Samsung may begin introducing new technology in mid-range phones first now. DJ Koh, mobile CEO at Samsung, revealed this to CNBC. He stated that innovative features in cheaper models can be expected as early as this year.
Samsung has been experiencing slow sales for its flagship smartphones, particularly the Samsung Galaxy S9. In response to this, the South Korean company has chosen to focus on its mid-range phones instead. These include the Galaxy A series of phones. Part of the reasoning for this decision involves catering to the millennial market, which generally has lower disposable income. However, the Galaxy A series starts from as low as RM999, which is still a little higher than popular budget phones from Huawei, Xiaomi, and more.
Sales in Samsung’s mobile division fell 20 percent year-on-year in the second quarter of 2018. The disappointing sales of the Galaxy S9 were cited as a key factor for this. High-end phones generally do well in the US, but the growing market for smartphones in Southeast Asia expects cheaper phones. The ability for Samsung’s competitors to offer high-spec phones at a budget price has placed pressure on the company to change its business strategy.
“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,” Koh told CNBC.
Koh stated that millenials who cannot afford flagships are now Samsung’s primary focus. At the same time, the company wants to deliver meaningful innovations in its mid-range devices to differentiate from its flagships. Samsung’s mobile research and development organisation is already preparing for the shift.
(Source: CNBC)
