Samsung to Phase Out Feature Phone Business in India

Samsung, a South Korean phone manufacturer, plans to phase out the feature phone category in India. The decision was made in the wake of a steep drop in non-smartphone sales, and the company now wants to focus on mid to high-end devices instead.

Samsung’s decision to abandon feature phones stems from the fierce competition it faces in the low-cost phone market.
The company will, however, continue to sell phones in the mid-to-high-end range. According to reports, it will only release smartphones that cost more than Rs. 15,000 in India. Samsung, on the other hand, has stated that it will continue to sell phones in this price range in the future.

There are several reasons for the decision to abandon feature phones in one of the world’s most important phone markets. In India, the competition for such phones is fierce, therefore it is not necessary for Samsung to hold on. In the smartphone sector, it already has a sizable market share, particularly in 4G and 5G phone sales. Samsung intends to concentrate on creating an environment that will support next-generation mobile standards.

Furthermore, following the Covid-19 outbreak, there is a huge demand for cheap mid-range phones. People are more motivated to purchase low-cost, high-value phones. In recent months, the attraction to basic phones has waned.

In India, Samsung anticipates a significant drop in feature phone sales

According to Counterpoint, India’s feature phone market shrank by 39 percent in the first quarter of 2022. It claims that rising retail inflation is causing a decrease in demand for such phones. Samsung, meantime, has dropped from first to third place in the feature phone market share.

According to the research agency, low-cost feature phones only accounted for 1% of the company’s total quarterly shipments in terms of value and 20% in terms of volume. This will leave a space for Nokia, Itel, and others to fill.

Samsung is now concentrating on mid to high-end products. In March, it took the lead with a 22 percent market share on handsets costing Rs.15,000 or more. According to Counterpoint, Samsung is the most popular 5G smartphone brand in India, which should help it make a more informed selection.

Similarly, India has a PLI (Production-Linked Incentive) scheme for locally manufactured items. However, in order to receive the perks, Samsung must create phones that cost more than Rs.15,000. This could have influenced the phone manufacturer’s decision.
If the plan is carried out, the company will discontinue selling feature phones in India by the end of the year.

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Do you believe Samsung’s move to phase out the feature phone sector in India would prompt other major OEMs to follow suit? And do you think these phones are still useful today? Please share your thoughts in the comments section below.