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Samsung Electronics : Unveils Flagship Galaxy Note 20 With $1,000 Price Tag

08/05/2020 | 10:15am

By Elizabeth Koh

SEOUL-- Samsung Electronics Co.'s newest flagship devices come with 5G, bigger screens, faster processing power--and a lower price point to buy in.

Last year, Samsung rolled out its 5G-enabled Galaxy Note 10 Plus with a $1,300 price tag. But the base model of its 5G Galaxy Note 20 phone, unveiled at a Wednesday virtual event, will retail at $1,000 when it hits the shelves on Aug. 21.

The lowered price reflects the availability of 5G across Samsung's premium phone lineup. But it also illustrates an industry struggling to cash in on a next-generation technology that only early adopters seem excited about. Until recently, handset makers and telecom executives had banked on 5G jump-starting a smartphone industry that has posted consecutive years of declining shipments.

Many consumers, questioning the value of dropping $1,000 or more for a new smartphone, are also feeding a market for lower-priced devices from the marquee brands. Apple Inc.'s new iPhone SE sells for $350, while Google's just-launched Pixel 4a sells for around the same price--a $50 reduction from the prior year's model. Samsung has pivoted its strategy in recent years to emphasize more midtier phones that cater to a wider audience.

But even as the high-end market narrowed, Samsung bet big on 5G to salvage its most profitable user base. When it launched its first next-generation device in April 2019, the South Korean tech giant hoped the launch would distinguish it from Chinese rivals offering similar products at lower prices. Samsung also hoped pushing 5G options early would set it further apart from Apple, which has yet to release a 5G-enabled iPhone.

But the coronavirus pandemic has dealt an especially tough blow. Samsung's smartphone shipments tumbled 29% in the April-to-June quarter--a more severe drop than the industrywide decline of 16%--and saw Huawei Technologies Co. usurp it as the world's No. 1 vendor. The economic damage caused by pandemic lockdowns also affected Samsung's key markets in Europe and North America, while China's Huawei benefited from a spending bounceback in its home country.

The health crisis has prompted phone makers across the board to retool their marketing and sales strategies for the coming months. Even Samsung labeled the moment the "next normal" in promotions ahead of Wednesday's online event.

Part of that adjustment has been pushing phone prices down for once-exclusive features such as 5G.

"Inevitably those prices were going to have to come down, in order to get 5G in the hands of more users," said Bryan Ma, an analyst with IDC. "When you look at the first salvo of 5G phones potentially hitting four-digit price tags, those weren't going to hit a mass market audience."

The average selling price of a 5G-enabled phone globally has already fallen to $813 during the first three months of 2020, a sharp reduction from the prior year's $1,186, according to Canalys, a market-research firm. The slide is fueled by China's 5G rollout, where such devices fetch lower prices, said Nicole Peng, a Canalys analyst.

Samsung has pushed more affordable offerings in response to the pandemic, from releasing a $600 5G-enabled Galaxy A71 in June to offering discounts and financing for its Galaxy S20 handsets that launched in February--just as the pandemic triggered lockdowns across the globe. On Friday, Samsung plans to release another midtier device with 5G connectivity, called the Galaxy A51, for $500.

Samsung typically launches its flagship phones at glitzy events packed with thousands of screaming fans. But the Galaxy Note 20 launch was instead live-streamed from South Korea.

The Galaxy Note 20 comes in two variants: the $1,000 base model with a 6.7-inch display and three cameras on the back. A larger version, the Galaxy Note 20 Ultra, has a 6.9-inch screen and an additional laser autofocus sensor on its cameras that bump the price to $1,300. Samsung has often packed its flashiest features into the Galaxy Note, the industry's first megasize phone when it first launched nine years ago.

But the Galaxy Note 20 lineup offers more tweaks to the existing lineup than new innovations, said Patrick Moorhead, president of Moor Insights & Strategy, an Austin, Texas, technology consulting firm. "These are refinements," he said. "A lot of these things are improvements on prior products."

Samsung also planned to unveil the Galaxy Z Fold 2, the second version of the industry's first mainstream foldable-screen phone. The phone, which opens and closes like a book, got off to a rocky start last year when tech reviewers found design faults.

Flagship devices play an outsize role, as they command the highest prices and float new features that help shape the company's branding. Samsung's own flagship phones signal where new ideas in the industry are headed, even if they make up less of the company's overall profit margins, said Mr. Ma, the IDC analyst.

"It allows them to thump on their chest, if you will, show the world how they can continue to innovate on the high end, even if it's not the best of times," Mr. Ma said.

Write to Elizabeth Koh at Elizabeth.Koh@wsj.com

 

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