Samsung ready to release mid-range Galaxy phones

Now that the fiercely competitive high-end smartphone market is well saturated, Samsung Electronics is pushing into the mid-range mobile phone market with plans to roll out stripped-down smartphone models.

According to the IT Testing and Certification Laboratory, the state-run testing and certification agency for electronic devices, Samsung’s Galaxy S4 Mini (SHV-370D) has acquired certification for it to be sold unlocked, meaning that the phone will not be tied to a certain mobile network so that consumers can sign up for services at any mobile network carrier.

It has been confirmed that Samsung’s smartphones including the Mini, SHV-E400S/K and SHW-A305D have also passed conformance testing at the National Radio Research Agency, a state-run research institute and certifier for broadcasting and communications equipment.

All communications devices are required to be tested before hitting the shelves in Korea.

The users will also be able to use mobile services provided by mobile virtual network operators or MVNOs, which provide wireless services at a cheaper price to consumers by renting the necessary infrastructure from the country’s telecoms ― SKT, KT and LG Uplus.

The upcoming smartphones are said to be mid-priced and stripped down, aiming to attract customers who tighten their belts amid the prolonged economic downturn.

Running on a 1.7GHz dual-core processor, the Galaxy S4 Mini will be equipped with a 4.3” qHD Super AMOLED display, an 8-megapixel rear-facing camera and 1.9-megapixel HD front-facing camera, according to the firm.

Scheduled to roll out high-end and mid-end handsets including the Galaxy Note 3 and the Mini as soon as September, Samsung is reinforcing its diversification strategy for its handset lineup, according to analysts.

“There was relatively little recognition in the mid-range smartphone market last year, which accounted for 5 percent of the total mobile market share. However, the pie of the mid-range smartphone market will increase up to 15 percent this year,” said Song Jong-ho, a senior analyst at KDB Daewoo Securities.

“Up to 50 million units of mid-range Samsung smartphones, including 15 million in the third quarter, will likely be shipped to retailers this year.”

Market watchers predict that Apple, which reportedly plans to release its mid-priced handset as early as this month, could lose market share both in the high-end and mid-end markets due to the Samsung’s market strategy.

“The sales gap between Samsung and Apple, which shipped around 70 million units and 40 million in the first half of the year respectively, could widen up to fourfold in the second half,” Song said.

The California-based firm is said to have lost its driving force since the late Steve Jobs stepped down, and its latest operating system, iOS 7, has received a lot of flak for its lack of creativity.

“In the long term, the mid-range market will maintain high growth until 2015. However, because of the relatively low margin of such handsets, Samsung’s overall mobile earnings will not increase dramatically,” said James Park, an analyst from Tongyang Securities Inc.

With the release of the Galaxy Note 3 and Galaxy S4 Mini adding further momentum, Park forecast the operating profit of the Suwon-based tech firm will record more than 10.65 trillion won ($9.4 billion, up 10 percent on-quarter) in the third quarter and 11.22 trillion won (up 5 percent) in the fourth.

Samsung reported a record-high operating profit of 9.5 trillion won and 57 trillion won in sales in the second quarter, though both fell short of market estimates.

Other players in the mobile phone market stoke competition as they roll out their own stripped-down smartphones such as LG’s Optimus F and L series.

The four major Chinese mobile phone firms ― Huawei, ZTE, Lenovo and Coolpad ― also released affordable smartphones tagged with prices ranging from $160 to $400 starting late last year.

By Kim Young-won  (wone0102@heraldcorp.com)