Fan Edition
Samsung Electronics’ (005930.KS) mobile marketing team was excited back in August of 2016 when the company released the Galaxy Note 7, the successor to the Galaxy Note 5, and features such as a dual sided curved display and support for HDR (High Dynamic Range). In South Korea, where the phone was released first, demand was high, beating previous model pre-order records and Samsung found itself a bit short of units when it began international release, but for a good reason. In days that ensued, Samsung received positive reviews and the Note 7 was on its way to becoming a star in the Samsung Galaxy lineup.
Unfortunately that did not last, with reports of the Note 7 bursting into flames as the battery overheated, forcing Samsung to issue a ‘soft’ recall of the device only four weeks after its release, followed by a more formal recall about two weeks later, a marketing nightmare for the company. But it did not end there, and the replacement phones that were issued to those consumers returning their Note 7’s under the recall, also began to catch fire, prompting the company to issue a global recall and end production for the Note 7.
Samsung’s marketing department is aggressive, and could not just walk away from such a public relations disaster, and nine months after the disastrous end to the Note 7, the company issued the first ‘fan edition’, under the marketing story that the phone was so popular, despite the ‘issues’, that fans were clamoring for the phone, and this, a refurbished version of the Note 7 (with a new battery supplier) was the answer to that demand at least in South Korea where it was originally released. The company sold out all of its Korean inventory (~400,000 units), which were built from parts left over from the Note 7, and while it said it had no plans to produce any additional units there was talk that it was so popular that it should be released internationally. This was never done, although a limited number of Note FE’s showed up in Malaysia and a few other locations.
That said, the success for the FE was now ingrained in Samsung marketing’s zeitgeist, and while it took some time before the next Fan Edition hit the shelves (Galaxy S20 FE – 10/2020), Samsung used it to create a $700 version of the Galaxy S21 ($1,000) that retained most of the important features. The FE did have a plastic back while the original had a glass back, and it had a larger but lower resolution screen, and an MP second camera, where the S20 had a 64MP second camera, but it allowed Samsung to essentially lower the price of the S20, without actually lowering it.
With the release of an ‘Fan Edition’ tablet in May, and the potential release of a Galaxy S21 FE later this year, it seems Samsung has adopted the Fan Edition as a way to offer a bit of diversification without diluting the original product price, but it seems that plans this year are not going to be as easy to implement, with claims that Samsung has halted production of the Galaxy S21 FE recently due to a shortage of semiconductor components, and has or is considering reallocating Qualcomm (QCOM) processors from the FE to its foldable line.
Samsung sys it has not made a decision as to whether to suspend production of the S21 FE, which has not been formerly announced, but the company has said in the past that it will produce FE versions of its flagship phones. With last year’s S20 FE not being announced until September last year, Samsung still has time to make an official decision, but without a change in the prospects for semiconductor supply, it seems Samsung will likely be rationing components as the year progresses. While the Fan Editions seem to generate incremental sales of the company’s flagship lines, components will go to wherever the margin is the highest, and we suspect that is with foldables, which might put an end to both the Galaxy Note and the Galaxy FE models, at least until the component shortages are alleviated.
Unfortunately that did not last, with reports of the Note 7 bursting into flames as the battery overheated, forcing Samsung to issue a ‘soft’ recall of the device only four weeks after its release, followed by a more formal recall about two weeks later, a marketing nightmare for the company. But it did not end there, and the replacement phones that were issued to those consumers returning their Note 7’s under the recall, also began to catch fire, prompting the company to issue a global recall and end production for the Note 7.
Samsung’s marketing department is aggressive, and could not just walk away from such a public relations disaster, and nine months after the disastrous end to the Note 7, the company issued the first ‘fan edition’, under the marketing story that the phone was so popular, despite the ‘issues’, that fans were clamoring for the phone, and this, a refurbished version of the Note 7 (with a new battery supplier) was the answer to that demand at least in South Korea where it was originally released. The company sold out all of its Korean inventory (~400,000 units), which were built from parts left over from the Note 7, and while it said it had no plans to produce any additional units there was talk that it was so popular that it should be released internationally. This was never done, although a limited number of Note FE’s showed up in Malaysia and a few other locations.
That said, the success for the FE was now ingrained in Samsung marketing’s zeitgeist, and while it took some time before the next Fan Edition hit the shelves (Galaxy S20 FE – 10/2020), Samsung used it to create a $700 version of the Galaxy S21 ($1,000) that retained most of the important features. The FE did have a plastic back while the original had a glass back, and it had a larger but lower resolution screen, and an MP second camera, where the S20 had a 64MP second camera, but it allowed Samsung to essentially lower the price of the S20, without actually lowering it.
With the release of an ‘Fan Edition’ tablet in May, and the potential release of a Galaxy S21 FE later this year, it seems Samsung has adopted the Fan Edition as a way to offer a bit of diversification without diluting the original product price, but it seems that plans this year are not going to be as easy to implement, with claims that Samsung has halted production of the Galaxy S21 FE recently due to a shortage of semiconductor components, and has or is considering reallocating Qualcomm (QCOM) processors from the FE to its foldable line.
Samsung sys it has not made a decision as to whether to suspend production of the S21 FE, which has not been formerly announced, but the company has said in the past that it will produce FE versions of its flagship phones. With last year’s S20 FE not being announced until September last year, Samsung still has time to make an official decision, but without a change in the prospects for semiconductor supply, it seems Samsung will likely be rationing components as the year progresses. While the Fan Editions seem to generate incremental sales of the company’s flagship lines, components will go to wherever the margin is the highest, and we suspect that is with foldables, which might put an end to both the Galaxy Note and the Galaxy FE models, at least until the component shortages are alleviated.
RSS Feed