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It's vital to win at the top end, says Samsung

25 October 2013, 11:35Duncan Alfreds

Cape Town - It is vital to maintain the lead in the premium smartphone market in order to capitalise on a growing market share, a major manufacturer has said.

"The premium Smart segment is important because it sets the trend for leadership in terms of hardware, ecosystem and creates a halo effect across the total smartphone market, in helping to create an aspirational brand," Craige Fleischer, director of Mobile Communications at Samsung Electronics SA told News24.

His comments highlight the competitive nature of the mobile phone market where manufacturers vie not only for market share, but also for consumer brand recognition.

Samsung has emerged as the leading global mobile phone manufacturer, and even though not every customer can afford the top-of-the-range Galaxy S4, the brand is widely marketed.


Fleischer said that the company offers phones at various price points to ensure maximum exposure to consumers.

"At Samsung we offer a range of mobile options that include varied form factors, screen sizes and different processors to cater for all segments of the smartphone market."

This strategy is in opposition to competitor Apple which produces premium devices.

Even though the California-based company recently launch the iPhone 5c as a budget device, it has already cut production orders from Asian suppliers as demand for the device has been soft.

South Africans' adoption of smartphones has been hamstrung by the cost of devices as well as the cost of data.

Part of the reason for the runaway success of the BlackBerry brand in SA has been because of the BIS value proposition where users pay a flat rate for data.

Samsung has been on a marketing offensive to increase its market share among South Africans.

Closing market

"Winning in the premium segment creates a brand that consumers strive to own and even though they may not be able to afford the premium set, we give them the best possible experience in a price segment that they can afford," said Fleischer.

The company markets smartphones in the budget segment starting with the Galaxy Pocket at under R900 to the Galaxy Note 3 at around R9 899, though most customers will purchase devices on mobile contracts.

"We are acutely aware that not all consumers are able to afford the most premium smartphones we offer, we understand that South Africa is still predominantly prepaid and consumers are purchasing hardware either cash or on terms over a limited time frame," Fleischer said.

Companies like LG, Huawei and ZTE don't generally produce devices in the premium segment of the market, but offer features that consumers desire at lower price points.

LG's Optimus G Pro sports NFC technology, a 13 megapixel camera, and is powered by a 1.7GHz quad core processor. The Huawei Ascend P6 doesn't support LTE networks like the Optimus, but has a 1.5GHz quad core processor and weighs only 120g.

Both of those devices ship with Google Android 4 (Jelly Bean) operating system at prices significantly lower than the premium smartphones from bigger brands.

Market share

The market for top-end smartphones, though may be closing as consumers opt for functionality over brand.

Research by Gartner revealed that mid-tier handsets may dominate in the future as cost becomes more of a determining factor in the consumer buying decisions.

"Growth is expected to come from mid-tier smartphones in mature markets and low-end Android smartphones in emerging markets," Gartner said.

Fleischer generally agreed with this view, saying that it wants to push market share at a range of price points.

"As the global and South African smartphone penetration grows, opportunities in entry and mid-tier smartphones will continue to increase. Samsung will look to ensure that regardless of affordability consumers will have access to a Samsung device; hopefully these will all be smartphones."

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