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Why the “cheap” Galaxy S10e could be Samsung’s most successful upcoming phone

Samsung Galaxy S10e leaked renders; via @rquandt

Samsung, Apple, LG, Google: all of these and many other companies are in the smartphone business with the goal of putting a fast, beautiful, and innovative smartphone in the hands of each and every person. A phone bearing their own brand, of course.

They’re also in it to make money – lots of it.

However, making money by making smartphones has been getting more and more challenging – not only because of aggressive competition, but also because global smartphone growth has stalled. Everyone who wants a smartphone already has one, and existing smartphone owners are holding on to their phones for longer than before.

Samsung’s smartphone profits are down. Now what?

Like many other phone brands, Samsung has been feeling these chilling winds of change. While Samsung’s electronics business has been doing well overall, its mobile division has been struggling to make progress. Towards the end of 2018, it was reported that Samsung’s year-on-year profits generated by phone sales have dipped by a third. Yikes!

So, how can Samsung give its smartphone sales a boost? By launching new, better phones that people are willing to buy, of course.

We know that Samsung is working on a foldable phone, as well as on a 5G phone, and without a doubt, both of these will make major headlines. But I suspect that neither of them will be a true moneymaker. Samsung is making these phones for the bragging rights – to strengthen its position as a pioneer, an innovator, and a leading tech company. These two devices may end up being limited in availability and too expensive for the general consumer, not to mention that they’ll be the result of higher R&D costs.

The significance of the “cheap” Galaxy S10e

The Galaxy S10 and the Galaxy S10+ are two phones with a much greater chance of boosting Samsung’s profits. However, I believe that the true success story of the Galaxy S10 lineup could be the cheaper Galaxy S10e.

That’s not because the Galaxy S10e will be a cheaper phone. It’s because the S10e will be a cheaper Galaxy S phone. The Galaxy S10 and Galaxy S10+ flagships will create the buzz Samsung needs; they’ll introduce the public to Samsung’s latest software features and tech advancements. Meanwhile, the Galaxy S10e – surrounded by the premium Galaxy S aura – will be the phone which would allow a broader audience to experience Samsung’s latest without having to spend a grand. It may end up becoming Samsung’s “affordable flagship” – the kind of device Samsung hasn’t truly launched yet. 

Taking a page out of Apple’s book

Of course, there’s no guarantee that the Galaxy S10e will be a smashing hit. But the approach has worked for others, namely Apple. Yes, we do realize that the company recently lowered its expected revenue guidance from $89 billion to $84 billion, but at the end of the day, iPhones still make a ton of money. And curiously, Apple’s cheaper iPhone XR has been selling really well. In fact, data indicates that during Q4 of 2018, four out of ten iPhones sold in the US were an iPhone XR. The iPhone XS and iPhone XS Max combined accounted for 26% of all US iPhone sales during the same period. 
While we can’t say how much profit the iPhone XR generates, it is clearly a hit product, and its success is a result of Apple playing its cards right. This boils down to cutting the right corners – to bringing the cost of the product down with minimal impact on the user experience. The iPhone XR is $250 (25%) cheaper than an iPhone XS, but practically, both phones do the same things – and ultimately, that’s what most people care about. They’re equally fast, they take equally great pictures and (to a large extent) portraits, they both have fancy features like Face ID and screens stretching from corner to corner. Sure, the XR has one camera less, a lower-resolution LCD screen instead of an AMOLED one, and a body made of cheaper aluminum instead of stainless steel, but the average buyer doesn’t care about any of this. They simply don’t – as long as they’re getting an iPhone that looks good, works well, and feels as luxurious as an iPhone is expected to.

It is clear that with the Galaxy S10e, Samsung will try to use the iPhone XR formula to its advantage. According to rumors, the phone will have nearly all of the capabilities of the standard Galaxy S10, but will cost significantly less by skipping features like the in-display fingerprint scanner and the third camera, as well as by using a flat screen instead of a curved one.

All in all, the Galaxy S10e is the kind of phone the masses need: a premium phone from a trusted brand loaded with flagship features and not bearing an unreasonably high price. It will not necessarily steer a long-time iPhone user away from upgrading to the iPhone XR, but it is a phone that the millions of people still holding on to their Galaxy S6 and Galaxy S7 handsets would notice. 

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