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Carrier subsidies are less common in non-American markets, so the consumer sees the pricing.

Fine, but Samsung's Galaxy S5 costs are in line with Apple's on iPhone 6.

I think the problem here is that the premium phone market has matured, and most new growth will be at lower price points.

Samsung is being hit hard because their portfolio or brand apparently doesn't help them to scale down to mainstream price points. Outside of the "Galaxy" line, they aren't seen as particularly better than other vendors.

They don't need Galaxy S5 to compete in costs with Xiaomi, but they will need to have "Samsung" mean more than "Galaxy S", and have the products and brand that can compete.