On March 14, Samsung finally announced the specification of its one of the most hyped smartphones–the Galaxy S4. Of course, the specification, incorporated hardware and software, of Samsung Galaxy S4 differentiates it from other existing Android smartphones. But more importantly, the South Korean company hasn’t yet announced what would be the price of the device.
As per recent estimations from IHS iSuppli, the bill of material (BOM) cost of Samsung Galaxy S4 is about $236 for its HSPA+ model. However, the BOM cost involved in the Galaxy S III was $205 only, a $31 less than the Galaxy S4. The use of upgraded components in Galaxy S4 smartphone has boosted the price of the device. The BOD cost of Samsung Galaxy S4 is even more than the metal-clad iPhone 5. Apparently, a beefed up processor, 5-inch 1080p HD display screen and a wealth of new sensors have set a record high price for Samsung Galaxy S4 smartphone. Indeed, the 5-inch 1080p HD screen in the Galaxy S4 accounts for a whopping $75, up by $10 compare to the Galaxy S3 screen.
However, at present, number of brands such as HTC One, LG Optimus G Pro and more are also having 1080p HD display. But the Samsung Galaxy S4 is ahead of other smartphones (except HTC One) in terms of pixel density; the Galaxy S4 features a pixel density of 441 PPI. Interestingly, Samsung has implemented new technologies for enhancing the performance of AMOLED display in the Galaxy S4, driving the display cost of the device.
As Samsung used quad-core processor in the latest Galaxy s lineup smartphone, the price of the device was already expected to be higher compare to its siblings. The quad-core processor used in the Galaxy S3 costs just $17.50, while the eight core chip in Samsung Galaxy S4 holds a cost of $30. It should be understood that Samsung’s home-made processor is dramatically costlier than the Qualcomm’s Snapdragon 600 quad-core chip.
Despite making screen, on-board storage components and processor, Samsung has made only 63% of components used in the Galaxy S4. More importantly, the remaining 37% of components are being manufactured by Intel, Qualcomm, Broadcom and others.
One thing you need to understand that the cost of the HSPA+ version of Samsung Galaxy S4 is $3 more than that of its 4G LTE version. In addition, an increasing number of sensors in the Galaxy S4 smartphone has also pushed the price of the device; the sensor array in the Galaxy S3 totaled about $12.70, while UI & sensors involved in the Galaxy S4 totaled $16. Once upon a time, the South Korean mobile handset maker was the biggest component supplier to Apple’s iPhones.
In comparison, the total BOD cost of Apple’s 16-GB and 64 GB versions of iPhone 5 are just $207 and $238 respectively. It’s true that Apple is still making highest profit (almost 40%) on its iPhones compare to other smartphone vendors. If we consider that Samsung would sell the Galaxy S4 at 18% profit margin, then the HSPA+ version of the device would cost $288, while 4G LTE version will cost $285. However, Samsung Galaxy S4 would be sold in the U.S between $199 and $399, depending on contract periods offered by carriers.