James writes, having read about the huge $500 discount that JB HiFi is offering on Samsung’s Galaxy S9 and Galaxy S9+ when signing up with Telstra:

How can JB Hi-Fi sell the Samsung Galaxy S9+ so cheap on a 12 month Telstra plan? Why can’t Telstra offer the same deal to its customers?

The short answer is we don’t exactly know. However, we do know a few things which might point to an answer:

  • This isn’t the first time JB HiFi has run promotions with Telstra that offer great value, though it is the first time we’ve seen direct discounting of handsets. For example, not long ago, JB HiFi offered a $200 gift card to customers who took up a Telstra plan – the same plan as on offer here, in fact.
  • There are similar offers occurring internationally too, albeit with different terms and conditions. Verizon and Sprint have each offered $500 discounts on Samsung’s new Galaxy S9 range, though typically in exchange for longer-term contracts and porting-in a number.

Most likely, what we’re seeing here is a promotion by Samsung, Telstra or (most likely) both.  It’s quite common for carriers to offer an incentive to sign up for 12-month or longer contracts, because there’s a certainty of income for them in doing so. Equally, Samsung is quite likely making a big push to get its Galaxy S9 handsets in as many hands as possible. It seems quite probable that this is a promotion by Samsung AND Telstra, and that $500 discount isn’t coming out of Telstra’s pocket (or Samsung’s for that matter) alone.

What’s also possible, but this is looking into things a bit deeper, is that Samsung is offering steep discounts (in conjunction with the other aims of the suspected promotion) in order to move stock quickly. Does it want to get phones in people’s hands before something new is announced which makes Samsung’s offerings less compelling? Probably. Is there something new and wonderful around the corner? Well, that we don’t know, but there almost always is.

We can think of good reasons for Telstra and Samsung to team up to offer this discount, but ultimately the winner here is the consumer; that $500 discount is hard to argue with, and as 12-month plans go, Telstra’s offering is fairly competitive – a good amount of data on one of the fastest networks that works in most places.

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Tom Sekulic
Tom Sekulic
2 years ago

“How can JB Hi-Fi sell the Samsung Galaxy S9+ so cheap on a 12 month Telstra plan?”
Easy: it’s called “Australia Tax”
S9 on Samsung US Web site costs $AU955
S9 on Samsung AUWeb site costs $AU1200

Samsung’s discount is not that big. They still make a profit with that small (for them) discount.

Darren
Darren
Reply to  Tom Sekulic
2 years ago

Is the US one with or without tax?

Tom Sekulic
Tom Sekulic
Reply to  Darren
2 years ago

Found it….Ex tax. So, the price difference is lower. Still, US have cheaper phones, with or without tax.

Mike Stevens
2 years ago

I wonder what sort of margin they have to play with on the handset…

Joe
Joe
Reply to  Mike Stevens
2 years ago

Quite a lot, Samsung take 10-20% off on their education and corporate stores and then theres things like cashrewards. So its not unreasonable to for Telstra and Samsung to come up with this deal.