Samsung Electronics Co. is unlikely to release an A7 model this year as the South Korean tech giant is shifting its business focus to premium and low-end segments while removing mid-priced smartphones.
Samsung is not considering launching a new A7 series, placed near the top end of its budget smartphones, because consumers are increasingly choosing either high-end models or very cheap ones as income polarization intensifies, sources said on Tuesday.
Samsung, the world’s largest smartphone maker by volume, has been releasing new Galaxy A series models, targeting price-conscious customers looking for affordable smartphones packed with advanced features.
The A7 models are placed between the premium Galaxy S and Z series and low-end smartphones A1 to A5.
According to market research firm Omdia, Samsung has sold 12.5 million units of the Galaxy A71 model since its launch in 2019. But the sale of its follow-up model, the A73, unveiled last year, has dropped to a mere 3 million units.
Galaxy Z Flip4 smartphones in Purple, Blue, Pink Gold and Graphite “Redistribution of the average will be the trend of this year,” Kim Rando, a consumer science professor at Seoul National University, said in his latest book, Trend Korea 2023.
“As the economic slowdown accelerates, consumers won’t open their wallets easily as the market becomes polarized and fragmented,” he said.
Samsung’s Galaxy A series models have been popular in emerging markets such as Latin America, India and other Southeast Asian countries, contributing to the company’s market leadership.
APPLE TO CANCEL iPHONE SE4 LAUNCH
Apple Inc., which is leading the premium smartphone segment, also appears to be dropping its plan to launch its latest version of the iPhone SE, equivalent to Samsung’s Galaxy A series.
Earlier this year, TF International Securities analyst Ming-Chi Kuo said in a blog post that Apple has told suppliers the "production and shipment plans for the 2024 iPhone SE 4 have been canceled rather than delayed."
With its SE series smartphones, Apple has offered consumers an affordable way to buy an iPhone.
Apple's iPhone 14, Pro and Pro Max smartphones Analysts say Samsung and Apple are focusing on high-end models as consumers are willing to pay more to buy top-notch products offering high performance and chic design.
In the Southeast Asian market, shipments of premium smartphones priced at $400 and above increased 29% in the third quarter of 2022 from the year-earlier period. In the same market, Apple’s high-end model, iPhone 14 Pro Max, with a price tag of $999, was among its best-selling smartphones.
While launching its fourth-generation foldable phones – new additions to its high-end line of Galaxy Z Fold and Z Flip phones – Samsung’s mobile business chief TM Roh said last August that foldable smartphones will go mainstream soon.
According to market tracker TrendForce, global shipments of foldable smartphones are forecast to rise to 18.5 million units this year, up 44.5% from last year’s 12.8 million.
Samsung's Galaxy A series smartphones TV MARKET ALSO GOES HIGH-END
The TV market is no exception.
Despite the overall TV market slump, shipments of ultra-large premium TVs of 70 inches or larger are projected to rise 11% year-on-year to 16.27 million units this year, according to industry analysts.
In the first quarter, Samsung plans to launch the premium lineup in the European market, including France, Germany and the UK, and take the products to the North American and Southeast Asian markets by year-end.
Samsung’s crosstown rival, LG Electronics Inc., showcased a series of its minimalist-concept, high-end electronics products at CES 2023.
“Consumer polarization will remain for a considerable period. We need to zero in on target segments rather than the broader market for all consumers,” said an industry official.
Write to Jeong-Soo Hwang at hjs@hankyung.com In-Soo Nam edited this article.
