In an effort to strengthen its control over the smartphone market Samsung Electronics Co Ltd (KRX:005930) is planning to merge its Galaxy Note and Galaxy S Plus line of smartphones. The move will apparently help the Korean electronics giant to reduce production cost and increase the profit as well.
A report by the South Korean outlet The Bell mentioned that Samsung has intentions of merging its two major smartphone series. Even though there have been no official declarations regarding the same, reports suggest that some strong internal sources have put their weight behind the information. It is being said that proposal was tabled by Samsung Group’s Vice Chairman Jay Y. Lee himself.
Merge Galaxy Note And Galaxy S Plus: Killing Competition
The Samsung Galaxy S Plus and Samsung Galaxy Note lineups are almost similar in product specifications. The only difference between the two is that the Note series offers the S Pen and a few different software specifications. The Galaxy Note lineup just has bigger screen size. But with the Galaxy S series offering the Plus model the difference is also eliminated.
Amid to the declining sales, the company has been having trouble earning substantial revenue as well as profits with the two sperate flagships of these two lineups year after year, with them being almost similar.
In Q2 2015, Samsung sold 19.9 million units of Galaxy S6. A year later, the sales of Galaxy S7 – the successor of Galaxy S6 – declined to 15.7 million units during the same quarter. Though the sales of Galaxy S8 – launched in 2017 – improved to 18.7 million units in Q2 2017, this year has been the worst performing for Samsung as the sales of Galaxy S9 took a nosedive in Q2 2018, to just 9 million units.
Samsung had been experiencing decreased profits for almost all its price segments. Customers are not going for the newly released models and instead opted for older more affordable models with almost the same specifications, which is resulting in the longer upgrade cycle. This had affected the sales of both Samsung Galaxy Note 8 and Samsung Galaxy S9.
Customers preferred the Samsung Galaxy S8 over Note 8 and Galaxy S9, both. This even led to Samsung lowering its expectations from the Samsung Galaxy Note 9. The South Korean smartphone giant expects the sales of Galaxy Note 9 to be just 12 million, only a million more than the sales of Note 8 in 2017.
It’s All About Increasing Profit
The decision of uniting the two lineup lies solely on the performance of Samsung Galaxy Note 9 that is to be released in August. The sales performance of this smartphone will decide how and when the unification will take place. The merging of the two lineups will create a smaller product portfolio for Samsung and will thus entice the customer into trying out the new products instead of going for the older ones.
The proposed merger will also have a positive impact on the ‘foldable smartphone‘ that Samsung has been reportedly working on. By clubbing Samsung Galaxy S9 Plus and Samsung Galaxy Note lineups merge the company will create a market space for the foldable smartphone and thus let it perform better.
The reports of the merger also line up with the previous rumours of Galaxy S10 being launched in three variants, with the premium variant having three camera setup on the back and two sensor setup at front. It may be possible that the smartphone features an S Pen if it is a merge of both the lineups. It may become a trend for Samsung to then launch three variants of the smartphones after the merger.
Undoubtedly, the approach will save Samsung a lot of money on Research & Development and Marketing. And with a unified lineup, their flagships may have better sales performance. All we have to do for now is wait for the launch of Samsung Galaxy Note 9 and see how it performs in the market. Whatsoever the decision may be, if Samsung decides to merge the two major lineups then we may have many new and exciting features in just one smartphone rather than being scattered between two different lineups.