Samsung, the world's No. 3 handset vendor behind Nokia and Motorola, has so far focused on the medium and high end of the market and has no products for the low end, where most of the volume and growth is coming from.
"We're looking into that segment. We're doing it now. But we want to go into that market in a very controlled way. We won't enter into that bloody competition right away," Samsung's European mobile communications chief Juha Park said in an interview at the technology trade fair CeBit here.
Park specifically said his company would not come out with ultra-cheap handsets priced at $30 or $40, like Motorola, but was looking at slightly higher-priced cheap phones that still contain some special features.
"We want to keep our brand identity, even in that low end of the market," Park told Reuters. "We want differentiation in design, form factor, features and other values."
He declined to say when Samsung would introduce its first cheap models, but said his company was developing models now.
Samsung's smaller South Korean rival LG Electronics said three weeks ago it was preparing a similar move to address the lower end of the market with $50 and $60 models.
"Samsung will have to come up with a cheap phone or see its market share tumble," said analyst Ben Wood market research group at Gartner.
Due to its lack of cheap phones, Samsung's market share slipped to 12.1 percent from 12.2 percent in the fourth quarter, while Nokia and Motorola benefited from booming demand for affordable handsets in emerging markets like India.