Samsung Electronics and LG Electronics are implementing different approaches to entry-level budget smartphones.
Samsung has been launching more competitive affordable smartphones with new features to stem its falling global market share, while LG is trimming down its lineups.
Company officials and analysts said Samsung, the world’s biggest smartphone maker, has to focus on its budget phones in order to rescue its falling share in the global market while LG is trying to minimize its loss by decreasing the number of entry-level affordable smartphones they produce.
Samsung added it was time to focus more on the budget smartphone market as the premium smartphone market has been facing slow growth due to the maturing of the smartphone industry.
Budget and mid-range smartphone markets are flooded with many potential due to the rise of Chinese smartphone makers.
Samsung said it is trying to apply more premium-like technologies to its budget smartphones. It recently unveiled the 6.7-inch Galaxy A70 and Galaxy A80, budget smartphones targeting consumers in Southeast Asia. Especially, the Galaxy A80 is receiving consumer attention for featuring a slide-up rotating camera.
Samsung is also trying to raise its falling market share in China as the firm has struggled with its smartphone business there with more Chinese consumers turning to domestically-produced smartphones.
To woo more consumer attention, the firm released a budget smartphone the Galaxy A8 featuring its hole-punch display technology called Infinity O in December 2018. The O-shaped hole on the front for a camera and sensors, the smartphone offers fully bezel-less display. The technology was also applied to the firm’s latest premium smartphone the Galaxy S10.
The firm also said it recently decided to drop the Galaxy J series, which has been the entry-level smartphone of the firm, and merge it with the A series.
“Samsung is merging the J series with the A series because the A series phones have been received well by consumers even though both the J series and the A series are categorized as affordable smartphones and the price differences between the two are very small,” a Samsung official said.
“The Galaxy A70 and A80 have specialized camera features. With those budget smartphones we are aiming to attract more millennial consumers who enjoy live-streaming via YouTube or Instagram.
The official added chances are slim that the firm would face cannibalization between the two products as the Galaxy S series, which is the firm’s premium smartphone lineup, has better features compared to the A80. Though the price tag of the phone is not decided yet, Samsung said it will be sold for around $600.
LG is trimming down its smartphone lineup. Though the firm has released numerous kinds of budget smartphones it started to reorganize its budget phone array since 2018.
“Besides the premium smartphone lineups such as the G and the V series, we have entry-level smartphones such as the Q and the K series. We are trying to reorganize our budget smartphone lineups to meet with consumer needs more effectively,” an LG official said.
“For consumers who are looking for affordable smartphones, we are trying to apply some of the latest features that our premium smartphones have to the budget smartphones. For instance, some of our budget smartphones have enhanced sound system featured that only premium smartphones had.”
The official said another strength of LG’s budget smartphones is they all have LG Pay mobile payment system. “Consumers who bought the entry-level smartphones can also use the mobile payment system as every LG budget phone has LG Pay feature,” the official said.
An analyst said both Samsung and LG are trying to concentrating on budget smartphone markets because premium smartphone market is growing slowly while they are losing shares in premium smartphone market.
“The smartphone market is similar to auto industry in a way. Phone makers can make more profits with premium smartphones but it is hard for them to raise their market share with those smartphones that are priced over $800. In contrast, concentrating on budget smartphone market helps them to raise their market share,” said an IT columnist Ham Young-min.
“LG has been struggling to regain its lost brand value in smartphones due to strong dominance of Chinese phone makers such as Huawei, Oppo, Vivo and Xiaomi in global smartphone market. As it has been a while that LG’s smartphone business has been in the red, the firm has to concentrate on minimizing its loss by decreasing the number of smartphones,” he said.
“For Samsung, the firm is run after Apple and Huawei in terms of global market share. To retain its status as the world’s biggest smartphone maker, the firm has to try to meet with different kinds of market demands in emerging markets such as China, India and Southeast Asia. The firm’s effort can be seen in the Galaxy A80 that has a slide-up rotating camera, which can be regarded as an attractive feature to many consumers.”