 04-18-2014, 15:37 | posts: 149 | Location: Portugal

This galaxy must cost 100$ if not less to samsung, the 256$ they are saying is just to make people believe that plus R/D, the selling price is not that high.
   
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Default 04-18-2014, 15:50 | posts: 7,125 | Location: Above Earth in a Big Rocket Ship

Quote:
Originally Posted by FerCam™ View Post
This galaxy must cost 100$ if not less to samsung, the 256$ they are saying is just to make people believe that plus R/D, the selling price is not that high.
wut.

When these type of breakdowns first got posted, literally the exact opposite was said. People were convinced that Samsung was making $400 on each phone. Hell just go read the reddit/r/android thread where this was posted. Almost 90% of the initial posts were people complaining about the cost of smartphones and that Samsung makes too much money.

Also if you actually had read the entire report (which is behind a paywall unfortunately) they show how they arrived at the total cost with actual sources. As oppose to just pulling a number like "$100 if not less" out of thin air.
   
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Default 04-18-2014, 16:16 | posts: 1

Yeah, 1000's of Samsung Employees, Utilities, Mortgage/Lease, Advertising, Patent Licensing is all free. No need to charge more than parts cost.

Geeeeze people
   
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---TK---
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Default 04-18-2014, 16:35 | posts: 18,523 | Location: New Jersey, USA

Don't really care about all that. Just wish I can upgrade more often with a new verizon contract. Currently on the note 2 for a whole year and 12 months more to go. Without paying full price on the phone. Maybe ill be able to jump on the note 4 next year. I'm not paying hundreds of dollars on a new cell phone.
   
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Default 04-18-2014, 16:44 | posts: 397 | Location: MA, USA

Quote:
Originally Posted by ---TK--- View Post
Don't really care about all that. Just wish I can upgrade more often with a new verizon contract. Currently on the note 2 for a whole year and 12 months more to go. Without paying full price on the phone. Maybe ill be able to jump on the note 4 next year. I'm not paying hundreds of dollars on a new cell phone.
oh boo-hoo. Poor thing, having to use an "old" phone for a year.

Some people really take availability of technology for granted.
   
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---TK---
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Default 04-18-2014, 16:55 | posts: 18,523 | Location: New Jersey, USA

Is that an attempt at a troll post or what? Its generally hard to tell from new members as they are in generally speaking wankers.
   
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schmidtbag
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Default 04-18-2014, 16:58 | posts: 397 | Location: MA, USA

Quote:
Originally Posted by ---TK--- View Post
Is that an attempt at a troll post or what? Its generally hard to tell from new members as they are in generally speaking wankers.
No, I just think you're being whiney and spoiled - a case of 1st world people problems.
   
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---TK---
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Default 04-18-2014, 17:03 | posts: 18,523 | Location: New Jersey, USA

Yep pegged you right in my previous post. Ill just skim past all your comments from now on. You do not seem to have any info knowledge insight experience etc that I may need anyways.
   
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Default 04-18-2014, 17:16 | posts: 3,997 | Location: Australia

The cost to build is $256, but then you have shipping costs, wholesaler costs, retailer costs, transportation between wholesaler and retailer, maybe importer costs, tax, and so on. If it costs you $600, Samsung certainly isn't getting a $344 profit. Not sure how much they're get, but it would only be a small fraction of that $344.

Apple would make much more money on their iPhones, since they are notorious for cheap labour, sub-par working conditions, and they control the supply chain from manufacturer to their stores. If they sell the iPhone for $600, they would be getting the bulk of that $400 difference.

Apple also pay little tax, notoriously so. It's way past the point of being disgusting.
   
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Default 04-18-2014, 17:34 | posts: 1,646 | Location: USA

Got this phone over the new HTC One (M8) mainly due to the weak camera HTC has. I am loving it. It has minor updates to it, but they (especially the amazing camera and being waterproof) can be noticed as you continue using the phone.
   
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Default 04-18-2014, 18:20 | posts: 14,812 | Location: Glasgow

While Apple clearly make more profit per phone, i don't think it's anywhere near like what people think.

Samsung are involved in just as much cheap labour as Apple is, and while their margins are not as high as Apple's they nothing more than a slightly less annoying version of Apple when it comes to profits and selling phones via marketing rather than anything real.

These days i'm more of an HTC fan, build quality and software is so much better on the One M8, i've even heard the camera seems to be better all round than the S5, not surprising as most of us know the megapixels amount is just there to sell cameras to people who know nothing about cameras, and only becomes important if you need to zoom or crop the image.

Last edited by Redemption80; 04-18-2014 at 18:37.
   
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Default 04-18-2014, 20:14 | posts: 7,490 | Location: GTA, Canada

Mine on a 2 year contract cost... $621.50 before $195 credit I had with my provider reducing it to $426.50. Of course they also wanted to charge an extra $25 "upgrade" fee, which I had them drop. Why? Because my contract doesn't cost $80 a month. That's pretty much how all of them here work. On an $80 a month contract for 2 year it'd be $282.50. $339 difference. But that's nearly $900 less per year for my contract.

Only reason I would pay such an insane price on a 2 year contract is because that phone number (of the 3 on the account) wasn't leaving that provider so signing up for the contract actually didn't make me lose anything. $426 ends up being less than then 32GB Nexus 5 I wanted which was marked as "In sock ships in 5 weeks".

I guess the moral of the story is that if you're in Canada prepare to be raped on phones and contract prices. Best part about all this is, I'm still waiting for my S5 to arrive even though it should have a week ago. According to their website I'm still #65 in line on the reserve list. Classy.

Oh and I really don't believe it costs $256. I'd be anything each unit ends up costing Samsung significantly less.

Last edited by Neo Cyrus; 04-18-2014 at 20:18.
   
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Default 04-18-2014, 21:29 | posts: 782

Quote:
Originally Posted by thatguy91 View Post
Apple also pay little tax, notoriously so. It's way past the point of being disgusting.
Oh don't worry, all our favorite tech firms do the same. Let's not single out Apple on that one.

http://www.forbes.com/sites/christop...-pay-in-taxes/
   
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