Samsung is selling a lot of (budget) smartphones
Samsung may have just posted some positive growth in its smartphones unit. But as Samsung’s own earnings report told us, a lot of those smartphones came from the mid-range Galaxy A, J and O (or On) lineups. Furthermore, while the company was able to popularize the Galaxy S6 edge and Galaxy S6, the latter wasn’t going to make much in terms of returns because of a price cut.
And thus, the scrutiny has been in this lower bunk of the price bin, with a new report from Counterpoint Technology Market Research.
As a reminder, the chaebol reported that it moved 84.5 million handsets this quarter, but the price-per-unit dissection is interesting:
- 40 percent of units were priced at or more than $301 (compared to 55 percent during Q3 last year)
- 38 percent of units were priced at or less than $200 (compared to 30 percent)
Report analysis goes into how Samsung may be defending market share in the face of the hyper-competitive budget sector, fending off Chinese OEMs like Huawei, Xiaomi and OPPO. Specifically, the J series of phones (the earnings report mentions the Galaxy J5) have seen success in physical distribution, including at retail and resales outlets.
Further analysis goes to Samsung’s profit margins from the mobile unit, as it struggles to make double-digit percentages. But with the climb of Apple and its high-margin exports, Samsung has to wonder how it can compete from the upper end as well.
Samsung does not want to be squeezed up and down the line.