Samsung Targets Entry-Level Smartphone Market in China with Two New Models

Samsung (005930:KS) recently surpassed Nokia to become the global leader in mobile phone shipments, but apparently the company still wants more. According to a China Daily report over the weekend, the Korean handset maker intends to take a third of China’s entry-level smartphone market this year.

Of course this makes a lot of sense considering two important factors which we have noted here on this blog recently: 1) China is expected to overtake the US as the world’s biggest smartphone market this year [1], and 2) the typical smartphone user in China earns a comparatively modest income, making about $12,698 per year on average.

The company announced on Friday that it is offering two models – the S6102E and S6352 – priced at 1,158 RMB ($183) and 1,599 RMB ($253) respectively. China Daily quotes Wang Tong, Samsung China’s senior vice-president and CTO on the move:

There is a strong market trend that prompts us to provide lower-price smartphones in China … and I think it’s time now […] We are sure that about one-third of [a predicted 60 million entry-level phones in the market this year] will be produced by Samsung.

Both these new entry level models (pictured below) will be powered by Android 2.3, and the hardware specs are fairly modest.

In other China smartphone news, Baidu’s NASDAQ:BIDU vice president of engineering recently told Reuters that it has a few partnerships to announce soon, and that it is talking with “global” handset makers to produce smartphones with Baidu’s mobile OS. Could one of these makers be Samsung? That would be an interesting combo.

So while Xiaomi is making sweet looking Android phones affordable for Chinese, it looks like it will be facing huge competition. The phone costs 1,999 RMB ($317) which is a little on the high side compared to Samsung’s — although the specs are far better. But Samsung also doesn’t have Lei Jun, who has founded/led a series of successful businesses in China, including Joyo.com, Kingsoft, MIUI, and Vancl. Chinese consumers appear to be very interested in Xiaomi too, so this is certainly going to be a fun race to watch.

[Lead image: it.sohu.com]