SmartphonesA string of recent iPhone and Galaxy price cuts has rocked the phone markets from Europe to Brazil to India. This is the season for price cuts from Apple (AAPL) and Samsung (005930), and we see the same thing every year. But this time around, the cuts are more severe than we have ever seen before. Some pricing on Galaxy S models in Asia have dropped by nearly 50% as Samsung battles back against the insurgency of upstart brands like Micromax and Karbonn. The Galaxy S III?s price in Europe has plunged by nearly 40% from June 2012 as Samsung prepares to debut the Galaxy S4. Apple?s iPhone 4 has dipped to just $270 in Brazil. In India, Apple now offers to pay 7,000 rupees?for old smartphones from consumers who trade them in towards an iPhone 4 ? probably the most aggressive promotion Apple has ever launched over there.
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The impact of these moves is already becoming evident in Europe. The widely followed USwitch smartphone sales tracker now shows five Samsung models and three Apple models in the U.K.?s top-10 chart. Discounted models from the two giants have knocked out all of BlackBerry (BBRY), LG (066570) and Nokia?s (NOK) handsets, which still showed up in the January-February charts. Back in January, no fewer than four Nokia models made the top-10 list.
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In the spring of 2012, both Samsung and Apple were still enjoying strong volume growth and market share gains practically across the globe. But by Christmas 2012, Apple?s global smartphone volume growth cooled to 29%, below the industry average; and Samsung?s market share had started slipping a notch in India. Both Apple and Samsung are now getting a lot more aggressive with pricing and promotions. The overall smartphone volume growth has dropped from 50%-plus in January 2012 to around 35% in Q1 2013.
The impact on smaller rivals in Q2 2013 could be profound. As relatively fresh high-end models like the Samsung Galaxy Note II suddenly drop to the medium price bracket, they put a lot of pressure on HTC (2498), LG, Nokia and BlackBerry ? brands that are trying to recover from extremely weak performances in 2012. Apple?s notable April aggression in emerging markets like India and Brazil may be a sign that it plans to get far rougher on budget rivals in 2013 than it has ever been before.
It could well be that the second quarter?this year will be one of those watershed quarters when market shares swing sharply after a period of slower change. As mobile handset vendors prepare to report their Q1 2012 numbers, it makes sense to pay particular attention to the spring guidance; the game is now changing radically from the January-March period.
This article was originally published on BGR.com
Source: http://news.yahoo.com/steep-apple-samsung-price-cuts-blast-rivals-across-153003084.html
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