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Is the Galaxy S4 Overpriced?

by Todd Haselton | March 28, 2013March 28, 2013 10:30 am PDT

Samsung Galaxy S 4 vs HTC One

AT&T announced on Thursday that it plans to take pre-orders for the Galaxy S4 beginning on April 16. The device will cost $250 with a new two-year contract. Wow that seems overpriced, I thought to myself as I was writing up the announcement. It’s not that I don’t think $250 is worth it over the length of a two year contract, it totally is, it’s just out of the norm for high-end smartphone prices. Worse, AT&T didn’t clarify if the pricing was for the 16GB or 32GB model, although my gut tells me that it’s a good business practice to announce the lowest price possible.

Typically the only devices we’ve seen priced above $200 with a new two-year contract are Samsung’s Galaxy Note smartphones. The iPhone always launches at the low-end with a $200 price point. The HTC One, another flagship smartphone, is expected to cost $200. Even Samsung’s first Galaxy S device and the successor, the Galaxy S II, launched for $200. So why the big price increase?

I know the hardware is expensive to an extent. The 1080p 5-inch screen is stunning to look at, but so is the display on the HTC One. The materials can’t cost that much to make — it has a plastic body while the iPhone 5 and the HTC One take advantage of a more premium aluminum material.

Perhaps Samsung knows its phone is going to be successful. Or maybe AT&T knows it. There’s reason for the confidence; Samsung’s Galaxy devices usually sell tens of millions of units shortly after launch. Samsung has sold more than 100 million Galaxy S branded phones in total. Add $50 to each unit sold and you’re talking about a lot of money being made. But at the cost of who? Us, the consumers and fans.

Are we being milked for the extra $50 purely because of the confidence? It seems like it. I can’t figure out why the phone wouldn’t be listed at $199. Most of the innovation, if we call it that, is on the software and services side. That ends up being a cost in research and development, but it’s certainly not an added cost to the build materials. I wonder if this will backfire on Samsung and end up being a benefit to HTC.

I suppose this is just a rant of mine. I just don’t think adding $50 to the price of a phone because you know it’s going to be successful is a fair bargain for consumers. Hopefully I’m wrong.

Todd Haselton

Todd Haselton has been writing professionally since 2006 during his undergraduate days at Lehigh University. He started out as an intern with...