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Finally, Samsung is reinventing its premium smartphone strategy; here’s how


Feb. 17, 2020

Though Samsung still sells the most number of smartphones globally, the brand is under pressure in the premium segment where all companies drive values and profit.
Samsung ’s Unpacked event last week was different. Even as it launched the new Galaxy S20 series and the Z Flip, the world’s largest smartphone maker used the keynote to send a larger message about the brand’s new business strategy, that was focusing on becoming more premium and not just ape rival Apple .
There were some cues in the event. To begin with, Samsung didn’t launch a successor to last year’s Galaxy S10e , the phone launched last year to compete with the iPhone XR. Even as Galaxy S10e continues to sell in the market, the new Galaxy S20 series will not include a cheaper model.
Maybe Samsung, wants to move the “ budget flagship” option to lower price points where it had ‘Lite’ versions of the Galaxy S10 and Note 10. Both devices are a clear response to the new wave of “affordable flagships” segment which is fast gaining ground in India, the world’s second-largest smartphone market by volumes. From Apple to OnePlus to Oppo and Xiaomi now want a share of this pie in one way or the other.
Perhaps more important is the starting price of the Galaxy S20 lineup, which is a clear signal that Samsung is intentionally or unintentionally trying to avoid direct comparisons with Apple. The Galaxy S20 starts at $1000 (roughly Rs 71,526), the Galaxy S20 Plus starts at $1299 (roughly Rs 92,193) and the Galaxy S20 Ultra starts at $1400 (roughly Rs 1,00,137). Last year, Samsung’s most expensive Galaxy S10 Plus model was priced at $1000, while the cheapest one was the $750 Galaxy S10e.
With the Galaxy S20, Samsung has entered a new price territory, beating Apple which is always known for charging more for its phones than the competition. In comparison, the iPhone 11 starts at $699 (roughly Rs 49,997), while the iPhone 11 Pro and iPhone 11 Pro Max are priced at $1000 (roughly Rs 71,526) and $1100 (roughly Rs 78,679) for the base model.
Three years ago, Apple tested consumers’ pockets with the iPhone X , which was the most expensive smartphone, starting at $1000. No doubt, Apple’s phones have been steadily increasing in price with each subsequent model, but there hasn’t been an increase in price after 2017’s iPhone X . But Samsung may seem to have pushed the price of the latest flagship a bit higher, with the base variant of the Galaxy S20 starting at $1000.
Last year, Samsung launched the $2000 Galaxy Fold, which basically turns into a 7.3-inch tablet. And this year, Samsung is introducing a flip-style Galaxy Z Flip, which starts at $1400.
But Samsung’s new strategy might have more to do with creating its own unique brand image among users. The problem with Samsung is that most consumers do not see the South Korean major in the same league as Apple anymore. For them, Apple is a luxury brand and Samsung isn’t.
Devices like the Galaxy S20 Ultra or Galaxy Z Flip can increase Samsung’s popularity among a new generation of luxury consumers, especially millennials with disposable income. That focus was always missing, because Samsung never made an effort to tap into the growing demand of expanding users base with sophisticated tastes and capturing the millennial market.
Must read| What Samsung Galaxy Z Flip means for the foldable phone segment?
No doubt, Samsung’s Galaxy S smartphones have always been known for their superior quality. But they lacked the “cool” factor and not many people were willing to show off a Galaxy S10 smartphone to everyone else as they do with an iPhone.
Another new strategy Samsung has implemented with its latest flagship smartphone series, in particular, with the Galaxy S20 is the focus on specifications. This move could be a calculated marketing ploy to sell expensive Galaxy S20 smartphones to consumers in the US and Europe where iPhone’s get most of their numbers. Also, specs are great for the online market where it is also about showing better in comparisons.
Every Galaxy S20 model comes with top-of-the-line specifications — 120Hz displays, brand new cameras, and support for 5G networks across the entire line (India would only get LTE variants). But Samsung has taken things one notch higher with the Galaxy S20 Ultra with its huge 6.9-inch display, blazing-fast processor, up to 16GB RAM, 108MP camera, 8K video recording and massive 5000mAh battery.
Though Samsung still sells the most number of smartphones globally, the brand is under pressure in the premium segment where all companies drive values and profit. It’s been a no-brainer to say that the Galaxy S20 and Galaxy Z Flip are Samsung’s most important products in 2020. Focus on premium Galaxy series and innovation in foldable smartphone form factor could help Samsung gain a competitive advantage.
At the same time, Samsung also needs to introduce more smartphones like the Galaxy S10 Lite and Galaxy Note 10 Lite in the “affordable flagship” segment. If Samsung takes longer to introduce such devices, it could lose its most devoted customers all together to OnePlus and Apple.
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