Over the years, Samsung has always regarded Apple for its biggest competitor, but the competition between Apple will not be the main problem they face next year. Samsung's main rival next year will be China and other emerging markets mobile phone manufacturers, rather than Apple, it needs to worry about is millet, Micromax and other mobile phone manufacturers.
Samsung is facing the threat of change indicates an important source of the smart phone industry changes rapidly, emerging markets become growth. United States and other mature markets are no longer the main engine of future revenue growth, such as China and India will drive sales of cheap mobile phone handset makers revenue growth. For Samsung, the main task is to resume next year on the market leader's position, against competition from local manufacturers. The question is what do this it needs to make sacrifices.
JackdawResearch analyst at market research firm JanDawson said, "Over the past few years, Samsung's mobile phone business has grown rapidly, has developed into a large-scale business, but not a lot of evidence that future Samsung mobile phone business can be as brilliant as in the past."
Samsung did not comment.
Market research firm IDC data show that in the global smart phone shipments, two-thirds less than the price of $ 200. Although the proportion of low-cost machines will remain stable, but the actual shipments will continue to grow. And other high-end phones --iPhone6 and GalaxyS5 bare metal price more than 500 US dollars, in the smart phone shipments in the proportion of about 16% by the year 2018 fell to about 14%. Chinese smartphones next year will account for almost a third of shipments, the majority of Chinese consumers will buy cheaper models.
Emerging markets used to be one of the advantages of Samsung. Over the years, Samsung has been in the high-priced, high-end models with Apple rivalry aspect, but it occupies a dominant position in the low-cost models, Apple did not lower-priced models. Samsung mainly by providing low-cost models to obtain an advantage in China and other markets. But it made a big mistake: Emerging markets consumers do not like outdated and backward technology, they do not like is the price of high-end equipment. Millet and other companies to meet their needs, quickly eroded the market share of Samsung.
Before being subverted millet, Samsung 10 consecutive quarters of China's market leader. According to market research firm StrategyAnalytics said in 2014 the situation began to change in the second quarter. Samsung's share in the third quarter, China's smart phone market fell 9 percent year on year to 13%. Samsung's performance in India is slightly better, with 23% market share to keep the largest smartphone vendor in the throne - but still lower than a year ago. Micromax with 18% market share in second place.
MelissaChau IDC analyst pointed out that "the impact of the global handset market, Chinese manufacturers will be reflected in terms of falling prices, consumers no longer have to use high-end mobile phone can enjoy the excellent hardware quality or experience. The biggest problem is that the price can be reduced How low? "
Smartphone prices Samsung is one of the reasons the weak third-quarter results. Samsung's operating profit in the third quarter is the fourth consecutive quarter of decline, the lowest level since the second quarter of 2011. Samsung also said its third-quarter profit handset division fell 74 percent and warned that with the competition by the end of 2014, the smart phone business is still difficult to improve.
Many market research companies have noted that the third quarter, Samsung's smartphone shipments market share reduced by nearly one-third a year ago to less than 24%. Samsung is still the top five smartphone vendors in shipments year on year decline of only one company.
To solve the problem of mobile phone business landslide, Samsung said it would "fundamental restructuring" product line offers models next year to reduce 25% -30%. Samsung plans to release "the introduction of new materials and new designs," the new smart phone and a series of new, low-grade smartphones, improvements in the hardware configuration and price competitiveness. Samsung also plans to use the same components in a variety of devices in order to reduce costs.
In addition, Samsung may turn to the use of their own Tizen operating system, improvements in the situation in India and other markets. CNET11 month reported that Samsung plans to launch the first in India by the end of 2014 Tizen smartphone. As of press time, Samsung has not launched Tizen smartphone.
Samsung was once thought to reduce dependence on Android weapons Tizen, Samsung also helps to withstand competition from China, India, cheap mobile phone manufacturers. Samsung plans to launch bare metal price of less than $ 100 Tizen mobile phone, AndroidOne phone to compete with Google's.
However, to take these initiatives will not be easy. Samsung may retain market share, possibly at the expense of profits. Samsung also can not ignore the high-end products. Apple outset decided to take the high road, although profits and margins are superior, but the market share has been affected. Samsung hopes to keep the largest smartphone manufacturers throne, at the expense of profits expense.
Samsung also plans must address the question of how far to go in terms of software. Samsung invested heavily in terms of software, the new recruit hundreds of engineers, and even set up a new software business sectors, such as MediaSolutionsCenter. However, Samsung most software products are not able to attract the interest of consumers. However, in a hardware enough to make unique products on the market, the software will become increasingly important.
In any case, for Samsung, next year will be a tough year. The most important is that Samsung will address how to avoid repeating the mistakes of Nokia or Blackberry problems next year. Analyst with market research firm KantarWorldpanel CarolinaMilanesi said, "I do not think Samsung know what they want, but it must figure out how to seek growth in the increasingly popular hardware market."