Samsung attacks Chinese rivals with new mid-range Galaxy phones

The Galaxy A5 and A3 will come to China in November

Samsung's Galaxy A5 is headed to China.

Samsung's Galaxy A5 is headed to China.

With Chinese vendors coming out with high-spec phones at affordable prices, Samsung is hitting back with two handsets sporting "metal unibody" designs that'll be targeting consumers in China with mid-range prices.

Samsung announced Friday the Galaxy A5 and the Galaxy A3, a pair of Android smartphones. China was the only market the company specifically named of the "select markets" where the phones will be available starting November. The Korean electronics giant wouldn't give an exact price, but said the devices would be "mid-range additions" to its smartphone portfolio.

In its announcement, Samsung highlighted the metal and slim design of the phones. Previous Samsung handsets have often come in plastic casings, a design choice that has become a frequent complaint among critics as rival vendors, including Apple and HTC, have incorporated aluminum into their flagship devices.

But now even Chinese vendors are making phones with sleek metal frames, and eating away at Samsung's market share in the country.

Once, the Korean electronics giant had consistently led the Chinese market as its biggest smartphone vendor. But in this year's second quarter it was ranked fifth, behind four Chinese companies, including Lenovo and Xiaomi, according to research firm IDC.

IDC is still working on finalizing its third quarter smartphone market data for China. But globally Samsung's market share dipped during the period, while Xiaomi rose to become the world's third largest smartphone vendor on strong sales in China.

Samsung's earnings have also taken a hit. In this year's third quarter, the Korean company's operating profit from its mobile devices division fell year-over-year by 74 percent.

To re-energize its smartphone business, Samsung said on Thursday it plans to focus more on developing less expensive phones, and using better materials such as metal frames in its high-end devices.

Both the Galaxy A5 and the Galaxy A3, built with metal casings, seem to reflect those plans. The Galaxy A5 is the thinner of the two at 6.7 mm, and has 4G connectivity, in addition to a 1.2GHz quad-core processor, a 5.0 high-definition Super AMOLED screen, and a 13-megapixel rear camera. It has 16GB of internal storage, a micro SD slot for more memory, and 2GB of RAM, along with a 2,300 mAh battery.

The Galaxy A3 has lesser specs, including a smaller 4.5-inch display with a 960 by 540 screen resolution. It still comes with a 1.2GHz quad-core processor, but has a rear-facing 8-megapixel camera, 1GB of RAM, and a 1,900 mAh battery.

Both run Android 4.4 and have a 5-megapixel front-facing camera.

China is the world's largest smartphone market, making it an important arena for Samsung to compete in. But increasingly, Chinese vendors are releasing more and more affordable devices, undercutting Samsung, which has historically tried to command a premium price on its products, said Bryan Ma an IDC analyst.

Among those Chinese vendors threatening Samsung is Xiaomi, which announced its newest flagship phone, the Mi 4, in July. The phone has a metal frame, a 5-inch HD screen, 3GB of RAM and a 3080 mAh battery, all for the starting price of only 1999 yuan (US$326), or less than half of what it takes to buy Samsung's Galaxy S5 in China.

By using metal unibody designs, Samsung's new A5 and A3 phones will at least offer more flash than its previous devices, Ma said. But the company will probably have to do more than compete only on price to beat its rivals in China.

Xiaomi, for example, not only offers affordable phones, but has built up a large and loyal fan base by engaging with customers through its online activities, Ma said. "They have a near religious following that constantly gives them feedback. Does Samsung have that emotional punch?" he said. "Just putting out a cheaper phone is one of the many ingredients you need."

Samsung did not disclose the other markets where the phones would be available from November.

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