IHS Insight Perspective
This phone is an entry-level LTE phone from Samsung, and in the US sells on MetroPCS - a carrier that sells the device with no contract for ~$250 USD. Samsung has a horse in every race when it comes to smartphones - whether it's the top of the line, the bottom of the line, Windows Phone, Android, etc. If there's a market for it, Samsung makes it - and ultimately is positioned to win no matter what works in the market. As previously was the case with Nokia, Samsung has the breadth of product line to easily make a few tweaks to a design or leverage massive buying power and build new phones from old building blocks used across platforms. Such is the case here - and the design looks a little tired - it's composed of building blocks that we have been seeing in Samsung designs for up to 3 years in some cases. But this is how you make a cheap LTE phone that a carrier like MetroPCS needs. Remember that the total cost from Samsung, once sold to MetroPCS and other carriers is significantly higher than our basic BOM plus manufacturing cost basis, which explains to some extent why MetroPCS have suffered on the profitability front since introducing LTE phones.
The Samsung Galaxy Attain is a 3.5 diagonal, smartphone running Android 2.3.6 (Gingerbread), with LTE connectivity. The Galaxy Attain features the least expensive (but still market palatable) combination of features while still achieving LTE functionality. Most other features on this phone we consider a compromise in order to maintain the key LTE function. The camera module combination is only 3MP with a 1.3MP secondary, and the combo function (WiFi + BT) is only Bluetooth V2.1 (to leverage the legacy BCM4329 chip), etc. The core of the device is the Samsung-designed 'Hummingbird' processor (S5PC110xxx) which has been around several years now, and operates at 1GHz.
This phone is still what we would consider a first generation LTE design. Samsung bring their own chip, the CMC22000 to the party, which is a Samsung-designed discrete solution which is a bolt-on 4G chip won top of the legacy (and it's really legacy - because we have seen this chip since 2009 in Samsung designs) Qualcomm QSC6075 baseband IC. Though costs erode over time, we are starting to already see better integrated 2nd generation LTE solutions in other phones. First generation LTE designs have a distinct cost and complexity disadvantage because the whole LTE feature set is 'additive' to legacy 3G chipsets. It adds cost and there is no integration advantage that we already see in 2nd gen LTE designs. Make no mistake - 2nd gen is still pricey, but stands a better chance ultimately of providing lower total cost solutions. But the 2nd gen chips also pack in a lot of features that would be superfluous in the goal of making the phone low cost, and hence Samsung just employ a set of chips they have been making or buying for years and should have very competitive pricing on.
All the other design choices were made primarily to maintain lowest possible costs.
Prepaid wireless LTE
As mentioned above - the key feature here is LTE - but the phone is designed for a prepaid market. Since the prepaid wireless market is typically at a lower cost and price point, this makes for a challenging sell for MetroPCS. For the time being, MetroPCS are likely the only carrier buying this phone.
Pricing and Availability
MetroPCS currently offers the Samsung Galaxy Attain for $249 USD at the time of writing (May 2012) with no contract.
Availability - MetroPCS in USA for time being, likely is the only customer for this specific configuration.
700,000 Total Units
1 Total Years
For the purposes of this teardown analysis, we have assumed an Annual Production Volume of 700000 units and a Product Lifetime Volume of 1 year(s).
Teardown volume and production assumptions are primarily used for our cost analysis in terms of amortized NRE and tooling costs, especially for custom components specific to the model being analyzed (mechanical components especially). Unless assumed volumes are different by an order of magnitude, minor changes in volume (say 1 million vs. 2) rarely have a large net effect on our final analysis because of this.
Per IHS iSuppli's 'Smartphones & Converged Devices Q4 Market Tracker': Smartphones are becoming the defining product that drives sales for handset OEMs, especially as entry-level and feature-phones fall by the wayside. In 2011, smart phones accounted for 33% of the 1.5 billion legal handsets sold; and by 2015 smartphones will grow to 60% of the total market. The future of the wireless handset industry will be shaped by trends in the smartphone segment.
Per IHS iSuppli's Design Forecast Tool: The total market share for smartphones will be 1,532 billion in 2012, and Samsung will contribute 357 million towards the market in the same year. The number of LTE smartphones increases significantly from 2011 to 2012 and will jump double from 2014 to 2015. Samsung will ship 20 million out of 60 million LTE phone units in 2012. This represents about 33% of the estimated 2012 total LTE handset shipments.
LTE Phones can have pricey BOM, not just because 1st generation LTE solutions were totally additive and glued on to the normal legacy 3G chipsets. It was like paying for two complete wireless sections. This particular model is about as cheap as can be made for LTE, and is the result of a series of low-spec choices that keep the costs down. However we know Samsung gets very good pricing and have applied that knowledge in this analysis.
