Will Galaxy Note 3 recover from poor performance in Korean market?
Samsung Electronics’ rising star for the second half of the year, ‘Galaxy Note 3’ will be released in Korea on the 25th. Galaxy Note 3 is drawing attention as to whether it will revive domestic smartphone market, which fell into stagnation, by recovering from the poor performance of Galaxy S4 released in the first half of the year. However, influenced by crackdown on subsidy payment, the market is still sluggish. In addition, the high factory price of over KRW 1 million is a burden for consumers.
On the 25th, Samsung Electronics will hold a media day at its office building in Seocho-dong and release Galaxy Note 3 and Galaxy Gear into the Korean market. Mobile common carriers will also begin selling these models from the 25th.
Samsung Electronics and the industry hope that Galaxy Note 3 will bring energy back to the stagnated domestic smartphone market. The strengthened crackdown on smartphone subsidies that began earlier this year has influenced the domestic smartphone market to be reduced in scale by 20 – 30% from last year. The amount of service opening dropped from around 2 million phones a month last year to 1.5 million a month this year. Accordingly, the industry anticipates that products with powerful ripple effects will be released, and thus activate the market.
Samsung Electronics also anticipates that Galaxy Note 3 will make up for the weak performance of Galaxy S4, the company’s strategic product for the first half of the year that ended up producing a disappointing result. Samsung Electronics’ domestic market share dropped slightly from last year. However, it is a different story in substance. Most of the products the company released last year were premium level products, such as Galaxy S3 and Galaxy Note 2. However, this year, Samsung Electronics defended its market share decrease by releasing a variety of products ranging from Galaxy Golden, Galaxy Mega and Galaxy S4 Mini to Galaxy S4. Resultantly, it is analyzed that the company’s profitability has dropped significantly.
However, it is not certain if Galaxy Note 3 will produce the anticipated performance. The market response is not as good, either. The three common carriers received Galaxy Note 3 service prescriptions from the 11th to the 15th and the result was rather disappointing. In general, a product is publicized actively to increase sales effects following its release if the result of subscription sale is good. However, Samsung Electronics is not disclosing the amount of subscription sale for Galaxy Note 3.
“(Performance evaluation) would be different according to the criteria applied. However, the subscription sale of Galaxy Note 3 did not create a great sensation,” said a common carrier insider. “It may appear to be relatively weaker in performance because the previous Galaxy Note models were sold so well.”
The high factory price is also a burden. Galaxy Note 3’s factory price is KRW 1.067 million, which is the highest of the products released this year. The factory price of most premium-level smartphones released this year is formed around KRW 800,000 – 900,000 as a result of the impact of the reduced subsidies. As smartphone specifications become upwardly leveled, customers are more sensitive to price than performance. Accordingly, a resistance to the high factory price is forecast.
On the 25th, Samsung Electronics will hold a media day at its office building in Seocho-dong and release Galaxy Note 3 and Galaxy Gear into the Korean market. Mobile common carriers will also begin selling these models from the 25th.
Samsung Electronics and the industry hope that Galaxy Note 3 will bring energy back to the stagnated domestic smartphone market. The strengthened crackdown on smartphone subsidies that began earlier this year has influenced the domestic smartphone market to be reduced in scale by 20 – 30% from last year. The amount of service opening dropped from around 2 million phones a month last year to 1.5 million a month this year. Accordingly, the industry anticipates that products with powerful ripple effects will be released, and thus activate the market.
Samsung Electronics also anticipates that Galaxy Note 3 will make up for the weak performance of Galaxy S4, the company’s strategic product for the first half of the year that ended up producing a disappointing result. Samsung Electronics’ domestic market share dropped slightly from last year. However, it is a different story in substance. Most of the products the company released last year were premium level products, such as Galaxy S3 and Galaxy Note 2. However, this year, Samsung Electronics defended its market share decrease by releasing a variety of products ranging from Galaxy Golden, Galaxy Mega and Galaxy S4 Mini to Galaxy S4. Resultantly, it is analyzed that the company’s profitability has dropped significantly.
However, it is not certain if Galaxy Note 3 will produce the anticipated performance. The market response is not as good, either. The three common carriers received Galaxy Note 3 service prescriptions from the 11th to the 15th and the result was rather disappointing. In general, a product is publicized actively to increase sales effects following its release if the result of subscription sale is good. However, Samsung Electronics is not disclosing the amount of subscription sale for Galaxy Note 3.
“(Performance evaluation) would be different according to the criteria applied. However, the subscription sale of Galaxy Note 3 did not create a great sensation,” said a common carrier insider. “It may appear to be relatively weaker in performance because the previous Galaxy Note models were sold so well.”
The high factory price is also a burden. Galaxy Note 3’s factory price is KRW 1.067 million, which is the highest of the products released this year. The factory price of most premium-level smartphones released this year is formed around KRW 800,000 – 900,000 as a result of the impact of the reduced subsidies. As smartphone specifications become upwardly leveled, customers are more sensitive to price than performance. Accordingly, a resistance to the high factory price is forecast.
Posts
No comments: