x PhoneArena is looking for new authors! To view all available positions, click here.
  • Home
  • News
  • Samsung, not Apple, has the highest subsidies in the mobile market

Samsung, not Apple, has the highest subsidies in the mobile market

Posted: , by Michael H.

Tags:

Samsung, not Apple, has the highest subsidies in the mobile market
For a long time, Apple was the king of smartphone subsidies. Apple devices cost the most outright, but always clocked in at that same $199 price point. But, just as Apple lost its crown on market share, there is a new king of smartphone subsidies: Samsung. It probably shouldn't be a surprise of course. Samsung's devices are the hottest on the market, and the top of the line always has the best internals available (even if the outside isn't all that impressive).

Samsung, not Apple, has the highest subsidies in the mobile market
According to a new report from market research firm ABI Research, Samsung devices have an absurd 84% subsidy, meaning that carriers cover an average of 84% of the device cost over the terms of a 2-year contract. HTC comes in second with 80% subsidy, and Apple shows up third with a 74% average subsidy. 

ABI analyst Nick Spencer sees a dangerous trend in the numbers: 
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.

If Spencer is right, that sounds like bad news for competition, and may also cause trouble for upstart platforms like Ubuntu, Firefox, Tizen, and Sailfish.

source: ABI Research via BGR

27 Comments
  • Options
    Close




posted on 28 Jun 2013, 16:03 11

1. javac (Posts: 102; Member since: 04 Mar 2013)


This is stupid I work at Verizon and verizon sets the price for the devices. Which means this is completely misleading in everyway. You cant hold the manufacturer at fault for a carriers pricing. Gtfo of here

posted on 28 Jun 2013, 17:18 3

5. Hallucinator (Posts: 344; Member since: 24 May 2010)


But it wasn't stupid for everyone to dog Apple?

posted on 28 Jun 2013, 17:29 5

6. PapaSmurf (Posts: 8810; Member since: 14 May 2012)


I don't think you got his point...

posted on 28 Jun 2013, 21:27 3

18. Hallucinator (Posts: 344; Member since: 24 May 2010)


I got his point. I just felt it was a copout. It is also partially inaccurate. Companies such as Apple and Samsung have some pull with carriers on there price points. So to try and put it just on the carriers is wrong. Therefor, to belittle Apple when they are making "too much profit" and to give Samsung a attaboy is just plain hypocritical.

posted on 28 Jun 2013, 20:47 2

14. javac (Posts: 102; Member since: 04 Mar 2013)


Ya that one went way over your head...

posted on 28 Jun 2013, 18:56 1

8. james004 (Posts: 484; Member since: 15 May 2013)


We get G-Note is 800, G-S and iphone 700, HTC and Sony 600. then Nexus 300? :/ so how much is actual price of phones these days? 500? at max even after some good profit? so companies are make 200-300 from customers for no good reason?

the technology of phones have reached to a point we cant ask for more.
Pricing of these phones need to be regulated.
First Iphone spoiled the market price and it has been like that ever since.

posted on 28 Jun 2013, 21:19

17. stealthd (Posts: 973; Member since: 12 Jun 2011)


That is not what that means at all, are you sure you understand how the pricing works? I don't get where you draw the conclusion that someone is "hold[ing] the manufacturer at fault" from. This is a potential problem, because the bigger the subsidy, the harder it is for smaller carriers to offer them and take the loss from that subsidy. Big companies like Verizon don't have as much of an issue with this. It's not Samsung's "fault", but it is a potential problem.

posted on 28 Jun 2013, 16:08 13

2. Zeus.k (unregistered)


As much as I want to see more competition, you gotta give it to Samsung. Well done sammy. Hope to see a better design language next year though s4 doesn't look bad. The kind of execution Samsung has I don't see anyone challenging them for the top spot any time soon.

posted on 28 Jun 2013, 19:00

9. james004 (Posts: 484; Member since: 15 May 2013)


Remember Nokia in 90s? We thought same thing back then.
Markets stay same for only a decade. then things start shifting and even the bests can't keep up. Samsung has 5 years remaining from how i see them.
They are suborn and soon their mistakes will catching up with them.
there is a company called Q mobile. It has china and surrounding counties under its grip but mostly other continents dont know about it. If those companies start making high end device samsung will be lose even mid range market and will be left with high end tier devices only.

posted on 28 Jun 2013, 20:05 4

12. jdoee100 (Posts: 307; Member since: 04 Jun 2013)


5 yrs? I think you're underestimating samsung. Nokia(phone) and sony(tv)'s reign lasted a long time. Samsung is more dominant than the two companies put together in their heyday. Of course, anything can happen, but 20-30yrs of dominance would not surprise me a bit.
Your other point of some unknown chinese company(a company that is not even in top 5 in china) taking down samsung is not realistic in my opinion. Nokia and sony were taken down by samsung(a multinational company). Likewise, it'll be a multinational company with huge resources that will take down samsung.

posted on 29 Jun 2013, 00:51 1

20. Doakie (Posts: 1304; Member since: 06 May 2009)


Yeah. The only Chinese phone company that I see can stepping up to Samsung will be Huawei. They're in a distant third right now, but they have zero presence in the USA. Once they focus their attention on the USA I think we'll see someone making a good run on Apple and Samsung.

posted on 28 Jun 2013, 20:49 4

15. Jason2k13 (Posts: 657; Member since: 28 Mar 2013)


I think samsung will do alot better than nokia, samsung has the money because they are a multi-billion company that makes not just phones, but TV's, laptops and home appliance. This means they will always be popular and premium to the average consumer unless the competition spends more money than them.