Total BOM: $136.94
Top Cost Drivers below: $79.14
% of Total BOM 58%
Main Cost Drivers below
Display Module - 3.5' Diagonal, 256K Color TFT, 320 x 480 Pixels, w/ Integral Flex PCBs- (Qty: 1)
Samsung Semiconductor CMC22000 Baseband Processor - LTE- (Qty: 1)
Qualcomm QSC6075 Baseband Processor / RF Transceiver - CDMA2000 1xEV-DO Rev. 0 , 800/1900/AWS, 192MHz ARM926EJS Core Processor, & 96MHz QDSP, gpsOne, 65nm, w/ Integrated Power Management IC- (Qty: 1)
Touchscreen - Capacitive, 3.5' Diagonal, Glass Overlay, Painted, Printed, w/ Integral Flex PCB- (Qty: 1)
Samsung Semiconductor S5PC110A01 Application Processor - 1GHz, ARM Cortex A8 Core, 45nm, PoP- (Qty: 1)
Samsung Semiconductor KB100D011B-A459 MCP - 4Gb OneNAND Flash + 3Gb Mobile DDR, PoP- (Qty: 1)
Primary Camera Module - 3.15MP, FSI CMOS, 1/5' Format, Auto Focus Lens- (Qty: 1)
EB524759VA Battery - Li-Ion, 3.7V, 1650mAh, 6.11Wh, w/ Water Contact Indicator- (Qty: 1)
Samsung Electro-Mechanics 10-Layer - FR4/RCF HDI, 1+8+1, Lead-Free, Halogen-Free- (Qty: 1)
Silicon Motion FC7852 RF Transceiver - Dual Band, LTE AWS / 1900- (Qty: 1)
Not Included in Analysis
The total materials and manufacturing costs reported in this analysis reflect ONLY the direct materials cost (from component vendors and assorted EMS providers), AND manufacturing with basic test. Not included in this analysis are costs above and beyond the material manufacture of the core device itself - cost of intellectual property, royalties and licensing fees (those not already included into the per component price), software, software loading and test, shipping, logistics marketing and other channel costs including not only EMS provider and the OEM's margin, but that of other resellers. Our cost analysis is meant to focus on those costs incurred in the manufacture of the core device and exceptionally in some circumstances the packaging and literature as well.
We do provide an Excel tab 'Overall Costs' where a user can enter their known pre and post production costs to build a per unit cost reflective of theirs actual expenditures. In time we are developing the expertise to produce a complete set of figures for overall costs.
Per IHS iSuppli's Global OEM Manufacturing & Design (GOMDA?) Q1 2012 - Wireless Handset report: Samsung outsourced only 3.6% of its handset production in 2011, and 96.4% is in-house volume. Its manufacturing partners are BYD and Kaifa, and their outsourced volume is respectively 2.4% and 1.2%.
The GOMDA also shows that Samsung's market share in wireless handset recorded 22.3% which ranks the second highest after Nokia with 27.4% in 2011. This phone is most likely, like the majority of Samsung phones, built in-house by Samsung.
Country of Origin
For the purposes of this analysis, we are assuming the following country(ies) of origin for each level of assembly, based on a combination of 'Made In' markings, and/or assumptions based on our knowledge of such equipment.
Box Contents - China
Camera Assembly - China
Display / Touchscreen - China
Main PCB - China
Misc PCB Assemblies - China
Other - Enclosures / Final Assembly - China
Country of origin assumptions relate directly to the associated cost of manufacturing, where calculated by iSuppli. In the cases of 'finished' sub-assemblies (such as display modules), we do not calculate internal manufacturing costs, but rather assess the market price of the finished product in which case country of origin assumptions may or may not have a direct effect on pricing.
Labor rates are applied directly only to hand inserted components and systems in our bill of materials, and although regional assumptions do, these new rates do not have a direct effect on our modeled calculations of placement costs for automated SMD assembly lines. ?Auto" inserted components (such as SMT components) placement costs are calculated by an iSuppli algorithm which allocates a cost per component based on the size and pincount of the device. This calculation is affected by country or region of origin as well.
Component counts by assembly and the number of assembly are indicators of design complexity and efficiency.
Component Qty: 926 - Main PCB
Component Qty: 35 - Display / Touchscreen
Component Qty: 23 - Box Contents
Component Qty: 51 - Camera Assembly
Component Qty: 58 - Other - Enclosures / Final Assembly
Component Qty: 15 - Misc PCB Assemblies
Component Qty: 1108 - Grand Total
The Samsung Galaxy Attain has a total of 1085 components excluding box contents. As 900~1100 is considered to be an average component count for smartphones such as the HTC Sensation, this Galaxy Attain is right at the high end of 'average'. The higher count is the result primarily of LTE functionality.
Component counts have a direct bearing on the overall manufacturing cycle times and costs, and also can increase or decrease overall yields and re-work. Our calculations of manufacturing costs factor counts and more qualitative complexities in the design. The cost of manufacturing is also, to some extent, decreased in this case because of assumed labor rate applied for China.
Note that manual labor has a much smaller effect on auto-insertion assembly lines (for the Main PCB, for example), where manufacturing costs are much more capital equipment intensive and driven by these investment costs.
This phone features components seen for years in many different Samsung (and other brand) phones. The core is the (now older) Samsung Hummingbird processor: (1GHz, ARM Cortex A8 Core, 45nm, PoP). The wireless section is dominated by the Samsung LTE processor (CMC22000 - also which we have seen for several years now), and a basic Qualcomm QSC6075 baseband to cover basic CDMA/EvDO wireless functionality. The RF transceiver is from Silicon Motion. Most of the chip choices are at least 2 to 3 years old, and are being employed to maintain a low total cost.