The Samsung Galaxy S5 is currently priced at around $660 when sold without a contract. For those planning on getting it via a carrier, it will cost around $200 and will require you to sign a contract with said carrier. That being said, exactly how much does it cost Samsung to build a single Galaxy S5 unit?
According to a teardown analysis by market research firm, IHS, they have estimated that the phone will cost around $256 to build. Naturally Samsung has declined to confirm IHS’ findings, with the report expected to be released later today.
While $256 doesn’t seem like much, especially when you consider how much the phone retails for, it’s actually an increase in price. According to Andrew Rassweiler, an analyst at IHS, he found that phones are getting more expensive to build. Previously it was estimated that phones sold around the $600 would cost $200 to make, but now prices are reportedly heading upwards of $250.
IHS also estimates that the most expensive component in the phone is its display, which costs around $63 per unit. However we should note that while the price of the components is factored into the retail price of the phone, there are other factors that are considered as well, such as costs to market the device, advertising budgets, licenses to use certain patents, and so on.
There is also a chance that Samsung’s cost of components could be lower than estimated, especially since they have relations with their component suppliers and could have gotten discounts if purchased in bulk, so the $256 price tag should only be used more as estimate if anything.