Samsung is a corporate machine, and like most corporate machines, the company is driven by profits. Samsung has seen success with the Galaxy S6 and Galaxy S7, but it isn’t taking anything for granted. Samsung is now looking for ways to maintain its high earnings, and according to Reuters, the company’s next bet is to sell refurbished smartphones.
The refurbished program will reportedly use phones from customers who take advantage of one-year upgrade programs. Samsung will refurbish the used smartphones and then sell them at a lower price. This approach allows Samsung to employ a new line of defense against lower-cost competitors in countries like China, where Samsung is working to maintain and grow its market share.
The refurbished approach is one that Samsung’s primary competitor, Apple, has employed with success. Samsung, however, could face product redundancy with the proposed refurbished program. While Apple sells just two models of the iPhone, Samsung has an enormous line-up of smartphones that span multiple market tiers. While Samsung’s high-end and entry-level offerings should remain unscathed, its upper mid-range market could take a hit.
Samsung’s Galaxy A series offers premium build quality with specs lower than those of the company’s flagships. This family of products allows customers a lower-cost, but still high-end, alternative to the top-tier flagships that can retail for more than $800. With refurbished flagships likely being similarly priced to the Galaxy A line, it’s difficult to see many customers opting for the Galaxy A devices.
The program will reportedly begin as soon as early 2017. We’ll keep you posted on further updates and rumors surrounding Samsung’s plan to sell refurbished devices.
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