Global smartphone market is predicted to have only single-digit growth for the first-time.
Continuously, unfavorable conditions for Samsung Electronics smartphone business are popping out. Samsung will take hands off smartphone business in five years, said some people in the field. With forecast that Samsung will slowly take hands off smartphone, a perspective that the company has to seize new growth engine like IoT, electric car, health care, and devices, is becoming influential.
As a reporter and analyst in field for more than 10years, Samsung should not give up smartphone business and its possibility is also low.
Samsung can still make enough profit by smartphone. High-value added product can be made by slightly turning the business headings from ‘handset device sales first’ to ‘sales of device also with differentiated service and contents’ like Apple and Xiaomi.
Biggest reason why Samsung should not leave smartphone field is because it directly relates to next generation growth engine. Emerging businesses like IoT, health care, electric car, wearable devices all requires for hardware platform and control hub. And the most likely candidate for hub will be smartphone which had high-performance processor.
Services and contents focusing smartphone business model of Samsung Electronics next year will bring new wave to not only parts and materials industry but also to overall IT field. Harsh restructuring seems to await for hardware-related while service, solution, contents providing companies will have chance to penetrate and land on bigger market by nestling in Samsung’s arms.
Matured smartphone market, quality before quantity
Smartphone market growth marked climax in 2014, and now, is completely matured. Cramped market made narrow circumstances for Samsung to rapidly accelerate smartphone sales like before. Rather seizing their current market share seems precarious.
Yet, globally, number population using smartphone is 40%. Leftover 60% seem to give positive signs for smartphone makers but advanced markets and big consuming Chinese market already reached smartphone saturation.
Only emerging market with low purchase ability like Middle East and Africa is showing low smartphone supply ratio.
Growth of smartphone was led by developed countries like U.S. and Europe before 2011. After 2011, China rose as biggest smartphone demanding country. And now, smartphone growth will depend on new developing market.
India, Indonesia, Brazil, Mexico, Russia, Republic of South Africa, Taiwan, Philippines, and Nigeria
Samsung’s dilemma starts from which market to target. Smartphone market of already developed market has more replacement than new buying. In this kind of market, the trend separates into two. one is buying premium models of brands like Apple or other is choosing highly cost-effective models like Huawei’s. Samsung Electronics, with weakened brand image as ‘premium’ and unfavorable conditions to play chicken game with Chinese companies, became hard to choose what business headings for next years. If forwarding the wrong way, the nutcracker situation in between two rivals, Apple and China, will become more intense.
▲Galaxy A5. / Source: Samsung Electronics
Samsung started to carry out strategy of defending smartphone market share by strengthening Galaxy A, J, and E series to actively target emerging markets. The company’s total sales of smartphone is estimated to mark 320~340million. Widely assumed, the situations will be same or a little worse next year.
Point is that profit cannot be maintained by only sticking on sales of smartphone. Samsung also needs to sell contents and applications like Apple and Xiaomi to gain additional earnings. one way is to add fintech services like Samsung Pay, making new profit source.
Strengthening smartphone accessory business like adding new functions in smartphone protection case and external devices will be also effective.
Samsung will not only have to change the company culture but also the business strategy and requires for radical reform of its mobile communications division to cope the current nutcracker between Apple and China.
by Lyan Lee email@example.com
translated by Taegeun Kim firstname.lastname@example.org
December 22, 2015
성숙기에 접어든 스마트폰 시장...이제는 양보다 질로 이동해야
아래 영문 기사의 표는 제가 임의로 번역해서 표를 작성하여 추가함.
출처에 연도표시라도 있었으면 더 좋았을 것 같은데 아쉬운데 연도표시를 보니 2015년 자료로 추정됨.