As with every new device, the new Samsung Galaxy S5 received it obligatory ‘teardown analysis’ by market research firm IHS, which they will be publishing later today. They have determined that the Galaxy S5 costs Samsung about $256 to build – giving them about a 60 percent gross margin on the S5, which is selling for about $660 without a contract and $200 on a two-year deal.
Andrew Rassweiler, IHS’ head of the teardown research claims that this is getting more typical – in the past a flagship device was costing about $200 in materials, but have since started “inching up above $250 regularly.” Although Samsung’s flagship device, Rassweiler claims that other than the ability to withstand the water/dust, he does not find anything ‘extraordinary’ about the phone – although I am not sure what he was expecting to see. He said:
“Inside we see mostly a lot of recycled components that we’ve seen before. There’s really nothing special inside where Samsung is pushing the envelope. There’s no breakthroughs, there’s nothing earth-shattering. It’s really just a continuation of what has come before.”
Rassweiler says a couple of things that might be questioned by other authorities concerning the display and processor. He said the most expensive component at $63 is the display – no surprises there – but then he goes on to say that it is a “5-inch display and one which Samsung has used before.” This goes against what display experts, DisplayMate said in their review of the Galaxy S5 display – “The Galaxy S5 has the latest evolution of Samsung OLED displays…Galaxy S5 display is a major improvement.” This would lead us to believe it is not the same display Samsung has used before, but an improved design over previous renditions.
In the Snapdragon 800 line of processors, there were three models – MSM8974 (base 800 model), MSM8974AB (also 800 model only overclocked and being called an 801), and the MSM8974AC (the actual 801 model) – and while it is true there are not much differences in the speed of the processors, it would be an error to say that they have seen the (Snapdragon 801) in a “plethora of phones.” The LG G2, the HTC One M8, and the Sony Xperia Z2 all use the MSM8974AB models chip – the Samsung Galaxy S5 uses the MSM8974AC, or the true Snapdragon 801 processor.
The DRAM and flash memory are Samsung built memory chips and total up to about $33. The fingerprint scanner cost about $4 but they were unable to determine which company made the part, and Re/code’s Walt Mossberg said it often failed for him in his tests. The iPhone’s fingerprint sensor costs about $15 according to IHS’s teardown of that device last year. The Galaxy 5S also contains the usual accelerometer, a gyroscope and a compass, but also throws in a $1.45 biosensor, by chipmaker, Maxim, for measuring personal health data. Maxim also supplies the power management chips that were previously supplied by Qualcomm and could be the reason for the new Galaxy S5’s outstanding battery life using its new PowerXtend suite.