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Thursday, June 27, 2013
Samsung Phones Subsidy Ratio Higher than Apple and HTC

The average US implied subsidy for Samsung devices is 84% as compared to Apple 74% and HTC 80%, although absolute value of subsidy is $110 higher for the average Apple product, according to data released by ABI Research.

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.

Stuart Carlaw, chief research officer, stated: "Samsung continues to squeeze its competitors at every turn. The Samsung Galaxy SIIII 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."

Senior practice director for devices, Nick Spencer, added a note of caution: "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."

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