Any marketer worth his weight will tell you that there’s always a market for super-expensive products. Case and point: The iPhone. Even though it launched at six hundred dollars, people flocked to buy it. This has sprung a bevy of similar phones from other providers, as they knew that there was a market for ridiculously expensive handsets. Samsung sees the trend moving away from these phones, to a degree, during 2008. As someone not directly involved with Samsung, I can pin some of this forecast on the current economic state of the country. The high-end phones are out there on the market, and soon it will be saturated. Now it’s time to fill out the rest of the landscape.
Samsung predicts that phones costing under $100 will account for 40 percent of its sales in 2008. This is up from 37 percent in 2007. It might not seem like a huge increase, but when you’re talking millions and millions of phones being sold, it starts to add up.
This, of course, doesn’t bode well for Samsung’s profit margins. They don’t make as much off lower-end phones, so they’re going to “try to limit the trend.” How they’re going to do that, I have no idea. Are they going to limit the supply of these under-$100 phones? I don’t see that working too well. People aren’t necessarily going to buy a higher-end Samsung phone if they were looking for something cheaper. More likely, they’ll buy a cheap handset from another manufacturer.
This can also be attributed to the development of Android, an open-source mobile phone operating system that will work with personal handsets as well as smartphones. However, since Android won’t see action until the second half of this year, I’m not sure if Samsung is really considering it or not.
But in any event, look for Samsung to develop a number of cheaper phones this year.
[Reuters]
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