The Tech Bet

Samsung's comeback plan: Cheaper smartphones

Samsung's Q3 earnings plunge

It's been a tough quarter for Samsung. In fact, it's been a rough year as earnings are on track to be the worst in three. Competition from Apple's iPhone 6 and 6 Plus, as well as offerings from Motorola, HTC and from Chinese upstart, Xiaomi's Redmi 1S, ate into market share.

Samsung executives hope to turn things around by giving its lower-end smartphone line a makeover.

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Seong Joon Cho | Bloomberg | Getty Images

The tech giant said it would be using higher-end components in lower-end phones in order to gain traction in the fast-growing smartphone segment.

"The mid-to-low end market is growing rapidly, and we plan to respond actively in order to capitalize on that growth," Samsung Senior Vice President Kim Hyun-joon said during a conference call with analysts.

The trend of lower average selling prices will most likely eat in to margins, but the hope is volume should take Samsung back to a good place.

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"In terms of the profitability of the high end handsets, it may not be as easy as before to maintain high margins," Kim said. "We will continue to differentiate our products in order to secure a premium in the market," he added.

Samsung said it cautiously expects growth at its chip division and holiday demand for flat-panel TV's to deliver an increase in profit. It also expects digital appliance demand to increase driven by U.S. and European markets.

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