What will customers pay for style?
That's the question faced by the marketing teams behind the Apple Watch, whose 18k gold models are priced to start at $10,000.
The same issue confronts marketing teams for the new Samsung Galaxy S6 Edge, with its unusual front glass display that wraps partly around both side edges.
Pricing in the U.S. for the Edge and its more conventional Galaxy S6 cousin are due to be announced Thursday, with shipments expected as early as April 10. Based on prices already revealed in several countries, the unlocked version of the Edge could price out at 11% to 30% more than the Galaxy S6 with equivalent storage.
In nearly every way, the Edge and the Galaxy S6 are the same device, except for the Edge's unusual curved edges made of Gorilla 4-strengthened glass. Both phones have 5.1-in. displays and 64-bit processors, and both support Samsung Pay with magnetic and NFC payment capabilities and embedded wireless charging.
Even with such similarities, buyers in Turkey will pay 11% more for the Edge, and in the UK they will pay up to 30% more under one UK carrier's subscription plan, according to prices reported by Tech Times and others.
Samsung published pricing for an unlocked Edge with 32 GB at €699 (about US$767) in Spain on March 4 then more recently added 32 GB unlocked Edge pricing of €849 (around US$931). That's a 21% premium.
Is it worth it?
Value is in the eye of the beholder. A large part of the value of the Edge's styling (as well as for the top-line Apple Watch) will depend on what buyers think other people will think of them as they go about their lives using their new gadgets. Marketing teams know this, but they still spend enormous amounts of time studying how to put a price on such a perceived value. It's the essence of good advertising.
If the images in marketing videos and ads create the proper aura, that will help. Apple is known for its marketing prowess, and Samsung has benefited, some, from Apple's lead. So far, Apple's in-store marketing of the Apple Watch appears far more involved than any smartphone or smartwatch marketing campaign by any manufacturer.
But marketing alone won't justify a higher price for fashion: Much of the premium price for the Edge will have to come from something almost intangible and undefinable.
"Fashion still plays a big role in purchasing a smartphone," said Carolina Milanesi, chief of research at Kantar WorldPanel ComTech. "Having something that looks distinct and different from what you owned before matters a lot to consumers."
MIlanesi said she expects the Edge, unlocked, will cost $50 to $100 more than an equivalent-sized Galaxy S6 in the U.S. That would be well below the $164 price increase for the 32 GB Edge in Spain over the 32 GB Galaxy S6.
There is a higher cost in making the Edge's curved screen than the screen on the Galaxy S6, she noted. "It's not to be expected that Samsung would just absorb that increased cost, as that would then put in question the price of the Galaxy S6," she said.
Jack Gold, an analyst at J. Gold Associates, said in some ways the actual cost of the Edge is irrelevant, although he expects the Edge to cost 15% to 25% more than the Galaxy S6.
"Edge is meant to be a halo device, to show that Samsung can produce compelling devices as well as anyone," Gold said. "To that end, it appeals to those who must have the best, and the actual cost of the device is less relevant than the mainline device geared toward the masses like the Galaxy S6. That's not to say that Samsung doesn't want to sell a lot of the Edge devices, but Samsung could sell relatively fewer than the S6 and have the device be successful."
However much more the Edge is priced, analyst Patrick Moorhead of Moor Insights & Strategy said Samsung needs to be thinking of pricing its Galaxy S6 at 25% below the price of the iPhone 6 to have a chance to sell well. "That doesn't guarantee great sales, it just enables the possibility," he said. "Samsung needs to invest in marketing their differentiators in a clear way that means something to consumers."
Based on unlocked pricing in Spain with current exchange rates, the 64 GB unlocked Galaxy S6 will cost about $877 (€799), which doesn't come close to the discount Moorhead has in mind. The iPhone 6 with 64 GB is $749 unlocked (from an earlier $849), according to Apple's Web site.
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