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  • Samsung Handset Subsidy Ratios Found to be higher than Apple and HTC


    A study conducted by market intelligence firm, ABI Research, states that the average implied subsidy for Samsung smartphones sold in the U.S. are substantially higher than comparable products sold by Apple and HTC. This suggests that Samsung is heavily relying on aggressive pricing strategies to squeeze out its competition.

    The latest research points toward Samsung products being subsidized by an average of 84% while Apple and HTC are at 74% and 80% respectively. ABI Chief Research Officer, Stuart Carlaw, had the following to say about the matter:

    Samsung continues to squeeze its competitors at every turn. 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.
    Although the latest iPhone products average a higher absolute subsidy value that is $110 higher than Samsung’s devices, most of Samsung’s devices come at a cheaper initial cost. The aggressive pricing strategies are said to be hindering less well-established vendors from entering the market. ABI Senior Practice Director for Devices, Nick Spencer, said the following regarding the topic:

    The smartphone market in particular is entering a new phase focusing on execution and price, rather than innovation and value. 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.
    When taking a closer look at the teardown of the latest Galaxy model (the S4), it was revealed that the device has a build cost higher than that of Apple’s iPhone 5. It should be noted though that the averages from ABI take into account Samsung’s entire smartphone lineup, which is far more expansive than Apple’s three offerings. We’ll have to wait and see what other companies do about the situation to make their way into the market or if Samsung will continue to squeeze the overall market value.

    Source: ABI Research via BGR
    This article was originally published in forum thread: Samsung Handset Subsidy Ratios Found to be higher than Apple and HTC started by Akshay Masand View original post
    Comments 24 Comments
    1. jOnGarrett's Avatar
      jOnGarrett -
      A strategy that is working out very well for them since they are the No. 1 manufacturer in the world and make more money off Android than Google does.

      +1 for sammy.
    1. tridley68's Avatar
      tridley68 -
      Quote Originally Posted by jOnGarrett View Post
      A strategy that is working out very well for them since they are the No. 1 manufacturer in the world and make more money off Android than Google does.

      +1 for sammy.
      Money is not everything or quantity I still like the Quality product that Apple Produces and will continue to support them I think IOS is still a much better and safer platform
    1. slim.jim's Avatar
      slim.jim -
      Quote Originally Posted by jOnGarrett View Post
      A strategy that is working out very well for them since they are the No. 1 manufacturer in the world and make more money off Android than Google does.

      +1 for sammy.
      Of course they make more money off of Android than Google does, they make a ton of devices (low end and high end) where Google only makes a few. Android is open source so it's free. Im sure Amazon makes more money off Android than Google does too with its kindle sales.
    1. thazsar's Avatar
      thazsar -
      How did I know JonGarrett would be jumping all aboard his Fandroid Train!
    1. Magnum's Avatar
      Magnum -
      Aaaaannnndddd nobody cares
    1. iLoveWindows&iPhone's Avatar
      iLoveWindows&iPhone -
      Quote Originally Posted by Magnum View Post
      Aaaaannnndddd nobody cares
      Correction...The "Sammy" fanboy club and its leader JonGarret care!! (Can you guys pick a name already? Is "Sammy" the new flavor of the week?)
    1. Sakyr's Avatar
      Sakyr -
      Quote Originally Posted by Magnum View Post
      Aaaaannnndddd nobody cares
      Then way waste your time reading the article and posting a useless comment....
    1. Magnum's Avatar
      Magnum -
      Quote Originally Posted by Sakyr View Post
      Then way waste your time reading the article and posting a useless comment....
      Trust I didn't read it. My mistake for thinking I was at modmyi dot com...turns out I'm at modmysammy dot com
    1. steve-z17's Avatar
      steve-z17 -
      If Samsung produced one smartphone a year like Apple, things would be very different! I guess people will take whatever they can to try and make themselves look good...as mentioned above, I'd take quality over quantity any day! Apple provides quality!
    1. Carvensno's Avatar
      Carvensno -
      Quote Originally Posted by jOnGarrett View Post
      A strategy that is working out very well for them since they are the No. 1 manufacturer in the world and make more money off Android than Google does.

