Last year, Samsung, once the undisputed leader in the smartphone market, began to concede to Chinese competitors. Which caused fair concerns among analysts. According to a report from both IDC and Strategy Analytics. Samsung smartphone sales for the third quarter of 2018 fell by about 13%. At the same time, a decrease of 10% observed in the second quarter of the same year, and by 2% in the first quarter.
Falling Numbers – Why Samsung broke :
“Samsung is losing ground to Huawei, Xiaomi and other Chinese competitors in major markets – in China and India. Samsung must solve its Sino-Indian problems. but before it is too late, ”said Strategy Analytics Executive Director Neil Mauston said
Samsung still manages to maintain a leading position in the smartphone market. But analysts suspect that hegemony will not last forever. The company’s profits are falling, the demand for flagships does not exceed expectations. And the fashionable folding gadget. Which was to assign the brand the status of the main innovator, turned out to be too fragile. to be competitive.
This downward trend is a clear sign that last year’s Samsung Galaxy Note 9. And Samsung Galaxy S9 devices were not able to demonstrate competitiveness. Which means the company is losing ground in the middle and low segments of the smartphone market. Reports The Verge portal.
At the same time, Huawei, one of the main competitors of Samsung, showed growth last year. In the third quarter of 2018, brand sales increased by 32%. Beating Apple and making the Chinese vendor second in the global smartphone market. Xiaomi sales are also growing – plus 20%. In the third quarter and as a result fourth place in the top of gadget manufacturers.
“Samsung’s strengths include technology, innovation … But it all works only at the headquarters level. Sales departments do not have the authority to offer discounts. They respond to changes, But they are expensive do not have flexibility ”. said an analyst at the Economics Time who wished to remain anonymous.
Despite the fact that the revenue of the mobile division of Samsung increased by 8%. Its profit fell immediately by 42%. Sales of the flagship Samsung Galaxy S10 were also recognized as “weak.”
According to the financial report result in 2019. Samsung ‘s revenue decreased by 4% compared to the previous year. But operating profit collapsed by 56%. This was the lowest rate of the company since 2016. When the company’s reputation damaged due to many cases of fire of the Galaxy Note 7 smartphone.
Risk is an Invasive business in Every Market:
When, after a couple of months, the Galaxy Fold was still sent for review. The network was flooded with angry reviews from journalists. The gadget broke in their hands a couple of hours after use.
For the first time, journalists and reviewers suspected something was wrong. When they were not only allowed to touch, but also look at the Galaxy Fold after the presentation. The other gadgets presented were in the public domain. And the folding miracle worth $ 1980 (about 127 thousand rubles at the current rate) did not decide to expose. This led to the appearance of many conspiracy theories. Starting from the version that the new Galaxy came out too ugly and quick, and ending with the fact. That the design of the device is inconclusive and will undergo significant changes.
It is believed that one of the reasons Samsung loses to some competitors is the company’s unwillingness to take risks and try something new. In February, the company was one of the first to introduce a smartphone in a new form factor. The Galaxy Fold folding gadget screen can bend, which means it can increase or decrease in size. But, unfortunately. The risk did not justify itself, and the South Korean vendor overwhelmed by failure.
Some reviewers took off the film from the screen. Which turned out to be some kind of protector that cannot be removed – Samsung forgot to warn about it.
Yet, not only the protector was responsible for problems with the screen. One of the observers said that his smartphone broke after one day of use. One half of the Galaxy Fold’s screen began to flash unexpectedly. At the same time, the film was in its place.
Difficulties at Samsung:
It is known that despite a large number of professional managers within the company. it was Li Jae Young who took the main part in planning the long-term strategy of Samsung. And also actively established a dialogue with competitors – Apple and Google
When talking about the difficulties at Samsung. One cannot fail to mention the criminal case against the actual head of the company Lee Jae Young. In 2017, he was sentenced to five years in prison, subsequently commuting the sentence to 2.5 years probation. He released in 2018, but now, in connection with the resumption of the case, he may again face a prison. It expected that extra charges may be brought against him.
Obviously, finding the chief executive behind bars or even a protracted lawsuit can negatively affect Samsung’s business.
Samsung has to manoeuvre in the ongoing trade war between the United States and China. As well as look for ways out in a situation related to Japan’s restrictions on the buy of certain materials and parts.