Samsung Builds Success On High-End Phones
By Carlo Longino, Thu Apr 15 18:15:00 GMT 2004

The world's number-two handset maker enjoys the highest average selling prices in the industry, thanks in large part to focusing on high-end models and packing them with features more quickly than its competitors.

The Korean company has been gaining share on market leader Nokia, with its first-quarter sales (to be released Friday) expected to be up over 60 percent. Samsung's strong competition has come at the top end of the market, where the company has positioned itself with flashy designs, lots of features and glossy marketing.

Samsung's broad reach across the electronics industry gives it an advantage in rolling out models with new features; the company was a leader in introducing color screens, and it's now pushing camcorders and MP3 players integrated into phones. The company used to be known for its cookie-cutter, me-too devices, but now has a young design team of more than 100 dictating how the phones will look and what features they'll include to the company's engineers.

Nokia's sales warning a few weeks back (it also releases first-quarter results Friday) came after all the major manufacturers enjoyed a strong fourth quarter and were expecting to take that momentum into 2004. Its four top competitors are all on an upswing at the moment, and as one analyst told the Wall Street Journal, it's the first time all four have been making strides at the same time.

It's interesting to compare Samsung's strategy and success to that of Nokia, whose average handset price was $154 in the fourth quarter, compared to Samsung's $194 -- something that's not too difficult to understand, given the number of handsets from the Finnish company in recent memory aimed at emerging markets. Indeed, Nokia's recent sales warning was blamed on a product line-up and sales skewed towards low-end devices.