The Galaxy S4 Costs Samsung How Much to Build?

The good folks at IHS iSuppli have, through the company's Mobile Handset Cost Model Service, pulled together their anticipated virtual preliminary teardown of the Samsung Galaxy S4 and have built out their estimates for the number of dollars it costs the company to build the new device. Regardless of its very obvious similarity of appearance to the Galaxy S III, and though the new S4 doesn't represent any particularly huge leap over the S III, it turns out that the parts collection inside the new phone carries a bill of materials (BOM) cost that is in fact a good bit higher than its predecessor.

We can expect a full teardown report in short order from IHS iSuppli, but historically, the preliminary estimates tend to be close to reality. In any case, the chart below points to the areas where iSuppli can't be completely sure of the actual parts used - but as we've noted we can expect the reality will come very close to the preliminary estimate. Pricing estimates were derived from information and device specifications released by Samsung, along with information regarding known components and suppliers.

As the chart makes clear, there are an interesting number of different parts between the HSPA+ version that will ship in Europe, Asia and elsewhere, and the LTE version we can expect to see here in the United States. Exclusive of an estimated general manufacturing cost of $8.50 for both versions, the HSPA+ version of the S4, with the base memory configuration of 2 GB of RAM and 16 GB of storage, is the more expensive version of the new device, with a BOM of $235.60.

That is a significant $30.40 more than the actual (non-preliminary) cost of the HSPA+ version of the S III. The S III has the same base 16 GB of main storage but only 1 GB of RAM. With the $8.5 manufacturing costs included, we reach $244.10 for the S4, as compared to the S III's $8 manufacturing costs that bring its total costs up to $213.20 (for a total difference of $30.90 per device).

As expected, the LTE version (with the same base 2 GB of RAM and 16 GB of storage) that we'll see in the United States has wireless component costs $9 more expensive that the HSPA+ version. However, and this is a big "but" - the U.S. version of the S4 will not be delivered with the Samsung Exynos 5 Octa eight-core processor many of us had anticipated, but will ship with the less state of the art Qualcomm Snapdragon four-core 600 running at 1.9 GHz (as an aside the new HTC One also sports the 600, but clocked at 1.7 GHz). There is a $10 price differential between the two processors, with the Exynos 5 costing $30 to the Snapdragon's $20 cost.

It is not clear if Samsung chose the Snapdragon rather than its own Exynos 5 for the U.S. market simply to offset the higher LTE cost. Given that the differentials are neatly and nearly equal it appears that is the case, though we haven't heard this directly from Samsung.

Major upgrades for the S4 include the display, sensors and the application processors. The S4 uses a full-HD active-matrix organic light-emitting diode (AMOLED) display from Samsung Display, along with Gorilla Glass 3. The pixel count, as we now know for certain is 1,920 x 1,080, along with a substantial pixel density of 441 ppi for its 4.99 inch size. This compares to the S III's 1,280 by 720 WXGA display resolution and the use of Gorilla Glass 2. It is a worthy achievement for Samsung to get its AMOLED displays up to 441 ppi - it can be considered a technical breakthrough for AMOLED displays. The S4’s HD display and touch-screen subsystem is estimated to carry a cost of $75.00, which adds $10.00 to total display cost over the S III.

It is worth noting for comparison purposes that the HTC One's 4.7-inch LCD display is also 1,920 x 1,080 pixels, but its 4.7-inch display ends up packing in 468 ppi - a beautiful display indeed. Meanwhile, the iPhone 5's 4-inch LCD display - yes, the "retina" display - offers only 1,136 x 640 pixels, along with 326 ppi.

It is true that Apple no longer rules the roost on the display front in terms of ppi count. This begs the question though: if, as Apple claims, 326 ppi means you can no longer see the actual pixels and they deliver an image that to the eye appears continuous, does adding more pixels - let's use the HTC One's 468 ppi - matter? We're not sure how to answer this one - we welcome thoughts from our readers, but to deliver true HD you need to deliver 1,920 x 1,080, and Apple doesn't.

Different Processors

As noted earlier, the HSPA+ version of the Galaxy S4, Samsung uses its own Exynos 5 Octa eight-core processor, which in turn is manufactured with Samsung’s own 28-nanometer process and estimated to cost $30. This is a hefty $12.50 increase over the S III's quad-core Exynos 4 processor, which costs $17.50.

IHS iSuppli notes that the Exynos 5 Octa uses ARM’s big.LITTLE microprocessor architecture, which employs a hybrid approach generally referred to as heterogeneous computing. This refers to a technique where two CPUs, a quad-core Cortex-A15 CPU and a quad-core Cortex-A7 CPU, are integrated into the same chip. This is a unique approach compared to Nvidia's 4+1 Tegra setup or even Qualcomm's asynchronous Krait-cores in the Snapdragon, where the processing cores are evenly matched.

Wayne Lam, senior analyst for wireless communications at IHS notes that, “With big.LITTLE, there is a computing and power consumption tradeoff, in which less computing-intensive tasks, such as phone calls and social media apps, can be handled by the more power-efficient but slower A7 cores. This allows the bigger, more powerful and energy-draining A15 cores to remain idle when they are not needed, preserving battery life. The A15 cores go into action only for more computing-intensive applications, like video gaming or decoding video.”

As we also noted earlier, the LTE version of the Galaxy S4 uses the Qualcomm Snapdragon 600. Samsung has a similar hardware differentiation with the LTE version of the Galaxy S III (which is not shown in the chart above). There will likely be some differences in terms of performance and battery life between the two versions.

A Sensor a Day Keeps the Doctor Away

As Samsung made clear during the S4's unveiling last Thursday, the S4 is packed with sensors, some of which will be used with its new S Health application. These include the accelerometer, RGB light, geomagnetic, proximity, gyroscope, barometer, IR gesture, and temperature and humidity sensors.

The humidity and temperature sensors, along with the IR gesture sensor, are new and in large part are responsible for adding an estimated $3.30 to the cost of the S4 compared to the S III.

As is the case with its other devices, Samsung makes extensive use of its own internally manufactured parts in all of its phones, and the Galaxy S4 is certainly no different. IHS iSuppli notes that Intel is believed to be the supplier of the baseband processor and RF transceiver in the HSPA+ version of the Galaxy S4, just as it is for the Galaxy S III. Broadcom is the likely source for the Wireless LAN/Bluetooth/FM/GPS subsystem and the GPS/GLONASS section in the non-Qualcomm variant of the Galaxy S4.

Those components aside, Samsung supplies the display and touchscreen module, as well as the processor and power management integrated circuit. Samsung also is the primary supplier of the SDRAM and flash memory, although the company can certainly also use alternative sources for these commodity parts.

Altogether iSuppli estimates that Samsung accounts for at least $149 worth of component content in the HSPA+ version of the Galaxy S4, which nets out to 63 percent of the total BOM, at least as far as the results of the virtual teardown lead iSuppli to believe. Once the company does a full physical teardown we'll know more, but we suspect the reality will very closely mirror the estimates here.

So, given all of the above, has Samsung truly delivered on something with show-stopping innovation? Hardly. As we noted last week in our report of the official unveiling, it is an entirely derivative hardware exercise. Yes, there are those apps Samsung has tossed into the game, but the hardware device itself isn't anything special, as the iSuppli virtual teardown - we believe - amply demonstrates.