Samsung have announced an overhauled smartphone strategy to concentrate on their cheaper phone range as they respond to falling sales and seek to appeal to cash-strapped millennials.
In the past, I brought the new technology and differentiation to the flagship model and then moved to the mid-end. But I have changed my strategy from this year to bring technology and differentiation points starting from the mid-end.
So, we are very much focusing on millennials who cannot afford the flagship. But how can I deliver meaningful innovation to our millennials?
That’s the reason I’m trying to differentiate the mid-section. You do not want to give Jeff Bezos (Google founder) a seven-year head start.- DJ Koh: Chief Executive, Samsung Electronics
Part of the newly revamped strategy will see Samsung bring cutting-edge features to their lower-end models. The first of the new devices will, they say, be available towards the end of 2018.
Samsung hope that concentrating on the lower-end to mid-range phones will boost sales and attract millennials who, in the past, were unable to afford their flagship models.
After four quarters of record profits, Samsung revealed that this year’s second quarter profits were flat due, in part to the fall in smartphone profitability. Overall it posted revenues from the mobile business were down 20%.
At the time it announced it would be bringing forward the launch of its flagship Samsung Galaxy Note 9 to August to allow more sales in the third quarter. It also stated it would be much more aggressive when it came to pricing.
An earlier report from analyst Lee Seung-Woo from Eugene Investments predicted that Samsung expected to ship 31 million Galaxy S9 handsets in 2018. A total that falls well below Samsung’s sales target of 43 million.
DJ Koh said that Samsung had already overhauled the mobile research and development unit to prepare for the new strategic plans. It meant, Koh said, that a mid-priced new smartphone could be launched more than once a year.
Last month the company announced the introduction of the Samsung Galaxy Watch that aims to compete with Apple. In a press release the company said the new watch would come equipped with a long-lasting battery, LTE connectivity and advanced wellness features and fitness tracking. The face of the watch will have a rotating bezel and a variety of style options including three new watch colour finishes.
Image: Maurizio Pesce