Samsung Galaxy Note 3 success could push smartphone prices higher

In all likelihood, India will get the Samsung Galaxy Note 3 on September 25. While we haven’t had an official word from the company, we have our doubts about Samsung skipping a market as big as India in the initial rollout. Even more so given the Indian predilection for phablets. Samsung hasn’t had any defeats with the Note series of smartphones, which is one of the most coveted gadgets every year. But the downside is if the Note 3 is a big success, there’s a chance it could disrupt smartphone price dynamics in the mid-range to high-end segment and push prices higher. Here’s how.

The Note 3 brings some of the best hardware specs, but judging by the pricing trend these days and the terrible state of the rupee against the dollar, the Note 3 could very well launch close to Rs 50,000. But that still won’t make it the most expensive phone in India at the moment. That one is the HTC Butterfly S, which trumped the Sony Xperia Z Ultra to become the most expensive phone in India, priced at Rs 54,990. In comparison, the Sony smartphone is priced at Rs 46,990. Samsung has traditionally occupied the spot between HTC and Sony in terms of pricing. If you compare the launch prices of the Xperia Z (Rs 38,990), HTC One (Rs 42,900) and the Galaxy S4 (Rs 41,500), this is pretty evident. So the Note 3 will also likely sit between the Z Ultra and Butterfly S.

The Note 3 might push smartphone prices up even higher

We can also take an educated guess of the Note 3’s price based on the Galaxy S4’s launch price. While the S4 is packed with the best hardware specs, the Note 3 manages to come out on top in many aspects including display size, camera performance, 4K video, battery, stylus input and new TouchWiz features. Surely, this would have commanded a higher price than the S4’s 41,500, even if the rupee had not fallen so drastically.

Another indicator is the increase in price of the Note devices year over year. The launch price went up by Rs 5,000 between the first and second generation Notes. Once again, the dollar price will make its weight felt and we can expect a steeper jump this time around.

Taking all factors into consideration, don’t rule out a Rs 8,000-10,000 bump from the Note 2’s Rs 39,990 launch price, which puts it in the Rs 47,000-Rs 49,000 territory. That should be the case unless Samsung pulls a fast one on us. Now, there’s no guarantee for success, but if the Note 3 is a big hit, then we could be in for some exorbitant prices in the near future in the high-end segment. A frightening prospect is that with lucrative EMI schemes, cash-back and exchange offers, and with their marketing muscle, Samsung could very well manage to sell a boatload of Note 3s at that high a price. Which just gives others leeway to stretch out and reap higher margins.

The Note series has been quite successful for Samsung

And we are not just talking big-name manufacturers. The likes of Micromax, Xolo and Intex are already pushing up towards Rs 20,000 and the most recent launches even spill over beyond that number. That’s thanks to phones like the S4, HTC One and Xperia Z Ultra pushing the 40,000 mark. This is an unfamiliar territory for Indian manufacturers, but having gained some traction in the fast-expanding smartphone market, they are reaping rewards of brand visibility and smartphone-oriented cultural trends.

Samsung caused a massive deviation in the smartphone industry two years ago with the Note launch. Its great success led to the phablet phenomenon that’s taken India, among other markets, by storm. And the Note 2 did even better in terms of sales and is still a hot seller. If the Note 3 clicks at a much higher price in the Indian market, then we could be in for a serious increase in prices across the board.