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Manufacturers Plan To Help Disappointing 2015 Sales

June 30, 2015 - Written By David Steele

2015’s crop of flagship smartphones has shown the world the best smartphone products from the leading manufacturers. We’ve seen brilliant design combined with better and better optics, higher resolution screens, more and more powerful 64-bit, multi-core processors, more and more system RAM and an increasing number of sensors. Unfortunately, sales of flagship devices have not been as high as had been hoped for. The industry is expecting the HTC One M9, Samsung Galaxy S6 and LG G4 to undershoot their respective manufacturers’ sales hopes. One potential exception to the above appears to be Apple, where the launch of a new ‘phone is met with excitement, careful hunger marketing and throngs of people who cannot imagine life without the latest iPhone in their life.

There are a few reasons why current flagship devices may be underselling their targets. One reason is that, whilst the on-box specifications are showing an improvement from the previous year, the benefit to customers is less and less with each generation. To show one example, the difference between a 720p resolution display and a 1080p display is noticeable, but the difference between a 1080p to a 1440p display is less obvious to many people until you start using the device for virtual reality purposes (and of course, the display is an inch from your eye). Moving from a 2011 Samsung Galaxy S2’s 4.3-inch screen to the 2013 Samsung Galaxy S4’s 5.0-inch display gives the customer a big increase in screen size, but 2015 devices have a screen around and about the same size. Prices, however, have continued to rise across the range, meaning that a 2015 mid-range device is often similar to a 2013 flagship in terms of cost but has more features. Mid-range models realize a business less profits and because of this, a number of Korean investment experts have reduced profit forecasts for the Korean manufacturers, LG and Samsung.

Of course, manufacturers are not taking these disappointing sales figures lying down. We are seeing rumors that Samsung are to release a Galaxy S6 Plus featuring improved specification and that the Note 5 will feature a similar design to the S6, but will come with a 4K screen. We are seeing rumors that LG are working on a new premium phone, believed to include the new Qualcomm Snapdragon 820 processor and 4 GB of high-performance RAM. Will increasing smartphone specifications still further help sales? It might, but there is likely to be another increase in smartphone pricing too. In the developed smartphone world, most sales now come from upgrading customers, where they are looking for something better than what they had before. In the developing world, customers are more price sensitive. Perhaps it’s time manufacturers stopped treating these two worlds as completely separate?