Note 20: How do you sell a $1,000 phone during a pandemic? Samsung has a plan

Samsung is launching its highest-end smartphones, together with the Be aware 20 Extremely, in the course of the pandemic.


Digital gross sales pitches and consultations. Touchless in-store gadget demos. Offers galore. These are simply a number of the plans in Samsung’s playbook for promoting phones throughout a pandemic. Final week, the South Korean electronics big unveiled the Galaxy Z Fold 2 alongside the $999 Note 20, the $1,299 Be aware 20 Extremely, the $649 Galaxy Tab S7 pill, the $399 Galaxy Watch 3 and the $170 Galaxy Buds Live earbuds. Samsung has already begun taking preorders for the new Notes. Orders will ship to reach on or round Friday, Aug. 21. 

Samsung hasn’t but detailed pricing or availability for the Z Fold 2, however stated it will share more information on Sept. 1. The primary technology of the gadget value $1,980 and got here with 4G within the US. The brand new mannequin packs in 5G connectivity throughout the three main US carriers, a glass display and a redesigned hinge, all of which might make it much more costly. 

Samsung, which just lately lost its crown as the world’s biggest phone maker to Huawei, is launching its new gadgets in a troublesome atmosphere. As a substitute of dealing with a robust marketplace for telephones, with 5G and foldable screens getting people to upgrade their devices, most handset makers are seeing decrease demand amid the raging coronavirus pandemic. Thousands and thousands of individuals are out of labor, hundreds of thousands have died and areas across the globe proceed to battle a seemingly endless surge in infections. Customers are choosing inexpensive gadgets, saving their cash altogether or spending their money on PCs and different work-from-home and entertainment supplies.

Samsung’s process with its new lineup is discovering consumers prepared to fork over a grand or two throughout a pandemic and recession. The brand new merchandise have been designed earlier than the novel coronavirus unfold across the globe, which meant Samsung could not tweak the Be aware 20 or its different new gadgets to deal with the pandemic. 

What it might do, although, was change the way it goes about promoting the Be aware 20 and the Be aware 20 Extremely, Drew Blackard, vp of product administration for Samsung Electronics America, stated in an interview forward of the launch occasion. 

“It was a bit extra of the way you react to the present scenario versus type of retool every little thing that you simply’re doing,” Blackard stated. “Although we could not change the gadget, we very a lot rethought how we go to market.”

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That includes those virtual consultations that’ll make the online buying interaction more like the in-store experience. Touchless digital demos will give in-store shoppers a glimpse into the Note’s features, right from their own devices. And Samsung is exploring ways to tailor its future products and services to the needs of people who are largely stuck at home, like making it easier to track fitness and stay healthy while quarantining. 

Lower phone sales

Samsung’s phone sales have taken a hit during the pandemic. Its Galaxy S20 lineup became available about a week before parts of the US issued stay-at-home orders. Because consumers were worried about money — and couldn’t see the new devices in person — demand fell. Last week, Samsung said its mobile business revenue tumbled 18% from the previous year. 

In the second quarter, Apple was the only smartphone vendor that saw its shipments grow, according to CanalysApple’s iPhone SE, its first major revamp of its popular small phone in four years, arrived in mid-April with a starting price of $399. That seemed to be the perfect phone for the times and helped buoy Apple’s results. The device costs $300 less than the iPhone 11 but contains many of the same specs, appealing to people who can’t afford a $700 phone, let alone a $1,000 iPhone 11 Pro

Samsung, despite launching its new Galaxy S20 lineup in March and its less expensive Galaxy A phones, saw the biggest year-over-year drop of the world’s top five phone makers in the second quarter, Canalys said. Its 30% decline allowed Huawei to leapfrog Samsung to become the world’s biggest smartphone vendor for the first time, the firm noted. It was the first time in nine years that a company other than Samsung or Apple shipped the most phones.

Samsung, in a statement, said it’ll continue to “focus on creating innovative mobile experiences that improve our users’ lives.” Part of that includes its new devices from Unpacked, and it noted during its earnings in late July that it also will strengthen its “mass-market lineup” of less expensive phones. 

At least in the US, Samsung “found that, actually, demand for premium devices is still quite high,” Blackard said. Still, Samsung sold about 44% fewer Galaxy S20 models in the US in the first four months of sales than the Galaxy S10 last year, according to M Science, a data analytics provider that tracks stats like mobile adoption. 

Google, meanwhile, unveiled its new smartphone, the Pixel 4A, last Monday. Instead of introducing a high-end, flagship phone, Google opted to slightly pare back the Pixel’s specs to price it at $349. The phone doesn’t have 5G or a premium processor, but “for its price, the Pixel 4A has one of the best cameras you can get on a phone,” CNET’s Lynn La said in her review of the device. 

The new Note 20 lineup is nowhere near that price level, with phones starting at $1,000. For some people at this time, that pricing could be hard to stomach. Working in Samsung’s favor is the rabid Note fanbase. 

“What we’ve shown here in the past five months is we probably have the broadest portfolio of any company in the industry,” Blackard said. “We are down to $99 on the A01, up to Galaxy Fold, which is [about] $2,000. … Our portfolio could be very effectively suited to the present scenario.”

