An existing stiff competition among Samsung Electronics and Apple in India is set to grow to a new level. The Korean company is planning to spend a record sum on marketing and promotion for the new flagship Galaxy S7 and S7 Edge that will be unveiled next week, with its US rival pondering a counter-strategy.
Samsung may invest about Rs 100 crore on marketing its latest smartphones, which will be launched in India around March 8 and will be on sale from third week of March at prices that could match Apple's iPhone 6s models. It has asked dealers to ensure maximum mileage for the Samsung brand on shop floors.
In order to take on Samsung, Apple has told dealers that it will have additional consumer promotion and is considering reducing prices on some models. The company has lined up a counter-marketing budget of Rs 30-40 crore.
According to sources, it is for the first time Apple is reacting to a flagship launch from Samsung in India, signifying how important the Indian market is emerging for both the smartphone giants. While Samsung is tightening the trade, Apple may come out with something big.
Samsung India has issued an advisory linking payment to dealers to the visibility of its branding on store fronts and inside. It also asked retailers to ensure its brand billboard is the first one above the shop entrance and only its brands are displayed on store walls.
Samsung may offer Galaxy S7 and S7 Edge at a cheaper rate as compared to the Rs 50,000-plus launch price for last year's flagship Galaxy S6. The company is looking at a price of about Rs 45,000 to compete with iPhone 6s that's selling at Rs 44,000-45,000. The Korean company has warned the dealers that any discounting will lead to strict disciplinary action, including blacklisting, since it does not want a price war on the new models. Apple distributors have started taking feedback from the key trade partners in India on the level of support that might be required to counter Samsung's new launches.
According to a senior trade partner of the company, Samsung's recent launches such as Galaxy A5 and A7 had gained a lot of share, which has already irked Apple. Apple has now informed the traders that it will offer additional consumer and trade promotion on its entire line up and may also cut prices.
Both companies are engaged in a fierce battle to dominate the premium smartphone segment in India, where handsets are priced over Rs 30,000. The Galaxy S7 and S7 Edge are crucial for Samsung, which wants to be the clear leader in this segment.
On the other hand, Apple also does not wish to lose ground after chief executive Tim Cook recently spoke about investing more in India to gain lead.