Samsung has categorically said last year that it will decrease the number of phone models being made available in the market by 25 to 30%. Gsmarena tracked every phone model that Samsung put out this year and calculations revealed that 2014 saw a total of 54 new Samsung phones but the 2015’s number was 36. 18 less phone models when both the years are compared. A 33% decrease.
But why did Samsung take this decision?
It wasn’t that Samsung didn’t want to flood the market with various phone models, but rather this decision was a strategy to reduce the losses incurred by the unsold inventory and management/procurement of components. Samsung actually used the same components in more number of phone models thus decreasing the number of components to be procured. It instead relied on gathering more of the same components.
But flagships are where the real money is hidden. An average flagship will cost Samsung about $230 to assemble but will sell for as much as $800. Samsung used the same components such as the exynos 5420 soc in all its flagships for 2015 thus decreasing the capital investment yet making many phones models available for a reduced price. for this reason, Samsung is cutting the low end and mid ranged phones and increasing the flagships drastically.
Number of Samsung flagships: 2010 - 1 2011 - 2 2012 - 2 2013 - 2 2014 - 3 2015 - 4 2016 - 5+ (rumored)
— Evan Blass (@evleaks) December 14, 2015
Samsung was also wise enough to differentiate its phones. Previous year saw different Samsung phones cannibalize each other in too many categories. For example, the entry level j series phone cut into the sales of e series phone. The galaxy s5 sales were cannibalized by the note 4 phone models.
Yet this seems to have made no difference to the consumer as the slide continues. Samsung has also changed it leadership for the mobile division but the desired results are yet to be seen. Let us hope that Samsung finds its lost glory in the 2016 with the phones that are being developed in its labs.