{"id":143087,"date":"2026-09-04T09:34:07","date_gmt":"2026-09-04T09:34:07","guid":{"rendered":"https:\/\/www.europesays.com\/korea\/143087\/"},"modified":"2026-09-04T09:34:07","modified_gmt":"2026-09-04T09:34:07","slug":"samsung-calls-it-the-optimal-time-for-market-restructuring-rolls-out-budget-phones-as-apple-and-chinese-rivals-slow","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/korea\/143087\/","title":{"rendered":"Samsung Calls It the “Optimal Time for Market Restructuring,” Rolls Out Budget Phones as Apple and Chinese Rivals Slow"},"content":{"rendered":"

\"\uc0ac\uc9c4\uc124\uba85\"\/ \uc0ac\uc9c4 \ud655\ub300
\nWhen memory prices surge, mid- to low-end smartphones are the first products that manufacturers reconsider. Their low selling prices leave little room to absorb higher component costs, while price increases could drive consumers to competing products. Samsung Electronics, however, is moving in the opposite direction. Rather than reducing shipments of budget phones to protect profitability, it has chosen to maintain sales volumes by promoting the Samsung Galaxy A series. In particular, it allocated more than half of its total A-series production plan to the relatively lower-priced Galaxy A17 and Galaxy A18. The decision to protect budget-phone sales despite the headwind of rising memory prices is driven by market share. Analysts say the market landscape could shift depending on which company can maintain sales volumes and endure the pressure, as Chinese manufacturers face the same cost increases.<\/p>\n

\u25c6 Chipflation Sends Budget-Phone Profitability Plummeting\n<\/p>\n

Prices for DRAM and NAND flash are rising sharply as memory demand surges, led by artificial intelligence (AI) data centers. For smartphone manufacturers, this means a corresponding increase in the component cost of producing each device.\n<\/p>\n

Mid- to low-end smartphones are being hit particularly hard. Premium products priced well above 1 million won have relatively more room to absorb higher component costs or adjust their prices. By contrast, products priced in the hundreds of thousands of won suffer a greater blow to profitability when component prices rise by the same amount. Counterpoint Research also analyzed that the impact of higher memory prices in the second quarter of this year was concentrated on entry-level smartphones.\n<\/p>\n

Passing higher costs on to consumers weakens price competitiveness, while keeping prices unchanged forces manufacturers to absorb the expense. Even so, Samsung Electronics is concentrating production on lower-priced products within the Samsung Galaxy A series. Samsung Electronics\u2019 production plan for the Galaxy A17 and Galaxy A18 from August through November this year totals approximately 18 million units, accounting for more than half of the entire A-series volume. The move appears to reflect a judgment that losing market share after cutting sales volumes to protect short-term profitability could create an even greater burden.\n<\/p>\n

\u25c6 Chinese Companies Cut Shipments Under Cost Pressure\n<\/p>\n

Another reason Samsung Electronics is not retreating from the mid- to low-end market is that its competitors cannot avoid the same form of chipflation. Chinese smartphone makers such as Xiaomi, Oppo, and Vivo have expanded their global presence with budget products built around price competitiveness. Because they rely heavily on lower-priced products, they are also facing significant pressure from rising memory prices. Raising prices weakens their competitiveness, while maintaining prices erodes profitability.\n<\/p>\n

According to Counterpoint Research, Samsung Electronics ranked first in the global smartphone market in the second quarter of this year, with a 23% share based on shipments. Apple followed with 21%, while Xiaomi recorded 11% and Oppo and Vivo each posted 8%. While the global smartphone market contracted 7% year on year, Samsung Electronics\u2019 shipments increased 9%. By contrast, Xiaomi and Vivo saw declines of 26% and 21%, respectively. Counterpoint Research analyzed that Xiaomi was particularly vulnerable to rising memory prices because budget and mid-range products account for a large share of its lineup.\n<\/p>\n

Samsung Electronics appears to have determined that these market changes could create an opportunity to expand its share. If it maintains supplies of the Samsung Galaxy A series while Chinese manufacturers\u2019 sales weaken because of higher costs, it could capture additional demand in the mid- to low-end market. Competition between Samsung Electronics and Chinese manufacturers is particularly intense in emerging markets such as India, Southeast Asia, and Latin America. Stable supplies of the A series and the preservation of its price competitiveness are important because Chinese manufacturers could fill the gap if sales decline in these markets.\n<\/p>\n

Apple, which is competing with Samsung Electronics for the top market-share position, is facing a similar situation. Apple has been directly hit by rising memory prices to the point of asking the U.S. government to approve the use of memory chips from China\u2019s CXMT. This has prompted concerns that the price competitiveness of Apple\u2019s budget product, the iPhone 17e, priced at 990,000 won, will inevitably weaken. There are also forecasts that mass production of the foldable phone Apple plans to release this year will be difficult.\n<\/p>\n

\u25c6 Profitability Through the S and Z Series, Market Share Through the A Series\n<\/p>\n

Samsung Electronics has product lines targeting both the premium and mid- to low-end markets. The Samsung Galaxy S series serves as its flagship high-end lineup, while the Galaxy Z series targets the premium market with foldable phones. The Samsung Galaxy A series supports overall shipments through mass sales, while the Samsung Galaxy M series is sold selectively, mainly in highly price-sensitive markets such as India.\n<\/p>\n

Samsung Electronics\u2019 strategy is to supplement profitability through premium-product sales while maintaining A-series volumes to expand market share. However, the burden could grow if memory prices continue rising for an extended period. Even if A-series sales increase, sustained high component costs could delay the recovery of the MX Division\u2019s profitability.\n<\/p>\n

[Sora Park \/ Seong-bae Park]\n<\/p>\n

\nThis article has been translated by GripLabs Mingo AI.<\/p>\n","protected":false},"excerpt":{"rendered":"\uc0ac\uc9c4 \ud655\ub300 When memory prices surge, mid- to low-end smartphones are the first products that manufacturers reconsider. Their…\n","protected":false},"author":2,"featured_media":143088,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18],"tags":[72763,72762,8228,43310,127,276,13567],"class_list":["post-143087","post","type-post","status-publish","format-standard","has-post-thumbnail","category-samsung-electronics","tag-3newnewnew","tag-a-series","tag-memory-prices","tag-premium","tag-samsung","tag-samsung-electronics","tag-smartphones"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/143087","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/comments?post=143087"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/143087\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/143088"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=143087"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=143087"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=143087"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}