AppleInsider Staff
The average implied subsidy for Samsung smartphones sold in the U.S. substantially higher than comparable product sold by Apple and HTC, says one study, suggesting the Korean company is heavily relying on aggressive pricing strategies to squeeze out the competition.
According to market intelligence firm ABI Research (via BGR), Samsung and its partner carriers lead the market in offering device subsidies at percentages substantially higher than their nearest competitors.
The latest research shows Samsung products are subsidized by an average of 84 percent, while Apple and HTC are at 74 percent and 80 percent, respectively.
“Samsung continues to squeeze its competitors at every turn," said ABI chief research officer Stuart Carlaw. "The Samsung Galaxy SIV is now considered on a par with Apple’s iPhone 5. Coupled with better subsidy, the breadth of its device portfolio, increasingly savvy marketing, and its excellence in channel execution, it is little wonder Samsung is dominating the mobile handset market from top to bottom.â€
While the latest iPhone products average a higher absolute subsidy value that is $110 higher than Samsung's devices, most of the Korean tech giant's devices come at a cheaper initial cost.
Samsung's aggressive pricing strategies are reportedly hindering less well-established vendors from entering the market.
“The smartphone market in particular is entering a new phase focusing on execution and price, rather than innovation and value," said ABI's senior practice director for devices, Nick Spencer. "Samsung’s scale and supply chain excellence is allowing it to put its competitors under increasing price pressure and win market share. This is a major concern for the rest of the market, especially for smaller, less efficient vendors, as margins will be squeezed and overall market value reduced.â€
A teardown of the latest Galaxy S4 model revealed a build cost higher than that of Apple's flagship iPhone 5. It should be noted, however, that the averages from ABI take into account Samsung's entire lineup, which is far more expansive than Apple's three offerings.
Charles Martin
Christine McKee
Oliver Haslam
William Gallagher
38 Comments
Is anyone surprised?
how is it more expensive? It's plastic, the phone itself does everything slower, they do not have to build their own OS, the screen is amoled pentile crap, the processor is a generic qualcomm (there's no "tweaks" in that model), they do not take into account Apple's "bigger" muscle at securing and getting components, plus the excellence of well trained and efficient manufacturing...
I don't get these analysts. As long as samsung pays them, they post anything.
Where's the DOJ when you really need them?Oh, that's right, protecting the Amazon monopoly from those pesky competitors like iBooks.
Samsung continues to squeeze its competitors at every turn," said ABI chief research officer Stuart Carlaw. "The Samsung Galaxy SIV is now considered on a par with Apple?s iPhone 5.
Sounds like Stewie may have mispoken or is not in tune with the leap frogging that takes place. The iPhone 5 was Apple's answer to the Galaxy S3. The S4 was Samsung's answer to the iPhone 5. The next iPhone (5S?) will be the phone to compare to the S4.
Ditto to all above posts!