IHS Insight Perspective
Apple dominates the tablet market to date. iPad still "is" the tablet market and accounted for somewhere between 60 to 70% of tablet shipments in 2011. Samsung may be important amongst the "other" suppliers, but by no means a close second at a mere 5 - 10% of the 2011 market. However, Samsung are the only other serious player in the segment with the second largest share. Samsung tablets have the advantage of huge internal breadth of supply, especially as the supplier of the key "SuperAMOLED" technology from Samsung (different from generic AMOLED) in that it integrates "on cell" touch technology that helps decrease overall thickness, and should ultimately be more cost effective. Samsung is clearly a competent hardware manufacturer, but unlike with their smartphone products, they have not overtaken Apple by any means in volumes shipments in the tablet segment yet. Cracking Apple's product desirability code is an elusive goal for all competitors.
The Galaxy Tab serves two purposes - to offer a smaller alternative to the Galaxy 10.1" tab at a lower price point, but it is also probably a strategic preemptive move to be in a market niche that Apple is widely rumored to be looking at attacking with a ~7" version of the iPad expected later in 2012. Two versions (3G and 4G) exist for different markets. This one being torn down is an LTE model from Verizon in the US.
Galaxy Tab 7.7 is the 5th Galaxy Tab that Samsung has produced and is the thinnest and lightest of the series while maintaining high battery capacity and featuring LTE wireless connectivity. It is the first sub 8" diagonal Galaxy Tab to feature 1280x800 resolution, and has the fastest processor to date (1.4GHz with 8Gbits (1GB) of DRAM on top). It weighs in at 335grams and less than 8mm thick, with the usual stable of expected features beyond the SuperAMOLED HD resolution display which includes full 802.11 ab/g/n, Bluetooth, and a 3MP rear camera complemented by a 2MP front facing camera module.
The Galaxy Tab 7.7 is the first application for an HD ~7" format SuperAMOLED display for Samsung. The Tab 7.7 also has the fastest Exynos processor (4210) applied to date in Galaxy Tab products, and also features the latest amount of DRAM (8Gbits/1GB) to support it. Most of the choices of parts and vendors are unsurprising and are recycled from other Samsung Galaxy products. See the design notes section for details.
Tablets have become a popular consumer item and most designs, such as this are aimed at the mass market. Furthermore, the smaller size is typically an attempt to offer a lower entry point for consumers, though many may simply find the smaller format more portable and therefore pragmatic.
Initially unveiled at IFA 2011 (Conference).
Pricing and Availability
$699.99 Full retail
Currently in the US - Verizon carries the Galaxy Tab 7.7 LTE for a "full retail price" of $699.99 and a two-year contract subsidized price of $449.99. There is a WiFi version of the product that retails for less. There is also a global (3G) version that retails for $649 USD.
This particular version we are tearing down is for Verizon, however there is a global version of the Tab 7.7 which offers HSPA+ connectivity.
5,000,000 Total Units
2 Total Years
For the purposes of this teardown analysis, we have assumed an Annual Production Volume of 5000000 units and a Product Lifetime Volume of 1.5 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.
• Tablets represent one of the strongest growth categories in consumer electronics through 2016.
• Overall tablet sales increased 253% year-over-year (YoY) in 2011 and are expected to increase 85% in 2012.
• Media tablet growth has been more dramatic, increasing 277.3% YoY in 2011. Projected 2012 media tablet YoY growth is 86.9%.
• PC tablet growth in the early years of the forecast has been more modest, increasing 26% YoY in 2011. Growth in 2012, aided by the introduction of Windows 8 and new Ultra light tablet offerings, is expected to be stronger at 33% YoY.
• PC tablet growth is expected to accelerate in 2013 and beyond, as more versatile, affordable models enter the market and touch becomes more prevalent.
