Samsung unveils new Galaxy S22 smartphone at Unpacked event, keeps old prices

In the industry’s first major launch of the year, Samsung Electronics Co on Wednesday introduced three versions of its flagship Galaxy S22 devices. Prices remain the same as last year: the base model will cost $800, while the larger Galaxy S22+ will cost $1,000. The top-notch Galaxy S22 Ultra, featuring a 6.8-inch screen and “S Pen” stylus, costs $1,200.

Worldwide prices are rising at their fastest rates in decades as the cost of raw materials, components and shipping increase. Roh Tae-moon, president of Samsung’s mobile business division, said he is willing to stomach the additional costs for the South Korean tech giant to lure a wider range of buyers after a year of slow shipment growth.

“The price was a strategic decision,” Mr Roh said. “Our top priority was to make sure our consumers felt that our devices were affordable and accessible.”

The global smartphone industry came back to life in 2021, showing annual growth for the first time in four years. Worldwide smartphone shipments grew 4% last year to 1.4 billion units, according to Counterpoint Research, a tech-market researcher, although it remained below pre-pandemic levels. Component shortages halted a strong year.

It was not long ago when two major companies in the premium smartphone market, Samsung and Apple Inc. raised the base price of its flagship devices by up to $1,000. Some customers have paid large sums of money for the devices, although the mass market has preferred the lower price tag. Users also maintain their current equipment for a long time.

Apple priced its iPhone 13 the same $800 as last year’s model, a move that industry analysts say helped the company post record sales and profits in the final months of last year. Samsung also boosted last year’s Galaxy S21 shipments after slashing the price by $200.

Remaining on pricing, said Tom Kang, Seoul-based research director at Counterpoint, caters to a broader audience and may make some buyers hesitant to upgrade, despite profit pressure due to rising key material costs. Not pricing aggressively on top of last year’s model or core competition makes a purchase decision easier, he said.

Not all phone makers have the financial strength or branding to hold back the price hike. The average wholesale price of smartphones has increased by 2% or less in recent years. But according to market research firm Strategy Analytics, during the first three quarters of 2021, prices rose 10% from the previous year. They are expected to grow 5% again this year.

This reflects varying levels of wiggle room, with Apple and Samsung having cushioned profit margins of 30% to 40%, while midtier or budget players, such as Xiaomi Corp., typically have markups of 10% or less. Let’s take it, said Wayne Lam, director. Research at technology consulting firm CCS Insight.

“The market for smartphones has consolidated into ‘haves’ and ‘have nots’ over the years,” Mr Lam said.

The Galaxy S22 trio of phones have more powerful processors, faster charging times, and better cameras for taking photos and videos in low light. The top-of-the-line Galaxy S22 Ultra packs in the most advanced camera technologies. The base model has a display that measures 6.1 inches diagonally, while the Galaxy S22+ comes in at 6.6 inches. The phones hit the shelves on February 25 in the US, South Korea and Europe.

“It’s the usual change — faster processors, better cameras. In that sense, it’s an incremental upgrade more than anything revolutionary,” said Brian Ma, vice president of equipment research at International Data Corp.

The South Korean company also unveiled three variants of its new Galaxy Tab S8 tablet during its launch event on Wednesday.

According to Counterpoint’s forecast, Samsung is expected to sell around 22 million units of Galaxy S30 devices this year, assuming the lack of existing chipsets doesn’t make the unexpected worse. This will be an improvement from the nearly 28 million units sold of last year’s model.

According to Counterpoint, annual smartphone shipments globally are projected to grow 7% in 2022 to around 1.5 billion units, with 5G helping drive sales across all price levels. It will exceed pre-pandemic levels.

Samsung’s mobile division had a rocky year. According to Counterpoint, when chip shortages were acute, the company’s third-quarter smartphone shipments were down 14% compared to the previous year. Its more affordable version of the Galaxy S21, which was expected to launch in mid-2021, became available only last month.

After a year of supply-chain challenges, Mr. Roh, the Samsung mobile business head, said the company is now in a better position. For example, it is entering into long-term contracts with component suppliers who are committed to placing orders in advance and optimizing shipping routes.

“Amidst the uncertainties, we realized we needed these changes,” Mr Roh said.