Although for years the company Apple Lossless Audio CODEC (ALAC), was blamed for the way it forces mobile phone operators to grant large subsidies to terminals iPhone, a recent study demonstrates that Samsung and HTC obtain much better discounts for their own terminals. The subsidy level granted to Samsung terminals is 84% of the base price of the terminal, in the case of HTC we are talking about an 80% subsidy, and in the case of iPhone terminals we are talking about a 74% subsidy.
ABI Research reports that the average US implied subsidy for Samsung devices is 84% as compared to Apple 74% and HTC 80%, although the absolute value of subsidy is $110 higher for the average Apple product. OEMs and their carrier partners increasingly have to continue to employ highly tactical methods to make sure that their devices are subsidized to a competitive price point in order to help prevent consumers acting to avoid their product on price point alone.
Practically, Samsung offers much more competitive prices than its competitors and this is based on the fact that it has such a large portfolio of products and controls such a large portion of the global mobile phone market. Even if the statistic is based on information obtained from mobile phone operators in the US, we are talking about one of the most important markets in the world, a market in which those from Apple are the leaders, when it comes to the sales generated by each manufacturer in part.
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.
What happens in the USA can be extremely easily observed in Romania as well, the prices of Samsung terminals sold in our country being in many cases lower than the prices of iPhone terminals, the subsidy being of course higher.
