Samsung to focus on fewer smartphone models for higher profits
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The smartphone world is extremely competitive and analysts have been concerned that its growth is reaching a saturation point especially in developed nations. Thus, it's no surprise that manufacturers like Samsung are already thinking about how they can continue to operate in a shrinking market and in a quasi post-smartphone era. Other manufacturers like Sony have explicitly stated that the smartphone market will become unprofitable in the long term.
One direction Samsung may be leaning towards is to exit or greatly reduce its budget smartphone selection. Reducing the number of cheap smartphones would avoid the destructive price wars with Chinese manufacturers and lower the number of weak and inexpensive devices piling up on consumers. This would also allow the manufacturer to concentrate on high-end offerings like the Galaxy S7, which has been outpacing the Galaxy S6 in sales.
Lastly, the slowing growth rate would be deterred by profit maximization with higher starting prices for flagship models. Apple is currently the leader in this particular strategy as it employs more limited global marketing campaigns that are less costly than large-scale advertising efforts.
In a way, the new strategy looks to emulate Apple in that Samsung will be focusing on fewer models, higher prices, and smaller ad campaigns. It remains to be seen how such a long term plan can affect the market. The manufacturer is expected to announce a family of smartphones with foldable displays sometime in the next year.