Samsung Dramatically Slashes Handset Prices in India
Samsung has been in a thick conundrum this past year, as the company has seen their profits stumble season after season, with the last quarter hitting a disappointing $4.87 billion in revenue when the year before they had a much stronger $7.7 billion figure in the same fourth quarter. Numerous news surrounding Samsung’s imminent demise surfaced, many focusing on their inability to sustain a good flagship model; it is no secret their Galaxy S line has lost much of its appeal to both casual consumers and enthusiasts alike, which has pushed the company to try to redesign the experience around core aspects like performance, but in reality the top-end is just one aspect of the current mobile industry.
Today, Samsung slashed many of its popular product’s prices in India, the key emerging region for OEMs. While market penetration in India is still low, it is expected to hit the top charts for smartphone revenue soon given the possibility for growth it offers: its population is just over 1.2 billion people, nearly as many as China. However, most current estimates place smartphone ownership at around 120 million, which means that only 1 in 10 people have a smartphone. In 2014 the landscape was still unclear and ripe for the taking, and it was said to be anyone’s game as far as manufacturer presence goes. Xiaomi, however, was one of the clear growers despite the small share of controversies that they earned for themselves there.
The Galaxy s4 launched for Rs 41,500 ($667) in India, but has now seen its price slashed to Rs 17,999 ($290), a decrease of 57%. While this is an old flagship, its spec sheet is now a little more justifiable. Samsung’s other popular offerings also saw a cut: the Galaxy S3 Neo, a revamp of the popular S3 that comes with KitKat baked in, was released in India in 2014 at Rs 25,499 ($410) and now retails for Rs 12,499 ($200), which marks another price halving. The Galaxy A3 went down from Rs 19,300 ($310) to 17,900 ($285) and the A5 from 23,000 ($370) to Rs 20,900 ($335).
This measure was not just smart, it was necessary for Samsung to stay relevant in this market. The company has seemingly lost its path, given that on the high-end their competition has stiffed up: while they dominated with their S3 and S4 handsets a while back, other OEMs have picked up dramatically with LG advancing in their home turf with their LG G3, which outpaced the S5 flagship release of 2014. The latest iPhone offerings have also eaten a share of Samsung’s customers, and presumably many Galaxy owners converted to iOS. But on the emerging markets and China, they also lost the edge given their pricing strategy is outdated and not tuned for these regions. Companies like Xiaomi or Micromax can sustain great sales due to their affordable products that rival or surpass Samsung’s in specifications, yet were significantly cheaper before this price update. The fact that Google’s own Android One is becoming a big player in the region also means business, and it was about time Samsung did something to confront this issue.
This development alongside their latest announced, reported or rumored changes seem to suggest big renovations in Samsung’s market strategies: Their newest flagships will supposedly feature new redesigns with emphasis on tackling all of their previous shortcomings such as performance and build quality. Their mid-range offerings strengthened up with the introduction of new and decent phones that are still a tad pricey for the segment they are in, but at the same time they are allegedly slashing the pointlessly huge repertoire they had to offer. This last bit was reported in conjunction with a tacit better price competitiveness, and this could finally be one of the initial strides towards such a game plan. While I’m sure a lot of people will be hesitant to conclusively assume Samsung is changing its ways on many of these fronts, lets not forget that they are a company first and foremost, and their focus is profit. All of these bad decisions affected their revenue in some way or another, and if internet forum members are able to see it, I’m sure so can they. The mobile industry is seeing big changes with the emerging markets hitting the spotlight, and with the adoption (especially for flagships) taking a back seat in developed countries. It’s do or die for these companies, and they can’t take their chances by staying stagnant. Samsung being one of the richest and most powerful companies in the world, I’m sure they’d do whatever it takes to stay on top; and those measures could bring us just what we want.
Do you think Samsung might be waking up? Tell us in the comments below!