Samsung A Series - The Right Pricing At the Right Time
Some mid-tier phone announcements are forgettable, but Samsung's A series announcement today is worth diving into. The Galaxy A50 was one of the best-selling phones in the world last year, but if you haven't heard of it, it probably means that you live in the U.S., which has never had much of a mid-tier market. At the low end, people buy phones outright for prepaid use. At the high end, carriers finance the purchase of a phone over 20 - 36 months, often with subsidies/promotions baked in. While there has been some resistance to phones priced above $1000, consumers have not been willing to consider less expensive phones if they can have a flagship phone for just a few dollars more per month (U.S. consumers are also not great at math).
This year, Samsung is bringing a full line of A series to US carriers. Launching products during a pandemic is tricky and the timing is coincidental, but this is definitely the right time to offer a richer selection of lower priced phones. Samsung is not alone in testing the mid-tier market in the U.S.; TCL has essentially the same strategy with its upcoming 10 series announced back at CES, only without it fitting into a larger lineup that includes premium S series and super-premium S and foldable phones. (That could be changing for TCL as well; the company has been showing off all sorts of new form factors with plans to launch in late 2020 or early 2021.)
Samsung has offered sub-$300 phones in the U.S. targeting prepaid (J series), but it hasn't been willing to make them competitive on specs/price, preferring to charge a brand premium. I haven't gotten hands on with the new phones yet, but it looks like this is changing.
Sub-$500 5G. From Samsung. Really.
Samsung is also unwilling to let Chinese competitors use 5G as a beachhead -- especially in Europe -- and so it is offering a pair of A series phones with 5G at $499 (Galaxy A51 5G) and $599 (Galaxy A71 5G) this summer. Details on U.S. variants will be provided closer to launch, but relatively inexpensive 5G phones from Samsung are coming to this market, too. While Samsung is insulated from competition with Xiaomi, OPPO, and Huawei in the U.S., there are sub-$500 5G phones coming to U.S. carriers later this year from TCL and Coolpad; the A51 5G and A71 5G will make it harder for them. It will also provide clear differentiation for Samsung from Apple's lower priced phones.
Will A series cannibalize Samsung's Galaxy S and Note sales, especially with the S20 starting at $1000? Yes and no. Of course there will be some cannibalization - but it's better for Samsung to cannibalize itself than let others (including Apple's rumored new iPhone SE) do it for them. However, anyone who has the money and inclination to spend $1000 - $2000 on phones with the latest processors, fast refresh displays, networking, zoom lenses, S Pen, or folding form factors is not going to be tempted by a "good enough" phone at $399.
Conclusion
Samsung is not Apple, and its product lineup does not and should not match up 1:1. Broadening the product line is not new - Samsung has seen success with these phones outside the U.S. - and the A01, A11, and A21 are going to give Motorola's moto e and g trouble. However, Samsung will need to market the A51 (and A71 5G) in the U.S., because this really is a new value proposition for consumers used to paying a bit more per month for a flagship. While Samsung now has every price point covered, it is missing a NEW product in the crucial $650 - $1000 band. So, the lineup overall is not perfect, but the A series strategy looks great.
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