Samsung hints at a possibility of slashing the price of Galaxy S6 and S6 Edge to maintain sales.
The prices of both Galaxy S6 and S6 Edge have dropped by as much as Rs 10,000 within just four months of its launch in India and there could be a further price-cut going forward. This comes after Samsung reported a drop in its overall smartphone shipments and profits.
“Overall revenue improved slightly QOQ for the Mobile Business, due to increased shipments of the Galaxy S6 and Galaxy S6 edge, despite a drop in overall smartphone shipments caused by declining shipments of older middle- to low-end models. Although revenue increased, profits increased marginally QOQ, due to supply difficulties from higher than expected market demand for the Galaxy S6 edge, as well as increased marketing expenditures that typically accompany flagship product launches,” said Samsung in a statement.
Samsung also hinted at a possibility of slashing the price of premium Galaxy S6 and S6 Edge smartphones to maintain sales. The Galaxy S6 was launched at Rs 49,000 (32GB version) while the S6 Edge (32GB) was priced at Rs 58,900. Both of them are now available for Rs 39,208 and Rs 49,900 respectively on Flipkart.
During the launch of the new Galaxy flagship smartphones in India, Samsung also announced that the company would manufacture both S6 and S6 Edge in India. Having said that, the company had made it clear that there would not be drop in their prices despite manufacturing them locally.
“We have been manufacturing over seven years in India and we see that the said pricing [launch price] will stay for a significant period of time to come forward,” said Samsung India VP Asim Warsi during the launch in March.
So, what is leading to these sudden price drops (to maintain sales)? Samsung attributes this to marginal profits and higher marketing expense. Also, the Galaxy S6 Edge met with supply issues while Galaxy S6 could not attract much eyeballs.
“The Mobile Business plans to firmly maintain its sale of premium smartphones by flexibly adjusting the price of the Galaxy S6 and S6 edge, and launching a new model with a larger screen. Supply issues concerning the Galaxy S6 edge have been addressed. Moreover, the IM Division plans to enhance efficiency across the board, including product line-ups, marketing and R&D,” said the statement.
According to Counterpoint Research’s Q2 2015 Global Mobile Phone Market Summary, “Smartphone shipments declined across key markets as the Galaxy S6 series launch did not move the needle or arrest the slowing growth. Premium ($450+) smartphone shipments remained flat annually but were up QoQ as Galaxy S6 series demand almost was similar to S5 in many markets in spite of being the third and fourth best-selling smartphones globally in June.
Samsung is well known for drastically cutting down the prices of its smartphones. So, if Samsung is now able to sell its flagship Galaxy S6 for as low as Rs 39,000 and may be even less in the near future, what was stopping it from doing the same four months back?