Cheap Samsung smartphones in emerging markets, next year, “gate of life”
On December 31, according to the CNET Web site reported that Samsung will not abandon advanced smartphones, but it needs to figure out how to fend off competition from production of cheap smart phone manufacturers problems.
For a long time, Samsung sees Apple as its biggest competitor, but competing with Apple will not be the main problem facing next year. Samsung’s main rivals next year will be mobile phone manufacturers in China and other emerging markets, not Apple, it needs to be worried about millet, Micromax mobile phone manufacturer.
Samsung threatened changes show that the smart phone industry is rapidly changing, became an important source of growth in emerging markets. United States is no longer the future revenue in mature markets, such as the main engine of growth, China and India and other cheap mobile marketing will drive mobile phone manufacturer by revenue growth. For Samsung, next year’s main task is to restore these market leader position against competition from local manufacturers. Problem is that for this it is needed to make sacrifices.
Jackdaw market research company Research Analyst Jan Dawson, “said Samsung’s mobile phone business is growing fast the past few years, has grown into a big business. But there is not much evidence to suggest that future Samsung mobile phones businesses can be just as brilliant. ”
Samsung was not available for comment.
Market research firm IDC data show that in the global smart phone shipments, two-thirds sells for less than $ 200. Although the proportion of lower-priced machines will remain stable, but the actual shipments will continue to grow. High-end mobile phone iPhone and Galaxy 6 S5 starts at more than $ 500, Smartphone shipments this year will consist of around 16% slipped to 2018 is 14%. smart phone shipments next year China will account for almost one-third, most Chinese consumers to buy cheaper models.
Used to be one of Samsung’s strengths in emerging markets. For a long time, Samsung has been competing with Apple in expensive, high-end models, but it dominates on the lower-priced models, Apple did not lower-priced models. Samsung in China mainly through the provision of cheap models such as an advantage in the market. But it has made a big mistake: emerging-market consumers prefer to obsolete and outdated technology, they like the low prices of high-end equipment. Millet and other companies to meet their demands, quickly eroded Samsung’s market share.
Before subversion by millet, the Samsung is the market leader in China for 10 consecutive quarters. According to market research firm Strategy Analytics said the second quarter of 2014, things began to change. Third quarter, Samsung smart phone market share in China fell from 9% to 13%. Samsung in India did slightly better, with 23% market share to keep the throne of wisdom, the first expert manufacturers – but still lower than a year ago. Micromax 18% market share in second place.
IDC analyst Melissa Chau pointed out that “Chinese manufacturers will reflect the effects of the global mobile phone market in terms of price decreases, consumers no longer have to use high-end mobile phone to enjoy the excellent hardware quality or experience. The biggest problem right now is how low the price? ”
Falling Smartphone prices is one of Samsung’s weak third-quarter results. Samsung’s operating profit in the third quarter 4th consecutive quarter of decline, its lowest level since the second quarter of 2011. Samsung also said that mobile phones businesses during the third quarter profits fell by 74%, and warned that with the increased competition from the end of 2014, smart-phone business remained difficult to improve.
Many market research companies have pointed out that Samsung Smartphone shipments in the third quarter market share reduced to less than 24% one-third nearly a year ago. Samsung or five great wisdom master vendor shipments declined in only one company.
To address mobile phones businesses landslide problem, Samsung said it will “fundamentally restructure” product line, next models provided by 25%-30%. Samsung plans to release “the use of new materials and new design” of new smartphones and a new range of medium and low-end smartphones, increase in hardware configuration, and price competitiveness. Samsung also plans to a variety of devices using the same components in order to reduce costs.
In addition, Samsung would have switched to using their own Tizen operating system, improvement in the India market situation. CNET November reported that Samsung plans the end of 2014 in India unveil Tizen Smartphone. As of press time, yet Tizen Samsung smartphones.
Once regarded as Samsung reduce dependence on Android Tizen of the arms also help Samsung protect against China, India cheap competition in the mobile phone manufacturers. Tizen of Samsung’s plans to roll out starts at less than $ 100 cell phone, Android with Google One phone competition.
However, to take these steps will not be easy. Samsung may be hanging onto its market share, at the sacrifice of profits. Samsung’s high-end products cannot be ignored. Apple decided to take the high road from the outset, while profits and profit margins are high, but its market share has been affected. Samsung wants to preserve the title of the largest great wisdom master machine manufacturers, sacrificing profit so long.
Samsung must also address plans to go as far as problems with software. Samsung has invested heavily in software, the new hire hundreds of engineers, and even newly established software business unit, such as Media Solutions Center. However, most of Samsung’s software products are not able to attract the interest of consumers. However, in a piece of hardware is not enough to make the product unique on the market, the software will become more and more important.
In any case, for Samsung, next year is going to be a difficult year. Most important is that Samsung will be settled next year to avoid a repeat of Nokia or BlackBerry problem. Market research firm Kantar Worldpanel analyst Carolina Milanesi said, “I don’t think that Samsung knows what you want, but it must figure out how to a piece of hardware on the increasingly popular market for growth. ”