Samsung Electronics and LG Electronics will reduce the price of their two ten million sellers to less than $100 in emerging markets. On January 1, an industrial source said that the both companies decided to decrease the price of their best sellers, SGH-E250 of Samsung and the chocolate phone of LG, to less than $100 in the first quarter in order to increase their market shares in the low-end market.
This is to take the lead in the emerging markets where the price competition is fierce by offering the globally successful models at cheap price. It is possible since these models were sold more than 10 million units, surpassing the break-even point. Therefore, they can save the money for supply and the popularity of these models will help them to save the marketing costs. LG Electronics’ chocolate phones unveiled to the world since May, 2006. The price was $350~400 in the beginning and slightly reduced to $200s in the third quarter of the last year. Currently, the price differes from countries ranging from $120 to $170.
Samsung Electronics’ SGH-E250 has maintained $200 for a year since the launch and recently went down to $130. The both companies already surpassed the break-even point of these products by selling 13 million units of SGH-E250 and 15 million units of the chocolate phone in the world. And the both phones have been in the market for a year (SGH-E250) and a year and half. Therefore, the two makers can make profit even if they lower the price to less than $100. Managing Director Min Yong-ho of Samsung Electronics, the head of the Malaysian operation, said, “E250 model is being sold at KRW 120,000. We believe we will be able to offer the phone at less than $100.”
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