According to details, Samsung has found a way to sell more phones, but in doing so is making less money than in previous years. This seems to be a contradictory statement. However, why is it in fact that Samsung could sell more of their phones, but end up losing money in the long run?
WHY IS SAMSUNG NOT MAKING MORE MONEY?
Some of you who are reading this article and asking this question to yourself have probably already realized why Samsung is making less money. It’s because in order for Samsung to sell more phones they had to drop the price of their smartphones. According to the numbers provided by data firm Counterpoint Technology Market Research, Samsung has been selling cheaper smartphones and less high-end premium devices than they did in previous years. Counterpoint went on to state, “Samsung shipped 84 million smartphones in the third quarter of 2015 which was more than Apple and Huawei Technologies combined during that same stretch.” That is a very shocking statistic when it is realized that Apple and Huawei are as popular as Samsung. Counterpoint continued by saying that Samsung’s smartphones priced at $300 were making them only 40 percent of their total sales and that now Samsung is shipping around 40 percent of their smartphones at $200. Samsung is sure making their customers happy with less expensive smartphones and they are sure making a lot more, but is it a smart business strategy?
IS THIS SMART?
This question is very difficult to answer and probably requires multiple perspectives. On one hand Samsung is shipping out and selling a lot of their phones and maintaining their already amazing popularity. However, on the other hand giving the numbers by Counterpoint Samsung is losing around $100 per phone that they are selling. As stated previously, customers will probably not complain as they get to buy a Samsung smartphone at a cheaper price. However, the contrary to that is because Samsung cut the price of their smartphones they could potentially make their smartphones with cheaper material and overall less capabilities. This is a question that can be answered several different ways, but one thing that is for certain is that Samsung will remain an elite phone making company that will find a way to stay successful. However, it is indeed interesting to think about where Samsung will be after this.
