The start of the week saw a lot of speculation about the future of the smartphone. Has it peaked/ has it not? Well, maybe, but competition is intensifying anyway, particularly on price in the high and mid ranges.It looks like Google Google will soon put $500 million into launching a new Motorola smartphone against Samsung and Apple Apple products in a market where price reductions and deals will be commonplace.
There are doubts around where Google will pitch the phone with some speculation it will be at $199. That would be a nudge-type product but Motorola cannot be seen as Google’s poodle that’s the role of the Nexus. Motorola needs to launch a high end product, even if it intends to chase the lower end of the market later.
Samsung will very likely launch the Note 3 at the same time that the Motorola and new iPhone go on sale. It has begun aggressive pricing of the Galaxy S4 to ensure that it maintains market share in what looks like being a tough summer and Fall. The S4 is now, in many locations, cheaper than a basic iPhone, even though it costs more to produce.
Samsung is using extra margin in its new S4 family, where key component costs are lower, to make a statement about price rather than to claw more profit from its premium smartphones. When the original Galaxy S4 launched in Europe in April Samsung customers paid a premium of up to Euro 695, or $895 at today’s exchange rate.
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