When it comes to smartphones, it is without doubt that Apple’s smartphones tend to be the priciest, if not somewhere at the top of the range. This is compared to other devices from Samsung where their high-end devices are pricey, but at the same time not as pricey compared to iPhones. According to an ABI Research report that surfaced earlier this year, it is because the average US subsidy for Samsung devices is set at 84%, whilst Apple’s subsidies are at 74%, a good 10% less. Subsidies are a great way for companies to keep their products competitive, with Samsung admitting that without their higher subsidies, their global business would suffer.
This was revealed by Samsung’s CFO, Lee Sang-hoon, who was quoted as saying, “Samsung can’t unveil internal data such as the amount of subsidies given to carriers, the factory price of each Samsung device and sales figures. Even if a new law takes effect, we can’t release key internal data. Samsung believes the government will protect us. If such key data is leaked, then that will seriously hurt our global business.” This is in response to the South Korean government who is attempting to introduce a “subsidy law” to fight against companies who might be over-subsidizing.
As you might have heard, the deal between Microsoft and Nokia is expected to be completed soon as most regulatory bodies, such as the European Commission and the US Department of Justice, have given it their blessing, along with the shareholders of Nokia themselves. Now it will be interesting to see what will be the result of their merging, and if it will help Microsoft slowly start to gain on the likes of iOS and Android, but here’s an alternative that some might not have considered.
According to The Financial Express, they have reported that based on the Microsoft-Nokia agreement, it seems that Microsoft might have originally intended to purchase an equity stake in Nokia, as opposed to acquiring them, although we guess from then until now things must have changed for Microsoft and/or Nokia to change their mind. Purchasing an equity stake would have made Microsoft a shareholder of Nokia which could have seen the Redmond company give Nokia a cash infusion, while allowing Nokia to run as a separate entity, leaving the company intact and ultimately in control of themselves.
However acquiring Nokia is not a bad thing as it would definitely help against the competition from Apple and Samsung, but what do you guys think? Do you think Nokia would have been better off with a cash infusion from Microsoft, as opposed to an outright purchase?