Verizon iPhone prices are cheaper in US due to the large subsidies that mobile carriers have to offer. This is thanks to Apple’s negotiations with mobile carriers. Mobile carriers in USA like Verizon offer iPhones at lower upfront prices due to this. Google and its Android licensees on the other hand, did not. This leaves Verizon and other carriers to make up the price difference by increasing the price of higher end Android phones to balance their overall margins.
What this results in is that iPhones become cheaper by $100 to $200 over Android smartphones with comparable hardware costs. For Apple, this means that it is able to keep its profits up even in a competitive market filled with Android smartphones from various manufacturers like LG, Samsung and Motorola.
With Apple iPhones like the iPhone 4S selling like hotcakes, this leaves other mobile phone makers and the carriers to fight for whatever remains of the profit. With buyers aiming for the cheaper Android models in the low end segments, the fight at the bottom a rock-bottom prices leaves carriers and other hardware makers bruised. As for buyers interested in high end Android phones, carriers like Verizon understand they will pay almost anything to get the best available, therefore they are marking those models up to be half as much as Apple’s iPhone 4S.
Android costs more than iPhone
Apple has always for years set $199 as the standard entry price for their latest iPhones. Higher end models with more storage are offered too. As for Android, Verizon has set a new contract price of $299 for its high end Android phone.
Listed at $649 without a contract, Verizon is offering both the Motorola Droid RAZR and Samsung Galaxy Nexus at $299 with a two year contract. Compare to this, Apple’s iPhone 4S 16GB model costs $199, given the same $649 without contract. Customers getting Apple’s iPhones are given a generous $450 subsidy compared to just $350 for Motorola and Samsung’s Android phones.
The $450 subsidy offered Apple customers is the same for other iPhone 4S models like the iPhone 4S 32GB and 64GB models. As for the 8GB iPhone 4 by Verizon, it costs $99 and has a retail of $549 which equates to a $450 subsidy too.
For customers not buying their smartphones alone, the iPhone 4S price with contract from carriers like Verizon is more attractive than those prices for competing high end Android smartphones since it is cheaper. For customers getting an iPhone 4S or iPhone 4, these are good deals not be missed. We regularly update Verizon iPhone prices and news. Please visit our site for updates!
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