Cheaper contract prices help Samsung Galaxy S3 shipments surpass 10m units

A smart pricing strategy may be helping Samsung sell even more Galaxy S3 smartphones while keeping mobile phone operators happy.

Almost two months after it went on preorder, the phone still carries its original selling price of £499.95 (selling for even more at some retailers like Expansys or Insight) which is the same as the iPhone 4S.

Surprisingly enough, Carphone Warehouse sells the phone on PAYG for much more than the SIM-free version which leads us to believe that this could be a deliberate attempt by Samsung and the network operators to lure users into contracts rather than PAYG or SIM-free handsets which carry poor ARPU (average revenue per user), offer low possibilities of up selling and tie-in.

In comparison, the phone costs £26 per month on a two-year contract from T-Mobile, that's a total cost of ownership of £624 or just £124 more than the cost of buying the phone by itself.

Compare and contrast with the iPhone 4S. The cheapest contract for Apple's flagship handset is £31 per month or £744, far more expensive than for the Galaxy S3.

By deliberately pitching the Galaxy S3 at a lower price range (for contracts) compared to the iPhone 4S (and the iPhone 5) while keeping PAYG/SIM free prices high, Samsung may want to highlight the relative affordability factor of the phone (at least on contract). And it seems that this argument is winning.

slideshow#265