Linked by Thom Holwerda on Sat 14th Jul 2012 00:04 UTC
In the News A fascinating difference in smartphone buying behaviour got highlighted today. In the US, Apple has double the market share of its nearest competitor, Samsung. However, in The Netherlands, the swamp I call home, the situation is completely reversed; Apple sits at 10% of the smartphone market, Samsung at 19.6%. Is this indicative of Europe as a whole? Could German, French, Polish, British, Spanish, Italian, etc. readers give local information from their own countries? I'm intrigued.
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Apple does not price iPhones aggressively in the US. It is the carriers that are dipping into their own pockets to reduce the price of the iPhone (and thus boost Apple's overall profits by roughly 10%).

Of the 4 national wireless carriers, 3 of them carry the iPhone. All three grant Apple a carrier subsidy that is roughly twice as large as that granted to any other phone. Thus, an iPhone that costs $600 sells for $200 after subsidy. An Android phone that costs $400 also sells for $200 after subsidy.

These three carriers are thus hindering sales of other handsets by eliminating their cost advantage over the iPhone. And they're also reducing their own profits by $200 per iPhone sold. But Apple has such a market-dominant position in the US that none of these carriers dares to be the first to break ranks. They can't afford to lose the iPhone.

The lone holdout of the national carriers is T-Mobile USA, whose stated position is that subsidies are unhealthy for the industry as a whole. T-Mobile has made many attempts to sell no-subsidy phones in return for a dramatically reduced monthly rate, but have had only limited success thus far.

Edited 2012-07-14 05:17 UTC

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