From Pro to Ultra... Why Do Phone Models Keep Increasing?

Smartphone Market Stagnant for Years
Manufacturers' 'Premiumization' Strategy Useful
Growing Discontent Over 'Tiered Segmentation' Among Some

Galaxy S23, Galaxy S23+, Galaxy S23 Ultra. iPhone 14, iPhone 14 Pro, iPhone 14 Pro Max...

These are the latest flagship smartphone models from Samsung Electronics and Apple. Both companies offer three different models each. The performance varies greatly depending on the model. Not only the screen size and camera resolution but also the semiconductor chips installed in the phones differ. Why has the smartphone market developed such a complex 'grading system'?

Increasing Segmentation of Smartphone 'Grades'

Samsung Electronics' flagship smartphone Galaxy S23 segmented into three models / Photo by Samsung Electronics

It is common to refer to the core new product of the year from smartphone and electronic device manufacturers as a 'flagship.' Originally a naval term, flagship means the command ship with a flag. For manufacturers, it signifies a leading product.

Flagship products incorporate the most advanced technology developed by the company. Samsung's latest flagship, the Galaxy S23, includes next-generation components such as a 200-megapixel camera and Qualcomm's new Snapdragon 8 application processor (AP). Correspondingly, the price soars to premium levels.

Flagships are also where the most active 'grading' of smartphones occurs. For example, the Galaxy S23 lineup includes the standard S23, the S23+ with an expanded display size, and the S23 Ultra, which features a rear camera equipped with a 200-megapixel image sensor.

Apple, which has led grading segmentation, is reportedly planning to increase the number of iPhone 15 models to as many as four when it launches in September this year. They plan to add an 'Ultra' grade above the existing top model, the Pro Max.

Product Splitting Useful for Maximizing Demand and Risk Diversification

The model segmentation sales strategy is useful for premiumization and reducing manufacturing costs. The photo is unrelated to specific expressions in the article. Photo by Yonhap News

Smartphone manufacturers have been segmenting product grades for quite some time. They typically add a 'Pro' model behind the standard product to include advanced features. However, the number of grades is increasing, with the addition of larger '+' models and even Ultra models that differ fundamentally from the base models.

Why has the smartphone market become particularly intense in terms of grading? This stems from the characteristics of flagship smartphones. Typically, flagship products are high-priced electronic devices easily exceeding 1 to 2 million KRW. However, manufacturers must develop new flagship products annually to compete with rivals. In other words, consumers need to replace their phones costing hundreds of thousands of won every 1 to 2 years for the business to be profitable.

From the seller's perspective, broadening the price 'spectrum' of flagship products to attract as many potential customers as possible is advantageous. For example, the price range of the S23 spans from a minimum of 1.15 million KRW (base model with 256GB RAM) to a maximum of 1.96 million KRW (Ultra model with 1TB RAM), satisfying diverse customer demands.

In fact, Samsung's U.S. branch stated in a February 2020 interview with the U.S. IT media 'Engadget' that the 'model splitting' sales strategy is "an excellent way to provide premium products to customers at appropriate prices."

Model splitting inevitably draws customer attention to the highest-grade products. When the iPhone 14 launched, consumers were enthusiastic about the 'Pro Max' grade equipped with the latest A15 processor and other new technologies. Similarly, netizens are focusing on the Ultra model camera of the S23, which boasts so-called 'unprecedented' performance. Product splitting highlights the top-tier models.

The Paradox of Grading... Could the Standard Line Become Neglected?

Some people express fatigue over the excessively diversified 'model segmentation.' / Photo by Yonhap News

Manufacturers are expected to continue focusing on 'grading.' Global smartphone shipments peaked at 1.4734 billion units in 2016 and have been declining since (market research firm IDC). Maximizing demand for flagship products and actively upgrading to increase business margins is a strategy that inevitably gains popularity.

However, consumer fatigue with model segmentation is also significant. There are voices pointing out the paradoxical situation where flashy new features and advanced semiconductors are concentrated only in higher-end models, while standard models become increasingly sparse. Contrary to the original intent of offering product choices to as many customers as possible, a 'flagship within a flagship' may emerge.

In fact, when the iPhone 14 was released last year, the U.S. financial media 'Bloomberg' criticized that "unlike the higher-end models, the standard line did not receive the latest chip. It was the least impressive update in Apple's history." The 'Dynamic Island' (the UI around the punch-hole) that Apple promoted as a new feature was also not included in the standard iPhone 14.

As a result, the standard iPhone 14 reportedly had sluggish pre-order sales compared to previous models. At that time, Guo Mingchi, a researcher at Taiwan's TF International, said, "The standard iPhone 14 line showed poor pre-order sales. If the sales of the basic iPhone 14 and iPhone 14+ continue to be low, Apple will reduce shipments."

This content was produced with the assistance of AI translation services.