Samsung Cuts Price of New Phones, Speeds Up Release

Published on 2015/08/23 | Source

Samsung has sped up the release date of its latest strategic smartphones while lowering their prices by more than W100,000 (US$1=W1,191).

The move aims to counter the launch of Apple's new iPhone in September and boost sales in a saturated market.

Samsung began selling the Galaxy Note 5 and S6 Edge Plus in Korea on Thursday. The Galaxy Note 5 costs W899,000 for the 32 GM model and the S6 Edge Plus W940,000.

With a large screen and stylus pen, the Galaxy Note series has been Samsung's most expensive smartphone line. But where predecessors cost more than W1 million, the Galaxy Note 5 has been priced at around W900,000.

The S6 Edge Plus is also cheaper even though it has greater capacity and a larger screen than its predecessor, the S6 Edge.

The Galaxy Note 4 was unveiled on Sept. 3 and sales began on Sept. 26 last year. But the Note 5 was unveiled on Aug. 12 and sales began just eight days later.

Lee Sang-cheol, head of mobile marketing at Samsung, said the company moved up the planning, development, production and marketing while attempting to "meet the needs of customers" in terms of price.

But Samsung faces the dilemma of balancing sales volume and profitability. Operating on much smaller margins than rival Apple, Samsung's profitability could suffer if it does not sell enough of the devices. And it is uncertain how much volume growth can be achieved now that competition in the low-end segment is heating up as Chinese smartphones get better.

Yoo Eui-hyung, an analyst with Dongbu Securities, said, "Chinese manufacturers are rolling out premium smartphones with similar functions for US$300 to 400, so it's not easy for Samsung to create a major stir with new products".

The market for premium smartphones in Korea has become saturated. One office worker said, "There are many other smartphones available these days so the Galaxy Note 5 or S6 Edge Plus aren't particularly appealing. I think they're too expensive".

The Galaxy Note 5 is similar to the Note 4 in terms of hardware specs.