“Large-screen smartphones have become an important segment in the smartphone category, with no company benefiting more from the sales of these ‘phablets’ than Samsung,” Bill Shamblin writes for The Motley Fool. “But Samsung’s decision to offer these displays on a large number of models across pricing tiers is making it increasingly difficult for the Korean conglomerate to differentiate its high-margin, premium devices from its lower-priced smartphones.”
“A recent Canalys report noted a trend showing demand for larger displays shifting to premium smartphones. But, despite the company’s dominance in the large-screen smartphone category, Samsung may be missing the boat. In Samsung’s most recent quarter, the company reported slowing demand for its premium smartphones. And despite increases in total smartphone shipments, profits for the company’s mobile business actually declined,” Shamblin writes. “What Samsung failed to realize: When larger displays are reserved for premium devices, the high value of the feature can be used to support a company’s premium pricing tier and help buyers quickly identify a company’s flagship products.”
“The iPhone 6, with an anticipated 4.7-inch screen, is expected to have a subsidized starting price of $299 on a two-year contract — a $100 increase over the iPhone 5s,” Shamblin writes. “The history of iPhone sales indicates the new pricing strategy has a good chance for success. With the 2013 introduction of the iPhone 5s and iPhone 5c, Apple discovered that iPhone buyers chose the higher-priced iPhone 5s at rates that exceeded the company’s expectations. The proclivity of iPhone buyers to ‘trade-up’ in price is allowing Apple the opportunity to test a new ‘super-premium’ iPhone pricing tier.”
Read more in the full article here.
[Thanks to MacDailyNews Reader “Mr. T” for the heads up.]