Nonetheless, the brand new Be aware lineup has quite a bit in widespread with the Galaxy S20 gadgets from earlier this yr.  Previously, the Be aware obtained the most recent and best expertise first, and it additionally had the largest display. Now the Galaxy S lineup will get a whole lot of options first, and the foldables are Samsung’s new ultra-premium lineup. There’ve been questions for years about the place the Be aware suits into Samsung’s general lineup.

“It is going to be attention-grabbing to see whether or not this would be the final evolution of the Be aware in its present format,” stated CCS Perception analyst Ben Wooden. “Lately customers have a tendency to carry onto their smartphones for no less than three years, so having two flagship launches a yr could now not be needed.”

Encouraging on-line purchasing

An enormous focus for Samsung in the course of the pandemic is boosting on-line telephone gross sales, one thing that hasn’t been an enormous market within the US. Right here, most individuals purchase their telephones from carriers like Verizon and AT&T, they usually often no less than have a look at them in individual earlier than making the acquisition. However the pandemic has compelled many shops across the nation to shut, stopping folks from holding new telephones of their palms earlier than shopping for them. 

“Folks store on their telephones, however they do not store for telephones with their telephones,” Blackard stated. 

To make folks extra comfy with shopping for smartphones on-line, Samsung began providing contactless supply and elevated the return window for its gadgets to 30 days from 14. It additionally created a primary responders low cost for all of its merchandise, which is on par with Samsung’s worker low cost. 

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Since the pandemic began, the amount of US purchases made online across the phone industry has almost doubled compared with in-store, Blackard said. 

Samsung also will be offering virtual consultations starting this month, providing information that would-be buyers typically get when they go into physical stores — like detailing features of a device, explaining their phone plan and potential deals for the phone and answering questions. 

“From your computer, you’ll be able to just log in, and you’ll get a Samsung representative who can walk you through that purchase process as if you were there in a retail store,” Blackard said. He added that while the consultants initially will be Samsung employees, the company hopes to partner with others, like carriers, to provide the same sort of experience. 

Changing the in-store experience

For stores that are open, Samsung is rolling out a new “touchless digital retail mode” with the Note 20, Blackard said. Typically, people visiting stores pick up new devices and play with them before deciding to buy. Samsung’s technology will let people scan a QR code using their own devices and launch “a virtual experience of what it’s like to use the Note 20 on the device you have in your hand,” he said. 

“People might not want to touch a phone right now as they go into a store,” Blackard said. 

Samsung also knows it has to make its devices more attractively priced for consumers. After introducing the Galaxy S20 in March, Samsung offered “work from home bundles” that gave deals on equipment. And last month, it partnered with Postmates to give anyone who bought certain Galaxy devices a free year of Postmates Unlimited, the service that gives free delivery on orders. 

Though the new Note lineup doesn’t come cheap, Samsung plans to offer generous promotional deals for the phones. Note 20 buyers will get $100 gift cards, while Note 20 Ultra purchasers will get $150. Samsung also has trade-in offers to give up to $650 for older devices, and it’s expanded its upgrade program, which lets device owners get a new Galaxy phone every year. 

And Samsung on Wednesday detailed a new partnership with Microsoft for a gaming bundle that includes three free months of Xbox Game Pass Ultimate and a Bluetooth controller. The two companies also have worked to bring Android apps to Windows and include other productivity features in Samsung mobile devices, something that’s attracted more buyers and could appeal to people who are working from home. 

“The Note occupies an evolving space in Samsung’s lineup,” Reticle Research principal analyst Ross Rubin said. “Samsung has shifted it toward productivity enthusiasts.”

Future products

Huawei, which sells most of its devices in its home country of China, has already made some design tweaks to its phones, like adding a temperature sensor to its Honor Play 4 Pro so the smartphone can work as a thermometer

Samsung isn’t ready to talk about changes to its devices, Blackard said, but it’s looking at three broad areas for innovation: fitness and health; shopping; and entertainment. 

The areas “are very exploratory,” Blackard said. Samsung won’t be deploying new services or features immediately but considers them “areas of investigation and product collaboration to bring these solutions to market.”

When it comes to fitness, Samsung is exploring tools to help people “figure out ways to exercise from home,” Blackard said. For health, Samsung is looking into features to support telehealth, those digital doctor appointments more people are having during the pandemic. 

“How do we dive deeper with consumers on some of the things that they’re going through and then ultimately craft solutions around that?” Blackard said.

When it comes to retail, Samsung is exploring ways to improve the online shopping experience. “Considering all the technology we have in these [new Note] gadgets — 5G connectivity, nice augmented reality options, three cameras — the cell purchasing expertise remains to be fairly fundamental,” Blackard stated. 

And with leisure, Samsung is contemplating the way it may also help folks get pleasure from concert events, sports activities, films and different content material from house as an alternative of in individual. Reasonably than create its personal providers — one thing Samsung has struggled with — it is opted to accomplice with different firms over the previous a number of years, like working with Microsoft to supply Xbox Cloud gaming on the Be aware 20. It is taking a look at much more methods to work with companions in leisure, Blackard stated. 

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Shara Tibken