Nash DavidMay 26, 2015 19:30:48 IST
When the Samsung Galaxy S3 was launched in May 2012, it transformed the fortunes of the Korean manufacturer. In fact, it went on to become the most successful Android smartphone of all time! Three years later, Samsung was looking closely at its flagship phones – the Samsung Galaxy S6 and S6 Edge – hoping that they can once again work some much-needed magic. Isn't surprising then that barely 2 months since launch, the flagship devices are available at a discount of Rs 10,000 online.
A lot has changed in the smartphone ecosystem over the past 3 years. And it’s not an easy road ahead for Samsung. Apple with its iOS-powered iPhones, Google-powered Nexus devices, and pocket-friendly Chinese smartphones from Xiaomi and others, the competition has grown stronger for Samsung.
If competition wasn’t enough, there is now a price battle that hinges on the fag end of comfort for most Indians. Well, India is regarded a price-sensitive market for good reason! So ever since Samsung launched the Galaxy S6 and Samsung Galaxy S6 Edge, a lot has been at stake. Given the rich feature-laden spec sheet of the Galaxy S6 and S6 Edge with such innovative features such as a curved screen on the edge, the Galaxy was expected to be a runaway success. Only it isn’t.
In a conversation with Yonhap, a Korean news agency, a Samsung official revealed that it sold a mere 10 million units of the Samsung Galaxy S6 in one month. “The sales of the Galaxy S6 series have already surpassed 10 million,” the official quoted. However, Samsung has not clarified when the 10 million sales mark was reached for the Galaxy S6.
Although the numbers may seem impressive at first glance, when viewed in context of the market objectives, the path ahead seems a steep task for Samsung. Understandably, there is a visible drop in the price of its benchmark Galaxy device.
Either the Apple way – cachet for a budget
There’s one way Apple positions its smartphones. They’re premium and sought after, especially during the prime of their shelf life. Then there’s a new iteration in the product line, usually once a year, which makes the previous version a great buy! It’s a win-win. Better revenues with consumption of existing inventories. Either way, it works for Apple. According to Punit Mathur, a 42-year-old VP of a digital media company as quoted by Bloomberg, "You flaunt an iPhone, but you don't flaunt an Android." Mathur switched to a new iPhone 4s from a Nexus 4. An iPhone 5s back then would cost Rs 53,500 – way too expensive, "but the 4s is still an upgrade," he said. Apple India is reaping benefits for its marketing strategy with a 400% growth in sales according to Apple Insider.
Or the Chinese way – absolute value for money
There are two kinds of buyers, the ones who pursue excellence, or the ones who pursue value for money. The Indian market is most certainly driven by the latter. For the masses in the Indian market, every paisa counts. If the Samsung Galaxy S6 is available for Rs 48000, a major portion of that price goes towards features that will probably never be used by customers. Sure, there's a heart rate monitor in the Samsung Galaxy S6, but Xiaomi offers the base features at close to one-fourth the price. And there's a great deal of aggression in its promotion on ecommerce sites. For Rs 999, you could also get yourself a wearable device that helps you keep track of your health regime. A heartbeat monitor is best left to the professionals, we reckon. Unless, a super-rich display and some extra graphic capabilities is the only reason to pay a premium, a fair share of features is accessible at 30 percent of the price of a Samsung Galaxy S6. It isn’t surprising then, to see flash sales on ecommerce portals being exhausted in seconds – first in 7 seconds, and then in 15 seconds!
What about Samsung?
Which brings us to Samsung. Influential yes, but getting increasingly expensive. Within the fragmented Android ecosystem, you stand against the likes of Google Nexus devices that enjoy the latest updates and assurance of being supported by Google, at least on the software front. To target the budget conscious, there’s also Android One. Samsung’s response being Tizen, which certainly didn’t take off too well. And then there’s the risk of cannibalising the sales of any of the bouquet of devices across price points.
Benchmark devices from Samsung have come at a premium, with gradual drop in prices over the shelf life of the phone. However, with the Samsung Galaxy S6 and the S6 Edge, the price drop was swift. In just 2 months since its launch, the price of the Samsung Galaxy S6 has settled around Rs 39,000 on popular online stores. Whether this push is from Samsung or not, the benefit is available to the customer, indicating a drop in demand. The ideal way forward seems to be a more affordable initial price with a gradual drop over the subsequent years. These are certainly exciting times for mobility and internet-connected devices and pricing will play a vital role not just for Samsung, but the ecosystem as a whole.