Samsung will release its new Galaxy S6. The South Korean company is up against one of the largest challenges of consumer electronics. People only have so much money.
Apple Inc. (NASDAQ: AAPL) has stolen a large part of that limited supply of consumer money with its iPhone 6 and iPhone 6 Plus. Apple may have already sold well more than 100 million of the new products. A much smaller amount of the market has been taken by smaller manufacturers that include LG, HTC and Amazon.com Inc. (NASDAQ: AMZN). Some people plan to spend money in the next few months on recently released products, including the iPhone 6, the Apple Watch and Huawei Watch. The purchase of most of these will cost a consumer several hundreds of dollars, either for the hardware or cellular service plans. That means these customers intent to empty their pockets in the future and may have decided already where that money will go.
The iPhone 6 remains the leading model at the four major carriers. Anyone who buys a smartphone online from the four largest carriers will find the iPhone at the top of their online store fronts or their retail stores. The carriers decided months ago that the iPhone is the best customer magnet. The four, which carry almost all the more than 300 million devices in the United States, have little reason to switch marketing dollars to a new product like the Galaxy 6. Each of the carriers remembers the poor sales of the Galaxy 5.
Samsung’s argument to consumers is that the Galaxy S6 has a dual edge display in one of its models. Its camera could be better than the one the iPhone 6 has. It may have the latest “selfie” front-facing camera. However, the Galaxy S6 is being launched into a consumer electronics market in which the consumer has already decided on a smartphone or a smartwatch. Put another way, Samsung’s target customer has already spent his money.
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