Inside Samsung Phone: Samsung Parts
By ARIK HESSELDAHL
Samsung Electronics Co .'s latest smartphone, the Galaxy S 4, takes advantage of the South Korean electronics company's chip- and display-manufacturing prowess to get its material costs closer toApple Inc .'s costs for the iPhone 5.
An analysis conducted by market-research firm IHS Inc. estimates Samsung's cost of materials and manufacturing to produce the U.S. version of the S 4 is slightly above $237 a unit, according to a report expected to be released on Thursday. That is higher than Apple's $217 production cost for a 32-gigabyte iPhone 5, which has a smaller and less-costly display screen.
Bloomberg News
A woman uses a Samsung Electronics Co. Galaxy S 4 smartphone to take a photograph.
Without a two-year contract, the 16-gigabyte version of the Samsung phone sells for $639 at AT&T Inc., and the iPhone 5 with 32 gigabytes costs $749 at an Apple store.
It has a bigger screen, higher-resolution camera, and good battery life, but Walt Mossberg tells us that the new Samsung Galaxy S 4 is "a good phone, not a great phone, and it's not a game-changer." (Photo: Samsung)
Pricing for an unlocked 32-gigabte S 4 hasn't been released.
Global Wireless Practice Executive Director Neil Mawston discusses features of Samsung's new S 4 smartphone and the phone's potential of being a solid competitor in the industry. Photo: Getty Images.
Most phone manufacturers buy components from many different suppliers. But Samsung, which builds everything from chips to displays, has used its production capabilities to produce many of the key components inside its S 4 phones.
"Samsung's strength is this ability to in-source to itself," IHS analyst Vincent Leung said in an interview. "They just keep adding to the list of components that they can supply to themselves."
One key component that Samsung didn't produce for its phone sold in the U.S., was the applications processor. U.S. versions of the phone contain a Snapdragon processor from Qualcomm Inc. that contributes $20 to the overall cost, IHS says.
Versions of the phone sold in Korea and other markets around the world use a Samsung-made chip called Exynos 5 Octa that costs $28 in place of the Qualcomm chip.Samsung manufactures at least four different variations of the phone around the world, including two being sold in the U.S., one to AT&T, and another to Verizon Wireless, said Andrew Rassweiler, another IHS analyst.
"Samsung is demonstrating its ability to suit the tastes of carriers in different regions of the world," Mr. Rassweiler said. "It comes down to what the market is willing to spend on the features offered."
The fact that Samsung used the Qualcomm-made chip is a testament to the U.S. chipmaker's prowess. "Even with all the vertical integration it is doing, it isn't like Samsung has given up on Qualcomm," Mr. Rassweiler said.
One interesting difference between the U.S. and Korean versions of the Galaxy S 4 is the imaging processor.
U.S. versions of the phone contain an image-processing chip made by Japan'sFujitsu Ltd. that added $1.50 to the total cost. IHS's Mr. Leung says in the Korean versions, some of the image processing is handed off to Samsung's Exynos chip.
Samsung also supplied the flash memory used to store data on the device.
IHS estimates that the phone's 16 gigabytes of memory added $28 to the material cost of the device.
The Korean company supplied its own display and touch-screen parts, which added $75 to the cost of components.
The combined display package also includes Gorilla Glass, a strong glass material made by U.S.-based Corning Inc.
The S 4's display is nearly an inch larger than Apple's iPhone 5, raising the Galaxy's material costs.
Samsung is also thought to have supplied itself with several unlabeled components, including the camera module and some wireless baseband chips.
A few non-Samsung suppliers includeBroadcom Corp., which provided Bluetooth and Wi-Fi chips, Maxim Integrated Products Inc ., which provided a power management chip, and Triquint Semiconductor Inc., which provided some wireless chips.
A version of this article appeared May 9, 2013, on page B6 in the U.S. edition of The Wall Street Journal, with the headline: Inside Samsung Phone: Samsung Parts.
No comments:
Post a Comment