Ah, the cost of competition. Samsung’s recently unveiled Galaxy S4 may raise the bar for Apple, but it comes at a price. The new smartphone isn’t expected to launch until April, however we already know how much it cost the South Korean company to build its latest device: $244.
According to IHS Suppli, parts and manufacturing for a 16GB S4 not only cost more than the current Galaxy S3, but also seventeen percent higher than an iPhone 5 with sixteen gigabytes of storage. Seems Samsung is encountering the same financial challenges as Apple when it comes to ensuring your handset remains technologically in step with competitors…
Per usual, the estimate excludes costs associated with R&D, marketing, shipping, advertising, licensing fees and any other cost not directly associated with procuring and building components for the device.
Along with a record number of sensors, the higher build cost for the S4 is also due to “a larger, full-definition display and a beefed-up Samsung processor,” IHS senior analyst Vincent Leung told the Wall Street Journal in a written statement.
As we reported earlier this month, the S4 unveiled by Samsung in New York City includes a five-inch Super AMOLED display maxing out at the native full HD resolution of 1,920-by-1,080 pixels at a whopping 441ppi.
It also sports either an eight-core Samsung Exynos 5 or quad-core Qualcomm Snapdragon S4 Pro processor (depending on the territory), LTE support and eight built-in sensors, including a pedometer and IR and temperature sensors.
All enclosed in a case very similar to the Galaxy S3.
It will be available by end of April, but price points haven’t been disclosed yet.
In remarks which harken back to comments on Apple’s incremental hardware changes, one analyst described the S4 as “an evolutionary product rather than a revolutionary one.” Despite the lack of surprises, analyst Mark Newman with Sanford C. Bernstein said the new Galaxy smartphone will “raise the bar for upcoming products from its competitors.”
Samsung has not raised the bar, but the pace of mobile technology itself. Forbes contributor opines that the Galaaxy S4 launch could help Samsung “unseat Apple as king of innovation.”
As consumers increasingly use their mobile devices, demands on the hardware accelerate as well.
This includes a roomier display, compatibility with faster wireless networks for transmitting larger chunks of data, as well as beefier processors able to move that data around complex apps. Likewise, as hardware requirements ramp up, so will costs for the manufacturer.
We’ve seen this happen with Apple and the iPhone 5.
iPhone 5 bill of materials courtesy of IHS iSuppli.
All of which makes the eventual price tag for the S4 intriguing.
Will the price be higher than the iPhone 5, thus losing the audience of seeking a more inexpensive alternative to the iPhone that is still technologically equivalent?
Or perhaps the S4 will price-match its predecessor, thereby reducing profit margins and the ability to splurge on marketing and other brand awareness campaigns against Apple?
Yet, again, the two rivals are facing similar choices – ones that will only grow in difficulty as competitors seek emerging markets, such as India.