Carrier subsidy ratios for Samsung handsets higher than Apple and HTC, study finds
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.?
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.?
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.
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.?
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.?
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.
Comments
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.
Quote:
Originally Posted by AppleInsider
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.
Quote:
Originally Posted by DroidFTW
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.
Well that can''t be right, because it would mean Samsung releases its product, and then Apple releases a product to compare to it afterwords.... Clearly its the other way around, the S4 has to be compared to the iPhone 5 because that is the Apple product it copied.
The source article referenced is another clever play on numbers. 'Percentage subsidy per phone'...... ??? Why not just talk about total subsidy $?
I don't know what's going on internally at Apple, but from the outside it looks like Apple just threw up its hands and gave up the smartphone industry to Samsung. I hope that isn't the case. I think that Apple only needs a well-made smartphone with long battery life and an easy to use interface. I don't think most consumers are looking for whiz-bang features that the GS4 offers. No point in crying over spilt milk. Maybe Apple will have something up its sleeve to attract a lot of iPhone buyers. I wanna believe.
Apple holds 39% of US smartphone market, far ahead of Samsung's 23%
This is such a silly article. If there's any complaining to be done, it's that Apple's absolute subsidy is more than $100 higher than Samsung's. The carriers shoot for a subsidized price of $200 to $300 for high-end models. The ratio of subsidy to MSRP does not matter.
Why does such a popular phone have to be pimped so soon after its launch?
A phrase just popped into my head that I think describes Samsung's lineup:
Whore of the Month Club.
Maybe Samsung should just do a subscription service, where you get the latest version of the S4 each month.
Samsung doesn't play analysts. Analysts play the stock market and Apple's stock price because they know too many ppl who don't understand Apple and its products bought the stock and are therefore easily scared.
As a result the play Jojo with the stock price, making money on the up and down as they please.
How is this good for an industry? It's like cheering that HP is going to run Dell out of business. That's not good for competition or consumers. Samsung has a huge advantage as both a component maker and smartphone maker.
Samsung is the new Sony, and the old Sony is almost dead in HDTVs and smartphone.
How long until ZTE or Huwai, with the massive financial backing of the Chinese Government, become the new Samsung? What if the Chinse government declare that it 's citizens can only buy smartphone from Chinese owned businesses? How long until Chinese companies can provide all of their own components and not rely on Samsung?
Food for thought?
Nope: Apple says they want to make the best product. You want Apple to make the most. Because you're afraid to be seen with an unpopular product, even if it is the best.