      +1 for sammy.
      Well well well look who showed up??? The fandroid troll!!!
    1. endwaro's Avatar
      endwaro -
      Quote Originally Posted by steve-z17 View Post
      If Samsung produced one smartphone a year like Apple, things would be very different! I guess people will take whatever they can to try and make themselves look good...as mentioned above, I'd take quality over quantity any day! Apple provides quality!
      1+ Amen!
    1. Gamemaster77's Avatar
      Gamemaster77 -
      I don't get why some people hate at Samsung for making their money by making tons of products. Not everyone can afford the latest high-end smartphone. Samsung caters to different markets, trying to get everyone in between. Just because Samsung makes low-end phones doesn't make their Galaxy's any worse.
    1. thazsar's Avatar
      thazsar -
      Quote Originally Posted by Gamemaster77 View Post
      I don't get why some people hate at Samsung for making their money by making tons of products. Not everyone can afford the latest high-end smartphone. Samsung caters to different markets, trying to get everyone in between. Just because Samsung makes low-end phones doesn't make their Galaxy's any worse.
      I, personally, don't hate Samsung; I like certain Samsung products! It's Android that we still shy away from. Creating multiple phones for different consumers is a good thing! It just skews these type of reports because Apple only makes a new phone once a year compared to the multiple devices made by Samsung, HTC, etc, etc.
    1. Tperry's Avatar
      Tperry -
      Quote Originally Posted by steve-z17 View Post
      , I'd take quality over quantity any day! Apple provides quality!
      On a related note. I'm finding my wonderful iPhone 5 is lasting me about 6.5 hours a day with approximately the same capabilities enabled that my S3 had (actually the S3 does a little more). S3 life is just shy of 8 hours before needing to hit the charger. Guess its time to remove some of the iPhone tweaks and dumb it down to get some more life back.
    1. Fellowapplegater's Avatar
      Fellowapplegater -
      Bashing someone who says Samsung has a smart business mind isn't fan boyish at all either right? Trollol
    1. thazsar's Avatar
      thazsar -
      Quote Originally Posted by Fellowapplegater View Post
      Bashing someone who says Samsung has a smart business mind isn't fan boyish at all either right? Trollol
      And coming onto an Apple-Related Jailbreak site just to bash Apple isn't Fandroid-ish at all, either! Go somewhere else w/ the name calling; I'm sure A will just laugh and laugh and laugh with you on their!!!
    1. Fellowapplegater's Avatar
      Fellowapplegater -
      Quote Originally Posted by thazsar View Post
      And coming onto an Apple-Related Jailbreak site just to bash Apple isn't Fandroid-ish at all, either! Go somewhere else w/ the name calling; I'm sure A will just laugh and laugh and laugh with you on their!!!
      There* and no, seeing as I'm an iPhone user ill stick with MMI. Thanks for the tip though.
    1. kuanyu's Avatar
      kuanyu -
      As much as I love apple, I think they are losing their quality products. For example, my first iPhone 5 has wifi problems, my second has faulty volume buttons, and now I'm getting my third.
    1. thazsar's Avatar
      thazsar -
      Quote Originally Posted by Fellowapplegater View Post
      There* and no, seeing as I'm an iPhone user ill stick with MMI. Thanks for the tip though.
      Wasn't directing that at you. Your username states your preference!
    1. Silverado1987's Avatar
      Silverado1987 -
      Quote Originally Posted by Gamemaster77 View Post
      I don't get why some people hate at Samsung for making their money by making tons of products. Not everyone can afford the latest high-end smartphone. Samsung caters to different markets, trying to get everyone in between. Just because Samsung makes low-end phones doesn't make their Galaxy's any worse.
      Thank you.