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There have been no less than eight new phones added to Samsung's 'galaxy' of smartphones since January in India. It is banking on buyers to be able to differentiate, for example, between Galaxy phones like the Mega 5.8 (Rs 25,100 with a 5.8 inch screen), Mega 6.3 (Rs 31,490 with a 6.3 inch screen), the Grand Quattro (Rs 17,435 with a 4.7 inch screen) and the Grand (Rs 19,900 with a 5 inch screen). With one such new launch, the Galaxy Star, priced at Rs 5,240, it straddles both the extremes on the smartphone price spectrum (its Galaxy S4 comes for Rs 41,500 ).
With the slew of new launches, the South Korean chaebol has made it clear it will pull all stops to cover every need gap in the smartphone market. It is doing so in other global markets, even multiplying its sub-brand, the Galaxy S (Mini, Active, Google Edition, Zoom) and India will be no different. Of the roughly Rs 9,100-crore smartphone market, Samsung has around 50 per cent share, according to market experts.
But the prolific releases beggar the answer to whether the market can sustain as many as 17 Galaxy models at one go. On one hand, rampant brand extensions can dilute a brand's relevance for a core audience, and on the other, closely-priced and feature-laden models can cannibalise each other.
Manu Sharma, director (mobile business), Samsung India says, "Quite honestly, Galaxy is a very big, established brand, almost like a company in itself! Our efforts will always be to differentiate between the various offerings, no matter at what price they come. The target is to create aspirations in different segments." Manasi Yadav, senior market analyst (mobile phones and tablets) says, "Samsung has a product-heavy strategy. At any point, it will have more than 10 models." It has four models of its feature-phone brand called REX
In December last year, Samsung had claimed selling over 10 million Galaxy devices in India since the launch of the first Samsung smartphone, the 'Galaxy S', in 2010. For Samsung, the mobile and IT business brought in around 65 per cent of its Indian revenues in Jan-Dec, 2012.
The company has homed in on big screens on handheld devices as the latest trend. Sharma says models such as the Grand are examples of Samsung reading the Indian consumer's mind; its Note range of phablets has shown that "there is a strong demand for large screens".
However, with its predilection to launch a Galaxy reiteration almost every week globally, experts have pointed out the dangers of stretching the brand too thin. While India is yet to see the influx of the Galaxy S extensions, will there be a Galaxy one too many in this market?
Ogilvy & Mather India Vice Chairman and Country Head (discovery and planning) Madhukar Sabnavis says, "In the consumer durables industry we have seen brands first launching premium products and then percolating down the value-chain to extend. So, the fear of dilution of a brand or even the fear of cannibalisation among products should not keep Samsung from extending the franchise of Galaxy. I am sure the brand's managers will be keeping an eye on the tipping point. That would be the last point where a consumer is willing to trade-off features for price."
"In the past, we have withdrawn even well-performing models to manage the portfolio according to consumer preferences. There will always be some models on their way out and new launches," says Sharma. That could be the reason why it has launched the S4 before the S3 could complete a year in the market.
Competition has been catching up with Samsung in India. Indigenous phone manufacturers such as Micromax and Karbonn have chipped away at its market share with similarly-featured but lower-priced smartphones (please see chart for Samsung's volume shares). Apple, though facing Samsung's worldwide predicament of less consumers buying high-end phones than low-end models, has had first-mover's advantage in introducing EMIs in India.
Samsung's phalanx of Galaxy models could be key to beating rivals. Sharma says, "Growth is being driven by both upgradation and new usage. So, we want to ensure that when existing Galaxy users upgrade, they upgrade to the next Galaxy phone." Among the newest models, the Galaxy Star is clearly for the feature-phone user looking to upgrade and experts point out that the Mega twins are also meant for emerging markets with their specifications (large screen, but watered-down processing power).
"Pricing as part of the strategy is a very clever ploy; not playing with the price of a premium product is an obsolete dictat now," reminds Sabnavis. Yadav of IDC points out, "The EMI schemes are being offered by the manufacturers themselves, showing their focus on increasing volumes."
Retailers say that both upselling and guarding against local competition have become easier. "We have seen a lot many consumers with a budget for a Rs 20,000 phone end up spending more on a Galaxy Note 2, for example," says one. He explains that the Grand has been able to keep Indian competitors at bay with its mix of features and pricing and the Mega will cater to anyone looking for updated features for a reasonable price tag. For him, there are seven from the Galaxy's portfolio which do brisk business. In Jan-Mar, 2013, according to IDC, Samsung has 33 per cent share (with shipments of around 2 million out of the 6.12 mllion smartphones sold in India). It might be less than its share in the same period last year, but it has arrested a slide compared to the quarter of Oct-Dec, 2012.
