Samsung has been spending millions of dollars marketing their Galaxy smart phones and seeing the grand launch of Galaxy SIV, we may think that the company is mainly focused on its high end phones.
Many believe that the Galaxy lineup is the most marketed smart phone lineup in the world as of now and every year we have seen better and more innovative marketing strategies by the company. But one should note that the company is not like Apple, which is focused on a single high end smart phone for generating their revenue.
According to the WSJ, Samsung’s sales strategy is not just focused on Smart phones costing hundreds of dollar, but the company is developing and releasing a number of handsets aimed at the low end market. Out of the 8 phones released this year, Galaxy S4 is the only high end smart phone from the company. Rest all of the smart phones are for the budget oriented customers. The low end phones from Samsung like the REX lineup costs less than $100 and is mainly aimed at the customers living in the emerging markets like India and Indonesia.
Although the company has been silently releasing such low end devices, these devices have actually helped Samsung become the number one Smartphone manufacturer taking over Apple last year with a market share of 30%. The company also became the number one manufacturer by shipments after jumping to the top spot beating Nokia in 2012.
In a recent interview with the Samsung Co-Chief Executive J.K. Shin, he said “We are quite active in the low-end smartphone market and we will continue to compete in this area,”. He further added “In markets like Indonesia, consumers are switching from feature phones to smartphones and the low-end market is developing quickly.”
Although some analysts believe that focusing on the low end market would eat into the profits of the company, a company executive said that their low end device segment was still a profitable venture for the company. According to analysts, Samsung’s profit margin from low end devices is about 12 percent as compared to the 28% profit margin on high end devices. But it is worth noting that the sales of the low end devices would be much greater than the high end devices.
With this strategy of releasing a number of devices ranging over a number of price points, Samsung has been able to capture essential market share in developing countries. For example, Samsung has been able to capture a large chunk of Indonesian market segment with its budget friendly devices. In Indonesia, Samsung’s market share has increased from a mere 2% in 2010 to a whopping 50% in 2012.
But it won’t be an easy road for Samsung with the competition getting fierce in this segment due to the availability of low cost touch screen feature phones like the Asha series from Nokia and other low end devices from local manufacturers in the country.
via Android Central