The Galaxy S5, which went up for sale on April 11 and broke launch day sales records of its predecessor, costs about $256 to build, according to a teardown analysis by market research firm IHS. According to IHS, the cost of components (or bill of materials) on Samsung smartphones has been increasing in recent months – once holding around the $200 mark, the bill of materials is “inching up above $250 regularly.” On the Galaxy S5, which retails for an average of about $660, Samsung is practically making a profit of more than 60 percent.
When looking at individual components, the display was found to be the costliest at $63, followed by the memory chips (RAM and flash storage), which are supplied by Samsung itself and cost $33 in total. The fingerprint scanner, one of the most touted features of the device, apparently has a price tag of $4, which is considerably less than the $15 biometric chip found in the iPhone 5s. As for that biosensor, or heart rate monitor as we know it, the cost is a mere $1.45, which might explain why Samsung was able to put in a heart rate monitor on the flagship phone and its two new wearables as well.
Of course, the bill of materials doesn't include things like research, labor, marketing and other such factors, but it's still a good indication of how Samsung is taking home more and more profits with each new flagship, even if the company's total profit margins might be taking a dive.
