South Korean smartphone manufactures have reduced their factory prices of products in line with the government's effort to tighten regulations on price subsidies, industry sources said Saturday.

Samsung Electronics, the world's top smartphone marker,slashed the price of its Galaxy Note 2 model to 990,000 won ($874.9), down 9 percent from the previous 1.08 million won, according to the sources.

The top player also discounted the factory price of its Galaxy 3 models to 790,000 won, compared to the previous 890,000 won. Its smaller rival LG Electronics Inc. reduced the price of its Optimus G line-up by 15-25 percent.

Market watchers said the firms' moves came in line with the government's effort to curb excessive subsidies in the saturated market where manufacturers provided compensation to buyers after setting a high factory price on their products.

The price discount also came as the firms aimed to reduce their inventory ahead of the scheduled launch of new models, market watchers added.

Samsung Electronics unveiled the latest addition to its flagship Galaxy smartphone series during a launch show in New York on March 14 and announced plans to release the device in April. (YONHAP)