Samsung Rex – King Cnut

Rex is not strong enough to hold back the tide of Asha. 

• Samsung has renewed its assault on the forgotten 1bn with the launch of a new range of mid-range phones called Rex.
• There are three devices the Rex 60, 70, 80 and 90.
• The devices are all dual SIM (which Samsung actually does very well), full face touch, browsing through Opera and it looks like applications through Java.
• Pricing is in line with the Asha series of devices with the range having been set at $75-$120 in India.
• How this related to Bada and the Wave devices in unclear but it looks to me like Samsung is looking to push this range way down through the tiers which is why Bada has not been used.
• Bada supports both Linux kernel and an RTOS and its ability to go towards the higher end of the range has limited Samsung’s ability to push it very low.
• So it seems like this will be the new low-end platform with Bada being consigned to the growing graveyard of mobile OSs.
• It looks like Rex is based on an RTOS, with Samsung’s proprietary OS and TouchWiz Lite UI on top.
• Third party apps look like they are being delivered through Java as well potentially through the Opera Mini browser meaning that the offering is going to be pretty thin.
• Then again at these price points, does it really matter?
• These compete with the very low-end of Android, but like Nokia, they will perform much better.
• Hopefully Samsung has learned the secret of making cheap phones which is to produce many models off a single platform and a single build of software.
• Given, that these devices are all being released at the same time, I am hopeful that this will prove to be the case.
• No matter how successful these devices are, the brutal environment at the low end of the market is going to keep margins under pressure.
• Hence, while these devices might help Samsung grow volumes, revenues and profits, there is likely to be some pressure on margins.
• This launch does not make me too concerned regarding Nokia’s Asha range as Samsung cannot be too aggressive for fear of diluting the huge margins it earns from high end Android.
• Furthermore, the market at the low-end is already brutally competitive meaning that Samsun’s effect on pricing is unlikely to be anything new.
• However the low end is plenty big enough for a few players to survive.
• Asha remains Nokia’s life blood and a potential plan B should Microsoft continue to fail in the mobile handset market.