Samsung’s first quarter net profit has dropped sharply by 39 percent. It seems the bigger iPhones and the smaller mobile manufacturers had an impact on Samsung’s profit. The company recently launched the Galaxy S6 and the S6 Edge and are counting on it. Incidentally Samsung still holds the title of world’s top smartphone maker.
When it comes to buying a mobile phone, there are many options available in the market. Most of the manufacturers are using the same chipset (with slightly different features) and that has lead to heavy completion with respect to the price tag.
Samsung has to compete with big brands like Apple as well as smaller brands like Xiaomi, Micromax and even Lenovo / Motorola. Now if Samsung wants to compete with Apple they need to use unique hardware like the one (Exynos) used on Samsung Galaxy S6 and the S6 Edge.
If the smartphone is loaded with unique powerful hardware, there will hardly be any completion with reference to the price. But if the smartphone is using a known hardware like MediaTek or Qualcomm that can be used / already used by other manufacturers, it will lead to a price war.
Xiaomi, Yu Yureka, Lenovo for example are offering the same hardware at a much, much lower price and Samsung devices with the same hardware when compared with these manufacturers are way, way overpriced. That’s a huge price difference, even though Samsung’s build quality might be better and the phone may come with additional features (AMOLED screen etc) but still processor / GPU is the same.
If Samsung is using the chipset that is not unique / that is available to other manufacturers they really need to bring the price down, just like Lenovo, Lenovo A6000, A6000 plus and the A7000 are doing really well.
And to compete with Apple devices in terms of price / hardware they need to come up with something unique and as powerful.