Why it matters: Samsung’s revised mobile strategy is surprising but in the wake of slowing flagship sales, the company clearly feels that changes are necessary. There are more questions than answers as of now but it’ll be extremely interesting to see how this plays out in the coming months.
Flagship smartphone buyers have traditionally been the first to get their hands on a company’s flashy new features but that’ll no longer be the case at Samsung.
In a recent interview with CNBC, Samsung mobile boss DJ Koh said the company is changing its strategy amid a slowdown in the smartphone industry.
“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’s new strategy is to focus on millennials who cannot afford the latest flagship but still want a device packed with meaningful innovation. By differentiating mid-range devices, Koh said, they’ll be able to achieve this goal.
Samsung’s new strategy is interesting, to say the least, and it’s evoking all sorts of scenarios on how it could play out – both good and bad.
Experimenting with potentially gimmicky features on high-end phones is expensive. Letting buyers sort out the truly useful new features from the gimmicks at a more affordable price point seems to make sense yet at the same time, it cannibalizes the high-end market as flagship buyers will have less of an incentive to buy expensive phones. Aside from faster core hardware, they know they aren’t going to get any new or exclusive features and that feels like a mistake.
Also, will Samsung’s new strategy impact the rising price of flagships? Has Samsung come to realize that $1,000+ flagships were a mistake? Will mid-range devices become more expensive? Is Samsung essentially conceding the high-end market to Apple?