Galaxy S4 vs iPhone 5: Apple wins the pricing battle on AT&T

by: Chris SmithMarch 29, 2013

samsung galaxy s4 vs iPhone 5 5 aa 600

When announcing Galaxy S4 pre-order details on Thursday, AT&T puzzled potential Galaxy S4 buyers with that unexpected $249.99 on-contract price.

Probably anybody keeping tabs on smartphone news, us included, expected the handset to cost $199.99 on-contract with AT&T (and every other carrier in the region) at least at launch. After all, that’s what previous Galaxy S models cost when they were released in the U.S., with pricing going down in the months after their launch.

But what’s really unexpected is to see the Galaxy S4’s on-contract price surpass the cheapest on-contract iPhone 5, currently Apple’s latest iPhone model. The 16GB iPhone 5 costs $199.99 from the same carrier, with a similar two-year contract, or $50 less than what AT&T is planning to charge for a 16GB Galaxy S4 model.

So far we have two American carriers going official when it comes to Galaxy S4 pricing, AT&T and T-Mobile – with the latter, both the Galaxy S4 and iPhone 5 will cost $99 upfront and off-contract, followed by a number of installments of $20/month – and it will be interesting to see how much other mobile operators will charge for Samsung’s new flagship device.

Why would AT&T, or any carrier price, the base subsidized Galaxy S4 model at $249.99? Unofficially, carriers would rather have subscribers choose any smartphone but the iPhone, even if they still need to carry the iOS device in order not to lose customers. So why price one of the most coveted Android handsets of the year higher than its most important rival?

Is AT&T trying to get some of its money that it pays for Galaxy S4 shipments back from future subscribers faster? Is AT&T trying to take advantage of the increased interest in the Galaxy S4 and make a quicker buck off of the first Galaxy S4 sales? We have no way of answering these questions, and neither AT&T nor Samsung commented on the price of the device.

The New York Times reminds us that the Galaxy S4 costs more to produce than the iPhone 5, according to IHS iSupply:

It is unclear why the Galaxy S 4 costs more than an iPhone. Samsung’s last flagship phone, the Galaxy S III, matched the iPhone’s price. Jan Dawson, a telecom analyst at Ovum, pointed out that according to estimates by IHS iSuppli, a components research firm, the parts for the Galaxy S 4 cost more than the iPhone 5’s. The S 4’s bigger screen, new processor and new sensors are adding to its cost, according to iSuppli.

What if it isn’t AT&T’s fault here? Is Samsung simply interested in maintaining its Galaxy S-based profits by hiking the price of the latest model in order to make up for increased production costs? Or is Samsung trying to increase its margins? Whatever the case, the higher the Galaxy S4 cost for carriers, the higher the on-contract price of the device would be. Again, we can only speculate on this Galaxy S4 price issue because we still need more pricing details for the U.S. Galaxy S4 versions.

samsung galaxy s4 vs iPhone 5 2 aa 600

We’ll have to wait and see what Verizon and Sprint will ask for the Galaxy S4 to see whether U.S. buyers will indeed have a Galaxy S4 pricing issue on their hands or not.

We will also remind you that, at this time, we have no idea how much the Galaxy S4 will cost in the U.S. – we’re talking full price here, for those buyers that don’t like contracts, or aren’t eligible for upgrades. The 16GB iPhone 5 costs $649 in case you were wondering.

Speaking about full prices for the handset, we’ll notice that the cheapest UK Galaxy S4 pre-order price for an unlocked handset is £529.98 (or $804), while the unlocked iPhone 5 costs £529 in the region.

On the same pricing note, a U.S. Samsung contest that lists the Galaxy S4 among the offered prizes, currently lists the retail value of the handset at $650, although before at least two publications noted a cheaper retail value for the device in the rules section of the contest, $579. So we’ll ask again, did Samsung recently raise the price of the Galaxy S4?

In the Android universe, where new Android handsets arrive every few months or so, carriers and retailers often offer good deals even on high-end devices in the months following official launches. So the Galaxy S4 price will go certainly down in the coming months. Is that why carriers and/or Samsung would be interested in pricing the handset at $249.99 on contract at launch?

Comparatively, the latest iPhone generation sells for the same price, with very few exceptions, with U.S. carriers and retailers, from launch until the next model arrives.

Will you be paying $50 extra to buy the AT&T Galaxy S4, or are you waiting for the price to go down? What if other U.S. carriers (excepting T-Mobile) will also ask $249.99 for a subsidized 16GB Galaxy S4?

  • Jelly Bean

    Samsung is beginning to believe its own marketing. Even the Galaxy Note 8 is more expensive than the iPad mini, even though the iPad feels more “premium”. Another reason why my next phone will be the HTC One.

  • IncCo

    Well.. the iphone is almost months older.. so i guess it should be slightly cheaper?

    • Jelly Bean

      The iphone was never as expensive as the GS4 to begin with. :-/

      • John Koetsier poyo

        coz u don have money..

        • Jelly Bean

          Can you speak English?

  • MasterMuffin

    I’m pretty sure that the making of sgs4 costs more than the making of iPhone + iPhone is older so I don’t see the problem. Maybe it’s just because I’m not ‘murican and I always buy phones with full price :)

  • wferreira

    Maybe can be because they want to slow the demand to catch up with the production of the octa-core? I will getting one but not until eligible for upgrade in 3 more months :(
    But I want to see how big will be the Note 3 as that is my first choice :)

  • Monji

    Why are you comparing the price of a year old phone with a phone that is going to get released?

  • chris

    Seriosuly? Any person should be able to understand where the more bang for the buck really is.. Doesn’t take a rocket scientist but then again this world is filled with retarded people.

  • scuro

    ATT gets paid more from apple than Samsung. That is one of the reasons why they throttled down the speed of android phones a few years ago. The fat is that apples past 3 phones were obsolete by 6 month to a year at the time of their release. Why buy a New iPhone 5, when you can get an “older” android with almost the same, or betters specs for about 1/2 the price?

  • RaptorOO7

    I haven’t seen anything that states the $249 is for a 16GB version and there has been no mention of a 32GB or the MIA 64GB version. I personally will NOT buy the 16GB period. You can’t put apps on the SD card and formatted space is about 10GB so its hardly worth buying.

  • RaptorOO7

    I haven’t seen anything that states the $249 is for a 16GB version and there has been no mention of a 32GB or the MIA 64GB version. I personally will NOT buy the 16GB period. You can’t put apps on the SD card and formatted space is about 10GB so its hardly worth buying.

  • I bought apple iphone 5 16 BG by

    The iPhone’s quality has once again been proven as many flock to Apple Stores to purchase the new device. I personally feel that while the iPhone has not added any drastic new features, it has almost perfected the ones that are familiar to past Apple customers. The device is very sleek and well-built. After two months of regular use, it still appears to be new. The screen is fingerprint resistant unlike many of the past iPhones. The camera is excellent (not to say that past iPhone’s haven’t been able to take good images). It can take panoramas–a very well done effort by Apple to take existing ideas from third party applications and perfect them. The main disadvantage of the iPhone 5 is the lack of good maps support. However, given that Apple is the most valuable company in the world, I am confident that it will spend a portion of its wealth to perfect iMaps in coming iOS updates.

  • Man, iPhone is so old. Same face ever! Boring.