Before we proclaim 2016 being the year of the Samsung, with its flagships besting reviews and selling in droves, yet other good news have hit the web about Sammy doubling down on sales of its fine tuned but dated flagships (S7 and S7 Edge). These refurbished smartphones will sell at a fraction of the price of its current flagships according to sources privy to the matter that reached out to Reuters
These will be sourced from users who signed up for its one-year upgrade program who return their old devices for new ones. Samsung will then refurbish and sell them far much cheaper than they retailed for before leaving shelves.
Among the scanty reasons for going this direction is — Samsung wanting to maximize cost efficiency of its products while keeping its operating margins high of 10%, after recording a record Q216 profits, after years of sluggish sales. It is believed that this program will revive Samsung’s fortunes in emerging markets like India, China among others where it’s top of the line flagships are prohibitively priced, limiting potential customers that instead opt for budget smartphones from other brands.
Sammy is assumed to wanting to out compete these budget brands, them being a particular target since they sell highly specked smartphones at a lower price points. This hurts Samsung’s business at the bottom line.
So what better way to out-compete them than sell refurbished flagships? However it is believed that Samsung itself might cannibalize on sales of its mid-tier handsets as consumers might be lured to refurbished handsets than its new shiny mid-range smartphones.