Samsung to focus on fewer smartphone models for higher profits

Samsung to focus on fewer smartphone models for higher profits
Samsung to focus on fewer smartphone models for higher profits
The South Korean manufacturer may be switching from the traditional growth-oriented strategy to a newer profit-oriented strategy in the face of a slowing global smartphone market.

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.


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> Notebook / Laptop Reviews and News > News > News Archive > Newsarchive 2016 06 > Samsung to focus on fewer smartphone models for higher profits
Benjamin Herzig/ Allen Ngo, 2016-06-24 (Update: 2016-06-24)
Allen Ngo
Allen Ngo - US Editor in Chief
After graduating with a B.S. in environmental hydrodynamics from the University of California, I studied reactor physics to become licensed by the U.S. NRC to operate nuclear reactors. There's a striking level of appreciation you gain for everyday consumer electronics after working with modern nuclear reactivity systems astonishingly powered by computers from the 80s. When I'm not managing day-to-day activities and US review articles on Notebookcheck, you can catch me following the eSports scene and the latest gaming news.