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Journalism of Courage
More than a decade ago, Samsung made a bet on its flagship Galaxy S smartphone to rival Apple’s iPhone. That gamble helped establish the South Korean behemoth as the flag bearer of the Android camp. Thirteen years on, the Galaxy S series is still going strong but needs a rethink in a sea of cookie-cutter smartphones from rival Chinese brands.
On Wednesday, Samsung will host an in-person event in San Francisco where it will unveil a new line of Galaxy S23 smartphones. The launch event will be a reflection on Samsung’s phone strategy for this year and where the premium smartphone market is headed, especially at a time when economic headwinds have made consumers conscious about big purchases.
Samsung, the world’s largest smartphone maker by volume, will likely reveal three smartphones in the Galaxy S23 range: an entry-level Galaxy S23 model, a step-up S23 Plus with a larger screen and the top-end S23 Ultra. The new phones will have faster processors, battery longevity improvements, camera upgrades and new colours – the same type of incremental upgrades that have been introduced for years now. Yet, Samsung is expected to sell the new phones in the millions, thanks to the brand name, tie-ups with telecom operators, and clever marketing campaigns that seduce consumers to pay over $1000 for a Galaxy S phone.
“There is no question that updates to smartphones, be that Samsung’s latest Galaxy flagship or Apple’s latest iPhone have become iterative to the point of being almost boring, but it’s important to note that it is increasingly unrealistic to compare a new smartphone with its predecessor, or even a model from the same line up that is two years old,” Ben Wood, an analyst at CCS Insight, told indianexpress.com.
Unlike in the past when consumers were persuaded to buy new handsets through compelling features like the screen size, better cameras, waterproofing or improved battery life, these days people are not in a rush to buy new phones unless their old devices need an upgrade. “Consumers are keeping their phones for longer than ever,” he says. “A typical consumer upgrading their phone will have a product that is at least three years old.”
This problem isn’t unique to Samsung; it’s across the smartphone market. Those who have not updated their smartphones in the last three to four years may want to be updated to Samsung’s new Galaxy S23 series, especially if they have an older phone and their batteries struggle to charge or devices aren’t getting new software updates. “An upgrade from a Galaxy S10 5G to the latest and greatest Galaxy phone is a huge step up, and for those customers, it will really enhance their user experience,” he said.
Smartphones are no more fun and exciting. The Galaxy S23 is unlikely to be different from its predecessor in terms of size and function. It will be faster and may have improved cameras, and that’s it. Ditto for Apple. The latest iPhone 14 offers incremental upgrades over the previous generation model. There isn’t much to brag about the entry-level model. Even OnePlus, once known for bringing cutting-edge hardware at a lower price point but still maintaining the premiumness of the device, has also become predictable lately. Its smartphones just feel repetitive and lackluster, though it charges more for a OnePlus flagship than it used to before.
That’s one of the primary reasons smartphone growth has stalled and is not growing across major phone markets. Research firm Canalys recently revealed worldwide smartphone shipments dropped by 17% YoY in Q4 2022. Analysts cite higher prices of smartphones as one of the reasons behind the falling demand for phones.
In the 13 years since the first Galaxy S was launched, not only has the device changed radically, but it also changed the high-end Android smartphone market. The Galaxy S was fresh and innovative, and that’s exactly what Samsung and Google needed to take on the iPhone. However, the Galaxy S lineup isn’t the only Android-powered flagship smartphone series offered on the market.
The Galaxy S23 arrives in a different environment when the smartphone market has started to peak and the competition from players like OnePlus and Vivo cannot be ignored. In fact, the South Korean company did acknowledge the new reality last year and made changes to the Galaxy S lineup when it merged Galaxy Note and Galaxy S series phones to create a new flagship “Ultra” device. Samsung will repeat the same formula this year and bring the Galaxy S23 Ultra to the market which will combine the high-end camera and performance seen in its S Series with the power and built-in S-Pen stylus from the popular Note Series of phablets.
The strategy is in line with what Apple is also doing with the iPhone 14 Pro Max. Not only does the Galaxy S23 Ultra offer “extra” features such as a 200MP camera and the S Pen, but it is also extremely important to drive sales of ultra-premium smartphones. Furthermore, typically the more loyal Samsung fans will be the ones splurging $1200 on the latest model. Also, there has been a shift towards higher-end models with demand for premium smartphones continuing to soar in many markets.
As happened in the case of the iPhone 14 Pro Max, Apple’s top-end model saw stronger sales in the pre-orders phase than other models in the iPhone 14 line. That’s where the market is headed right now. If Samsung is unable to maintain its competitive advantage, other phone players may take up market share, warns insiders and analysts.
“With the upcoming launch of its new flagship Galaxy S23 devices, Samsung has an eight-month window to take the leadership on high-end smartphones before the launch of the new iPhone 15 later in Q3 2023,” explained Thomas Husson, Vice-President, Principal Analyst at Forrester. “I’d expect the key differentiation point to center around an improved image experience thanks to a likely new 200-megapixel camera, new brightness, and night mode capabilities, enabled by a boosted phone performance.”
But for Samsung, the Galaxy S lineup is not as lucrative as it used to be a few years ago. The company has gradually been building momentum for foldable smartphones, which will help Samsung differentiate its phones from the competition. This not only addresses the lack of innovation in the smartphone market but also keeps Samsung ahead of Apple, its biggest competitor in the premium phone segment. Cupertino is yet to launch a foldable phone and until that happens Samsung will continue to be the biggest foldable phone player in the market. Samsung itself targets to have foldable smartphones account for over half of the premium smartphones it sells by 2025.
“Although the Fold line-up is what grabs the headlines, the volumes are a fraction of the Galaxy S series devices,” Wood says. “The Fold device volumes might be significantly lower, but the average selling price is higher than everything else making it a very attractive niche,” he adds.
