Samsung Pivots to Cheaper Smartphones

      April 25, 2016 12:20

      Samsung will launch a cheaper smartphone in China next month tentatively named the Galaxy C, signaling a shift in strategy from its insistence on high-end models in a saturated market.

      The phone will have a 5.2-inch screen and cost around US$300. The announcement comes just two months after Samsung unveiled its latest premium phone, the Galaxy S7, and will mean that Samsung now has several) affordable phones in its lineup.

      The competition among global smartphone makers is shifting from premium to cheaper models.

      Rival Apple rolled out a more affordable model with the iPhone SE last month, which costs just $399 for a four-inch screen version but otherwise has the same functions as the iPhone 6S.

      LG is preparing to roll out an affordable smartphone which looks like the flagship G5 but with a smaller screen and cheaper parts. It is to be sold in Latin America and Russia first and then in China, India and Europe.

      Prime markets are shifting from advanced countries to developing ones. According to market researcher Strategy Analytics, China will become the biggest smartphone market by 2020, while India ranks second.

      The premium market is saturated. Apple's sales growth slowed for the first time in the fourth quarter of last year. Samsung has had a temporary earnings boost thanks to the success of the new Galaxy S7, but that is not enough to maintain momentum.

      All place their hopes in emerging markets, where cheaper models are the only way forward.

      Competition is expected to intensify. In the past, the market was divided into high-end and low-end players, but now all market players want a slice of the affordable market. Competition is expected to be especially fierce in China and India, which are currently dominated by Xiaomi, Huawei and ZTE.

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