Too Many Phones?

Samsung’s Broad Range Reflects Its Confidence

I was recently asked by the BBC what I thought of Samsung’s ever-expanding product range. The variety of devices on offer shows no sign of stopping, and the BBC’s technology journalist was keen to find out whether so much diversity was a good thing.

Samsung’s enormous range of mobile devices seemingly flies in the face of a trend towards a smaller, more focused set of products, as offered by its arch-rival Apple and others such as Sony. In recent months Samsung has launched an avalanche of devices, many of which appear to be very similar. This has led to accusations that it’s diluting their impact and confusing potential buyers.

Although there might be some merit in this argument, the substantial profit margin generated by Samsung’s mobile division suggests otherwise. We estimate it’s about 20 percent — far higher than any other phone-maker apart from Apple, whose profit margins continue to defy gravity. Most mobile phone manufacturers are struggling to simply make money.

I see Samsung’s scattergun approach as a statement of confidence by a company that’s riding high in the consumer electronics business. It’s one of the few players that can afford to push out lots of products, see which ones really appeal and then use its colossal marketing budget to promote those devices.

A broader range of products also provides a strong defensive position. A good example of this is in the so-called “phablet” category of mobile phones with giant screens. Samsung was a pioneer in this area with its Galaxy Note devices and most of its rivals are now preparing or offering similar products. To defend its lead Samsung has quickly added two more models with different screen sizes, making it harder for competitors to carve out a niche by offering something that Samsung doesn’t.

Despite its current position Samsung should be aware that having an excessively large product range can end in tears. Just look at Nokia. At its height it became obsessed with creating a phone for every single type of customer. It lost all focus and has now paid a very heavy price.