Make once, sell twice.
Samsung is reportedly launching a program where the company sells refurbished high-end phones in the Galaxy S and Note lineups. Citing an individual with "direct knowledge of the matter," Reuters is saying that the program will go into effect as early as next year. The program will see Samsung refurbishing handsets returned as part of its yearly upgrade program in the U.S. and South Korea, and selling them in emerging markets.
The Galaxy S7, S7 edge, and the Note 7 are excellent phones, but with retail prices often north of $800, they're not a justifiable expense for many consumers.
According to Reuters, Samsung is looking to "maximize its cost efficiency and keep operating margins above 10 percent." By refurbishing returned phones and selling them for a lower cost, Samsung can maintain cost-competitiveness in China, where the vendor is seeing increased pressure from the likes of OPPO and Huawei. However, with the Indian government rejecting Apple's bid to sell refurbished iPhones in the country, it is unlikely Samsung will fare any better in the country.
The move also has potential to boost Samsung's revenue in the mid-tier segment, but it will undoubtedly affect sales of the Galaxy A series in emerging markets. The Galaxy A series sits one tier below the Galaxy S lineup, offering metal and glass designs with watered-down specs. This year's Galaxy A7 comes with a 5.5-inch AMOLED screen, octa-core Exynos 7580 SoC, 3GB of RAM, 16GB storage, microSD slot, 13MP camera, 5MP front shooter, and a 3300mAh battery.
If Samsung were to offer a refurbished Galaxy S7 for the same price, then there's no tangible reason to opt for a Galaxy A7 2016 over this year's flagship. That said, it has managed to sell handsets like the Galaxy J2 in droves, so if there's one vendor that can effectively market underwhelming phones, it is Samsung.
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