Date
21 September 2018
Samsung is packing its lower-priced smartphones with more new features to attract millennials. Photo: Bloomberg
Samsung is packing its lower-priced smartphones with more new features to attract millennials. Photo: Bloomberg

Why Samsung is changing its smartphone strategy

While many gadget fans are eagerly awaiting the special event to be hosted by Apple on Sept. 12, when three new iPhone models are expected to be launched, Samsung Electronics is planning to unveil a foldable smartphone, most likely in November.

The news will undoubtedly ratchet up the competition in the industry, but Samsung also hinted that it would launch the latest and most advanced features on its mid-range products, a move that is obviously aimed at attracting younger users who may not be able to afford its more expensive flagship models.

DJ Koh, the chief executive of Samsung’s mobile division, confirmed on Tuesday that the company will release a foldable smartphone later this year, noting that its consumer surveys show a ready market for that kind of handset.

Samsung is reportedly focusing on how to make the foldable phone different from a tablet. Previous reports indicated that the company was working on a single screen that bends.

Koh said more details of the device could be unveiled at Samsung’s developer conference in November in San Francisco, but gave no timeframe for its launch.

Samsung’s announcement may have stolen the thunder from Apple; fans would probably put off any buying decision until they got a clear idea of the Korean company’s “breakthrough” product.

It has been reported that Apple is coming out with its iPhone XS series, which is not expected to offer much in terms of new design, except for a bigger 6.5-inch screen, a faster processor and a dual-SIM card compatibility for the China market.

So unless Apple will unveil some new features that haven’t been heard through the tech grapevine, chances are Samsung’s foldable phone will dominate the industry buzz for quite some time this year.

This is good news for Samsung, which has so far failed to narrow its gap with Apple in the flagship and luxury phone segment. Even its S9 and Note9 series failed to put much pressure on the iPhone.

Samsung owes much of its market-leading position to its low- to mid-tier products, which have helped bolster its smartphone shipments around the world. Capitalizing on this advantage, the company is packing its lower-priced devices with more new features to attract millennials.

In Hong Kong, Samsung has been adopting this new strategy since last year, when it launched the Smart Octopus Card for its Samsung Pay wallet in a bid to compete with other mobile payment services.

The Smart Octopus service is not limited to its flagship S and Note series, but is also available in its mid-range products like the A series.

Samsung’s focus on millennials is understandable: they form the core spending group in the smartphone market. At the same time, the Korean tech giant is seeking to fend off the strong challenge from Chinese smartphone markers such as Huawei, Xiaomi, Vivo and OnePlus, which are selling their flagship model at mid-range prices.

Samsung cannot afford to let its guard down. Huawei, the world’s largest telecommunications equipment maker, is now No. 2 in smartphone shipments, surpassing Apple in the second quarter of this year.

Huawei’s success is, of course, driven by its strong performance in its home market, China, where Samsung has been losing market share since the exploding battery scandal hit its Galaxy Note 7 device two years ago.

But Huawei is fast gaining ground in overseas markets as well in view of the innovative features of its latest smartphone models, and that’s despite the difficulties it is encountering in the US market, where it is viewed as a security threat.

While using its own brand to compete in the top-tier market, Huawei has introduced the Honor brand to fight in the mass market. This dual-brand strategy is giving Huawei a strong push in the global market.

With such an aggressive challenger, Samsung must work doubly hard to keep its leading market position.

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CG

EJ Insight writer

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