It’s no surprise that Chinese manufacturers in nearly every segment of the market generally rely on providing similar products for considerably lower prices. It’s been the way of Chinese products for a long time now and it moved over into the smartphone arena quite easily when China picked up as a major smartphone provider just a few years ago. 2014 was a renaissance for Chinese smartphone manufacturers without a doubt and because of this we saw the marketshare of huge companies like Samsung fall like a rock. Going from 1st place in essentially every market in the world down to 5th place in China now, Samsung isn’t satisfied with this trend and is working on a strategy that’s aimed to get them back up there in those rankings.
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So why beat them when you can join them? That seems to be the name of the game in Samsung’s latest move in China specifically, where they’re cutting the prices of the Galaxy S6 and Galaxy S6 Edge about 15% a piece. That equates to a 800 Yuan ($129) decrease in price for both phones, which isn’t actually quite the same percentage for both devices. This takes the 32GB Galaxy S6 down from 5,288 Yuan ($850) to 4,448 Yuan ($722), and the 32GB Galaxy S6 Edge down from 6,088 Yuan ($979) to 5,288 Yuan ($850). These price drops come only four months after the initial launch of both devices and have created an important landmark in the world of smartphone pricing. It remains to be seen whether or not this is enough to jump Samsung up in the rankings or if the South Korean tech giant needs to further drop prices on its most popular models.
The biggest problem is not just from random Chinese startups undercutting Samsung’s business model, a problem that’s certainly there, but from rivals like LG, Huawei and Lenovo who have managed to increase their marketshare in the same time period. Both Huawei and Lenovo are Chinese based companies that specialize in less expensive smartphones that offer comparable performance and features to Samsung’s phones, albeit maybe a cheaper build or other concessions that consumers are finding to be less important. At the end of the day many Chinese smartphones have become good enough for consumers, especially at sub-$200 price points off contract and unlocked, and many consumers are turning their eyes toward those companies rather than the big flashy flagships.