posted on 28 Jun 2013, 17:01 6

3. InspectorGadget80 (Posts: 6674; Member since: 26 Mar 2011)


Then why rather show a chart that Apple is higher than Samsung for? If Apple lost its crown typical ibgr fanboy site. At least SAMSUNG is smart and knows how too take DOWN APPLE

posted on 28 Jun 2013, 17:16 7

4. jdoee100 (Posts: 307; Member since: 04 Jun 2013)


I guess "cheap" plastic isn't that cheap. This basically smashes metal being premium bogus claims.

posted on 28 Jun 2013, 18:25 6

7. Zeus.k (unregistered)


Plastic is better than aluminum in many ways but Samsung's design language isn't the best. But not only Samsung all the other OEMs are doing the same. Repeating the same design. Look at lumia's, iPhone, xperia's everyone is recycling their design probably trying to give their lineups a unified feel. But I think this will change with time and hopefully Samsung will bring a better design language next year. Samsung is the only one who can really turn things around since they have the access to the everything they need to produce great products.

posted on 28 Jun 2013, 19:34 2

11. PapaSmurf (Posts: 8810; Member since: 14 May 2012)


Every Lumia phone that's been released in the past year looks the same... Every iPhone looks the same. Every Samsung phone looks the same (for the most part) and every Nokia Lumia phone looks the same. The only phones that don't are usually HTC phones or Huawei for some odd reason.

posted on 28 Jun 2013, 21:03 4

16. maccess (Posts: 632; Member since: 16 Jan 2013)


actually people didn't hate the s4 design they just complain about the glossy finish back cover that looks cheap.. if i'm honest the s4 design is much better than the htc one design.. people only prefer htc one because its alumunium body that looks and feel much more expensive.. design & ergonomic wise i prefer the s4 anytime anyday anylife..

posted on 28 Jun 2013, 19:01 2

10. ardent1 (Posts: 1997; Member since: 16 Apr 2011)


Apples vs Oranges -- in economics or business, the term we use is ceteris paribus or other things being equal. Here other things aren't being held equal.

One metric is in absolute dollars; the other is in percentage. You need to look at both metrics because if your cost basis is less, then there is a bias when it comes to percentage differences.

Samsung may be perceived to have some of the hottest phones, but the truth is dated iPhones like iPhone 4 or 4S continue to sell very well.

posted on 28 Jun 2013, 20:46 2

13. BadAssAbe (Posts: 434; Member since: 22 Apr 2011)


Keep the bezels minimum and maximize the screens.
And ill be happy

posted on 28 Jun 2013, 22:37

19. -box- (Posts: 3857; Member since: 04 Jan 2012)


Not surprising. Samsung overprices its devices. $700-750 off-contract for the flagship Galaxy typically; in contrast, a Lumia 920 is $450, iphails are $650, Atrix HD was like $500-550 when new, etc.

posted on 29 Jun 2013, 05:19 6

21. Targon (Posts: 2; Member since: 24 Jun 2013)


No, the S4 16GB model is $600-$650 off contract for the AT&T version. The Note 2 being a bigger phone is more expensive, but that's to be expected. People look at the prices and think they are overpriced, but AMOLED screens and Gorilla Glass(3 for the S4) are NOT cheap components. Larger batteries and other things like that also cost a bit. You also have to take into account that Samsung has been pushing hard when it comes to software features, and that isn't cheap to put that much R&D in.

Innovation comes at a cost, and that is why Apple has been getting blasted for the past year, because the level of innovation has been very low. iPhone 5 being a 4.0 inch phone, but other than that and faster chips isn't really innovative, with very little "wow" compared to previous models. The next iPhone brings iOS 7, but again, no real "Wow, that is cool" compared to what Samsung and HTC are bringing to the table. With so little "wow" to them, Apple doesn't deserve the high prices it has been charging, because the R&D just hasn't been there to justify it.

You may have noticed that the Galaxy S3, Note 2, and S4 have actually been packed with a ton of features that Apple just doesn't have. Being able to use your phone while wearing gloves, and air gestures have so much more potential in the business world where you put your phone down, or mount the phone it makes a lot of sense. Do you think Apple will let you do these things? In January when it is below freezing, an OLED screen will be a lot better as well, and being able to keep your gloves on will be VERY useful for many of us.

posted on 29 Jun 2013, 09:34 4

22. SleepingOz (unregistered)


Exactly and the fact that the L920 is $450, is that nokia can't afford to price it higher if they want people to buy their products.
But then again, you get what you pay for.

posted on 29 Jun 2013, 10:18 3

23. Whateverman (Posts: 3231; Member since: 17 May 2009)


Okay, this is off topic, I know. But I just gotta ask you...

How did you come up with the "SleepingOz" username and tiger avatar combo? One would think the two are totally unrelated, but you pull it off like a BOSS! I really like it.

posted on 29 Jun 2013, 19:50

25. SleepingOz (unregistered)


Thanks dude. Tbh, I stole this username from a friend on facebook.. I found it original, haha and I've always love tigers.

posted on 30 Jun 2013, 05:47

26. number29 (Posts: 185; Member since: 25 Jan 2013)


Hang on, wasn't it Nokia who came up with touchscreens that could be used with gloves on?

posted on 30 Jun 2013, 07:56

27. SleepingOz (unregistered)


Nopes, Synaptics developed this technology.

posted on 29 Jun 2013, 15:31 1

24. androidfanboy (Posts: 162; Member since: 24 Jun 2013)


Apple reached it's peak and will now decline

Want to comment? Please login or register.

Latest stories