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Samsung straddles both ends of the smartphone business

business Updated: Apr 04, 2013 23:27 IST
Vivek Sinha
Vivek Sinha
Hindustan Times
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Last month, Samsung grabbed global attention when it unveiled the highly anticipated Galaxy S4 smartphone loaded with features that allowed phone operation through hand gestures, clearly throwing a challenge to Apple’s iPhone 5 as a challenger in the premium category smartphones with cutting-edge features.

But then, amid this din on high-end gadgets, the Korean giant has been silently and steadily making inroads into the bottom of India’s market pyramid — with sub-Rs 10,000 handsets. Braving competition from Finnish giant Nokia and other local manufacturers, Samsung is moving as an ambitious, aggressive player in both the entry-level smartphone and feature phone categories.

According to market research firm GfK, Samsung commands a market share of around 42% in the Rs 5,000 to 10,000 price band for handsets in India. The company had sold around 10 million Galaxy smartphones till December 2012 in the country. Sales are still strong. If offers upto 15 handset models that include entry-level Galaxy smartphones in the sub-Rs 10,000 category. Yet the company appears in no mood to rest. In February this year Samsung launched its REX series phones in India in the sub-Rs 5000 category and Metro Series above the Rs 5,500 price band.

Thanks to its extremely aggressive branding and pricing strategy, people across social strata can now flaunt Samsung phones.

However, there is a big question. Does it dilute the premium brand image if the owner of a luxury car and his driver both sport a Samsung smartphone?

Market analyts say for all the utilities that a smartphone may offer it is also associated with an elite image. “When you are everything to everybody then you are nothing to anyone,” said Harish Bijoor a Bangalore-based brand consultant. He said unlike Samsung, Apple does have a purist brand approach and carries a “snob value”.

Samsung strongly refutes suggestions that touching various price levels will dilute its brand value. “We want to fuel smartphone growth in India with devices across various points, so that even when existing Galaxy users upgrade, they upgrade to the next Galaxy,” said Asim Warsi, vice-president at Samsung Mobiles.

Ramesh Jude Thomas, president of Equitor Value Advisory said that despite its price range, Samsung had successfully created a sub-brand with Galaxy and subsequently the S-series in that category. “Brand weight for the smartphone has moved from Samsung to Galaxy and now to the S-series.” While others failed to create a sub-brand, Samsung has been successful, he said.

The one-brand-many-faces strategy was reflected in a recent remark by JK Shin, Samsung’s president, who said that the firm was committed to developing the best possible mobile solutions to suit all lifestyles and budgets.