Samsung is changing its strategy for its midrange phones in order to attract a younger audience and move harder into developing markets, according to an interview with CNBC.
DJ Koh, president of mobile communications at Samsung, said that Samsung will be changing the way it deals with mobile technological advancements. Specifically, it will now be looking to bring more premium features previously only available in flagship phones like the Galaxy Note 9 or the Galaxy S9 to lower-priced, midrange devices like the Galaxy A8 — and may even look at giving midrange phones new features before flagship phones.
“In the past, I brought the new technology and differentiation to the flagship model and then moved to the mid-end,” Koh said to CNBC. “But I have changed my strategy from this year to bring technology and differentiation points starting from the mid-end”. He also mentioned that Samsung would consider launching more than one midrange model per year, if that helped to boost sales.
But with Samsung sat atop the smartphone sales, why is it feeling the need to change a clearly winning strategy? The answer is that many developed markets are reaching “peak smartphone.” This year saw a slump in sales for the Galaxy S9, and while it’s tempting to blame the S9’s lack of massive innovation on the Galaxy S8‘s formula, this could also be due to a larger change in the marketplace. The International Data Corporation confirmed that smartphone sales had slumped in the first part of 2018 — a change that Samsung saw coming.
Smartphones are lasting longer than ever before, so not everyone is seeing the need to upgrade regularly — and that’s putting the kibosh on growth in certain markets. But there are areas where growth is still occurring — markets that crave lower-cost, high-specification handsets. Companies like Huawei, Honor, and Oppo have traditionally ruled these areas with high-spec low-cost phones, and that strategy has led to Huawei overtaking Apple as the world’s second-largest phone manufacturer.
By changing its strategy with lower-cost midrange phones, Samsung is hoping to barge into that marketplace that Huawei, Honor, and others have traditionally enjoyed — and it’s not just developing markets that encompass this either. Younger users who might not be able to afford the latest flagship phones may also be swayed by the idea of a lower-priced Samsung handset with premium features like the DeX desktop mode.
Regardless of what Samsung’s intentions are, this is a positive move for the market as a whole, and we look forward to seeing a premium-midrange phone from Samsung.
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