Samsung is reportedly planning a “Lite” tablet device for release early in 2014, enabling it to battle rivals such as Amazon’s Kindle Fire line and Google’s Nexus devices.
According to website SamMobile, the device will launch in the second week of January – meaning it may debut at CES 2014 – and will be accompanied by a portfolio of Lite smartphone variants also intended to target more price-sensitive consumers.
It was suggested the device will come in Wi-Fi and 3G versions, in “cream white” and “ebony black” colour versions.
The move is interesting because, so-far, Samsung is one of the few device makers that has been able to build a tablet business on more expensive products – the other notable company in this camp of course being Apple.
The launch of the original Kindle Fire and Google’s Nexus-branded devices (which has included Samsung-made smartphones and tablets) saw high-spec devices offered at very competitive prices, in order to drive consumption of content and apps from the Amazon and Google stores respectively.
And since then, a number of vendors (primarily from markets such as China) have offered lower-cost, lower-spec devices on a white-label basis, providing entry-level devices such as those sold by various retailers.
This has made it tough for many vendors to compete, due to the challenges associated with developing appealing and suitably specified differentiated products which are then offered at a low price.
What is not so clear is Samsung’s motivation for offering a low-cost tablet. The company has achieved a reasonable market share with its more expensive products, and according to IDC was the second-biggest vendor in this market during the third quarter of 2013.
Between them, Apple and Samsung make up 50 per cent of tablet shipments, with numerous “others” making up another 35 per cent. Third-placed Asus, which manufactures Google’s Nexus 7, had a share of 7.4 per cent, has less than half of that of Samsung (20.4 per cent), with fourth-placed Lenovo having less than a quarter (4.8 per cent) of the South Korean company’s volume.
A lower-cost device may give Samsung the opportunity to boost its market share closer to Apple’s 29.6 per cent (IDC figures), but potentially at the expense of margins – much depends on how effectively it can control its costs.
But there is also the problem that it may end up cannibalising its own sales. If the company is unable to convince buyers of the potential benefits of its more expensive devices, it may find customers opt for the lower cost, but still Samsung-made, alternative.
Separately, it was reported that Samsung is set to offer two tablets, with 8-inch and 10-inch screens, using the AMOLED screens it uses in its smartphones.
This could help it better compete in the premium market, against Apple’s retina-screen iPad Air and iPad Mini.