Samsung Takes Risk Hoping for High Reward
It’s no secret to consumers that the price points for smartphones and other mobile devices are climbing rapidly. People complained, but millions still went out and bought the latest and greatest handsets, even as prices climbed over $1,000. Then, COVID-19 hit, and an economic downturn followed. Many people didn’t have the extra cash on hand to buy a new phone, especially one that expensive.
Seeing the need for other options, both Apple and Google released phones with a sub-$400 price point. Their biggest competitor, Samsung, is going in the other direction. The latest Galaxy phones, Samsung’s top-of-the-line smartphone handsets, are hitting the market with four-figure price points, from $1,000 to $1,300 each. While, again, these price points may not have caused many people to blink a year or two ago, some are saying this is a consumer PR risk right now.
Samsung, though, needs something to jolt its falling smartphone sales, and the company hopes going with bells and whistles over bargain buys is the right move. Speaking about the decision, TM Roh, president of Samsung’s mobile communications department, said, “We know these are challenging times, and people are depending on technology more than ever…”
That’s an interesting PR tactic, looking past the financial reality and touting the utilitarian benefits in an effort to shift the thinking of the market. Roh added that he hopes the phones will help people “play harder when maybe they should be working harder…”
That line, stripped of context by the media reporting on this story, might not land as well as Roh might have intended. Clearly, he wants to poke at the idea that it’s easy to get distracted when working from home, but with many customers facing serious financial hardship, that kind of joke may end up looking, to many, like misreading the room.
Then again, bold moves such as these have paid off for brands in the past. Going against the grain and challenging the direction of the market, might be exactly what Samsung needs to get that energizing shot in the arm.
The key element that will make or break this effort will be the message and how it’s communicated. If Samsung is targeting people who have both the means and the intentions of spending four figures on a phone, they need to know who these people are and what they want to hear. There is no doubt that, statistically, there are people out there doing fine right now, despite the pandemic, and these people likely need smartphones. Samsung needs to find these people and give them a clear, concise, and compelling reason to love their new phones enough to trade out of trade up.
Should Samsung’s communications work and their risk pay off, it could provide a game plan for Apple, who is expected to introduce the next wave of higher-end iPhones in the coming months. The question, then, will be how well will Samsung hold on to the market they serve by getting in first.