Samsung is relying on the mid-range segment to drive growth.
Samsung posted a record $7.8 billion operating profit in Q4 2016, but it looks like the company isn’t making as much money from high-end devices as it previously used to. In a report published today, The Investor shared findings from South Korean investment fund Hana Financial Investment, which stated that the revenue from high-end smartphones accounted for just 29% of Samsung’s global sales in Q1 2017. That’s down from the 40% the company enjoyed in 2015 on the back of the Galaxy S4.
Market research firm Strategy Analytics noted that the average selling price of Samsung phones in 2016 was $232 globally, down from $289 in 2015. It’s no secret that the smartphone segment is plateauing in developed markets, and as a result Samsung is increasingly looking to India and China to drive growth.
Samsung noted “improved profitability” in the entry-level and mid-range segment in Q4 2016, and the company is looking to boost the competitiveness of its budget offerings by introducing features that were previously limited to the high-end segment. Case in point: the Galaxy A 2017 series now comes with water resistance and 16MP cameras. The Galaxy J series — Samsung’s best-selling lineup in India — is also set to pick up new features for 2017.
Samsung will be hoping to increase revenue from high-end devices in the coming quarters, which will undoubtedly be aided by the release of the Galaxy S8 and S8 Plus.