Price of Samsung’s new Galaxy S20 promises to be a game-changer. But it could struggle to do so.







SINGAPORE: Samsung’s latest flagship Galaxy S20 and its variants are coming to Singapore on Mar 6, with its highly anticipated 5G chips and a new camera system capable of up to 100x zoom.

Phone prices have been skyrocketing over the past years. Will customers be willing to splurge on these super-spec Android phones that cost S$1,300?


Let’s take a step back by looking at the mobile device market. With smart devices rapidly becoming prominent fixtures in modern life, the global revenue from smartphone sales between 2013 and 2018 has seen a stable growth at 9.6 per cent on average.

In 2018, global smartphone sales reached US$522 billion (S$726.5 billion), accounting for 43.5 per cent of the technical consumer goods market.

However, the premium smartphone category - including the iPhone 11 series and Samsung’s Galaxy series priced at US$800 and above - only accounted for 12 per cent of total smartphones sold in 2018, a slight increase from the 9 per cent in 2017.


In fact, close to half of the consumers, at 46 per cent, opted for the mid-segment of US$150 to US$400 phones.

RIDICULOUS PRICES, BUT TOP-TIER SPECS?

The Samsung Galaxy line is intended to compete directly with Apple’s iPhone 11 line-up, but this year’s pricing is even higher than Apple: The base model of the S20 starts at S$1,298, and the highest end S20 Ultra model is selling from S$1,898 onwards.

In comparison, Apple’s latest smartphone, the iPhone 11, starts at S$1,149, which is S$149 less than the base model of the S20.

The S series from Samsung is getting a big reboot in 2020. Samsung has been consistently churning out S series devices since 2010. In 2020, we’ll be seeing the Samsung Galaxy S20, S20+ and the S20 Ultra in Singapore.


The first thing that will surprise you is the name. Last year Samsung S series was the S10 and you would expect it to be S11 this year, but that’s not the case, as Samsung has gone with the S20 moniker and the reason is, these phones are much better than the S10 models.


So let’s see what Samsung is giving us with the S20 series!

The S20 is probably going to be the first 5G phone for many people, and it comes with a 64 megapixel (MP) camera and 3x optical and 30x digital zoom to boot, a leap ahead of the S10.

The differences between the various S20 models mostly come down to subtleties like camera functions, battery size, and screen size. For example, the base model of the S20 has a 6.2-inch screen, whereas the Ultra is just shy of 7 inches.

And the Ultra model comes with a special lens with 10x “hybrid” optical zooming and up to 100x with optical and digital zooming.

All three S20 models boast the much-hyped 5G connectivity that smartphone makers are touting as the next step in communications, but only the Plus and Ultra come with high-band “mmWave” connectivity, the type of 5G that enables gigabit-per-second data speeds faster than most home Internet connections.

If you want the best features that Samsung has to offer, you’d better be ready to pay extra for the higher end models – S20+ and Ultra.

A comparison can be made of the S20 with similar flagship smartphones from its main competitors in the same price range, namely the iPhone 11 and the Huawei Mate 30 Pro, which costs around S$800.

It is worth noting that although the S20 is going to be launched six months later, its specs and features do not offer much improvement compared with the other two models except for the 5G connectivity.

In terms of camera performance, it still falls behind the Huawei Mate 30 pro, and lacks the 3D depth/biometrics sensor, which supports the Face ID feature.

As for other key areas of concern such as battery performance and charging speed, the S20 does not stand out either. It is quite obvious that the new S20 is not a value-for-money choice for buyers who are looking for good deals, even though its baseline model targets the mass market.

“ONCE YOU GO IPHONE, YOU’LL NEVER GO BACK”

Conventional wisdom claims that once you switch to iPhone, “you’ll never go back”.

The reality is that more people are trading their iPhones in for Androids.

According to a recent report by BankMyCell, more than a quarter of former owners of the iPhone X across the US have shifted to Android phones.

On the other hand, only 7.7 per cent of Galaxy S9 users switched to the Apple iOS.

According to a survey conducted of US consumers by PC Magazine in 2018, users move from iOS to Android mainly because of better pricing.

The average selling price for iPhones is expected to be US$759.85 in 2020, with a year-over-year decline of 2.3 per cent in the battle to capture more customers.

In comparison, an average Android device only costs one-third of that, with its average selling price estimated to be at US$258 in 2019. This could seem rather appealing to customers of limited means. Unfortunately, the S20 family clearly does not fall under the mid-range price category.

SO WHO BUYS GALAXY ANYWAY?

According to data and insights consulting firm Kantar Worldpanel collected in 2018, the life cycle of a typical smartphone in the US is about 24.7 months. As the number of first-time smartphone buyers shrinks, it is crucial to catch the consumers when they upgrade or replace their existing phones.

The iPhone has always played in the more affluent end of the market, carrying a premium image over competing smartphones with similar specs and performance.




While Samsung does match Apple in its flagship premium models, it also chooses to go after the mid-lower end of the market with entry-level, super budget phones that realise great success across the wider global spectrum.

Getting their phones in the hands of as many consumers as possible allows these users to get used to Samsung’s interface and the Android operating system, keeping the brand top of mind.

However, having a strong mass market product line defines Samsung’s overall brand image and perceived worth, causing consumers to be somewhat apprehensive about embracing its premium variants like the S20.


For iPhone quitters that are looking at a downgrade, the costly S20 is out of the question.


For Android switchers that seek to upgrade, Apple remains as an invincible leader in the premium category as one of the world's most valuable brands.

Though Apple has revealed a new low-cost iPad and the affordable AirPods, its downmarket strategy seldom tarnishes the premium image of its iconic iPhone product line. Well-positioned between premium exclusivity, stunning design and innovation, the iPhone line has maintained its power to pull in sales from a generally loyal following.

So where does that place Samsung’s new S20 series?

Its specs clearly do not stand out compared with the latest iPhones or Huawei's flagship line. Yet, some die-hard fans of the Android phones and 5G fanatics may be willing to pay a high price for this new Samsung range. However, this may be a rather small segment.

Though promised to mark a generational leap in its specifications and capabilities that might justify its pricing, the S20 still has an uphill battle to fight.

Chong Guan is Associate Professor and Head of the Marketing Programme at the School of Business, Singapore University of Social Sciences (SUSS); and Ding Ding is Associate Professor and Vice Dean of the same School.


Source: CNA/ml



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