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.