Samsung are the world's most vertically integrated electronic system manufacturer. They have enormous breadth industrially and can supply the majority of the "value" components in tablets and smartphones, starting most obviously with the display and touchscreen, but also core applications processor, memory, etc. You will note also from our display and touchscreen analysis, that the internal transfer prices offer little margin between divisions for such applications.
Total BOM: $298.00
Top Cost Drivers below: $224.82
% of Total BOM 75%
Main Cost Drivers below
- $120 - Samsung Mobile Display AMS767KC01 Display / Touchscreen - 7.7" Diagonal Super AMOLED, 16M Color AMOLED, 1280 x 800 Pixels, 129um x 129um Pixel Size, 165.12mm x 103.2mm Viewable Area, Contains Atmel ATMXT768E Touchscreen Controller- (Qty: 1)
- $18 - Samsung Semiconductor KLMAG4FEJA-A003 Flash - eMMC NAND, 16GB, MLC- (Qty: 1)
- $16.25 - Samsung Semiconductor K3PE7E700B-XXC1 SDRAM - Mobile DDR2, 1GB, PoP- (Qty: 1)
- $14.2 - Samsung SDI SP397281A(1S2P) Battery Pack - Li-Polymer, 2-Cell, 3.7V, 5100mAh- (Qty: 1)
- $13.88 - Samsung Semiconductor S5PC210B01 Applications Processor - Exynos 4210, Dual-Core, 1.4GHz, ARM Cortex-A9, 45nm, PoP- (Qty: 1)
- $12.11 - Samsung Semiconductor CMC22000 Baseband Processor - LTE- (Qty: 1)
- $10.6 - 10-Layer - FR4/RCF HDI, 3+4+3, Lead-Free- (Qty: 1)
- $8.78 - VIA Telecom CBP7.1C Baseband Processor - CDMA2000 1X / EVDO REV A- (Qty: 1)
- $5.7 - Primary Camera Module - 3.15MP, FSI CMOS, 1/5" Format, Auto Focus Lens- (Qty: 1)
- $5.3 - Enclosure, Main, Top - Die-Cast Magnesium Alloy, Painted, w/ Injection Molded PPA Frame, w/ FIP Gasket- (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.
Per IHS iSuppli's Global OEM Manufacturing & Design Analysis (GOMDA) Q3 2011 Tablet PC report - Samsung produce 100% of tablet product in-house. This is not unusual and the vast majority of smartphones produced by Samsung are also manufactured in house. Furthermore, per labeling, this product is made in South Korea.
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.
Battery - Korea, South
Box Contents - Korea, South
Camera Assembly - Korea, South
Display / Touchscreen - Korea, South
Main PCB - Korea, South
Misc PCB Assemblies - Korea, South
Other - Enclosures / Final Assembly - Korea, South
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 combo 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: 1170 - Main PCB
Component Qty: 57 - Display / Touchscreen
Component Qty: 92 - Other - Enclosures / Final Assembly
Component Qty: 3 - Battery
Component Qty: 52 - Camera Assembly
Component Qty: 15 - Box Contents
Component Qty: 62 - Misc PCB Assemblies
Component Qty: 1451 - Grand Total
Tablets tend to have component counts in the 1200 - 1600 component range (vs., for example, smartphones in the 900 - 1200 component range). But whether smartphone or tablet, component counts in all LTE devices we have seen are elevated by a few hundred. In this respect, the Galaxy tab 7.7 count of 1436 (not including box contents) seems very in line with other tablets having similar feature sets.
Every tablet design is dominated, and costs are "swamped" by the choice of display and touchscreen technology. The Galaxy Tab 7.7 is the first application of a 7.7" format HD resolution Super AMOLED display, and as such is designed to showcase Samsung's own in-house know-how.
For core silicon, not surprisingly, Samsung have applied their own "Exynos" processor (4210) which is a dual-core ARM Cortex A-9 processor running at 1.4GHz. We have seen some products from Samsung using other processors, which might have been a defensive move to secure a portfolio that would circumvent some of the ongoing legal battles with Apple (that this particular model was temporarily set back by).