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The primary target for the South Korean electronics conglomerate in the coming year will be China and other emerging markets, not Cupertino, Calif., home of Apple. It's companies like Xiaomi and Micromax that Samsung needs to worry about. The shift in threat is indicative of the quickly changing smartphone industry, where emerging markets represent a critical source of growth. Mature markets like the US aren't the drivers of future revenue. Instead, it's cheap devices in China and India that handset manufacturers are focused on. For Samsung, 2015 will be about clawing its way back to the top in these markets and fending off competition from local companies. The question is what it will have to sacrifice to do so.
"Samsung has had a very high-growth, very large-scale business over the past few years," Jackdaw Research analyst Jan Dawson said, "But there isn't much evidence that suggests they'll have a future that looks like their past."Samsung declined to comment, Already, two-thirds of all smartphones shipped across the world cost less than $200, according to market tracker IDC, While the percentage will stay steady, the number of low-cost devices will keep growing, the firm said, The high end -- devices that cost more than $500 unsubsidized, like the iPhone 6 and Galaxy S5 -- will drop to about 14 percent of all smartphones shipped in 2018 from iphone screen protectors amazon about 16 percent this year, IDC said, And China alone, where most consumers seek cheap phones, will account for nearly a third of all smartphone sales in 2015..
Emerging markets used to be one of Samsung's strong points. The company has long battled Apple over pricey, high-end devices, but it dominated in lower-cost sectors where Apple doesn't play. Samsung largely gained its strong position in places like China by offering old, cheap smartphones. But it made a big miscalculation: consumers in emerging markets didn't want old, inferior technology. They wanted high-end devices with low-end prices. Xiaomi and other companies met that need, rapidly boosting their market share at Samsung's expense.
Samsung dominated the Chinese smartphone market for 10 straight iphone screen protectors amazon quarters before Xiaomi knocked the Korean company out of its position, The shift started in the second quarter of 2014, according to Strategy Analytics, During the period ended in September, Samsung's share of the China smartphone market tumbled nine percentage points to 13 percent from a year ago, In India, Samsung fared a little better, holding on to the top spot with 23 percent share in the third quarter -- still a decline from a year ago, according to Strategy Analytics, The No, 2 vendor, Micromax, was close behind with 18 percent of shipments..
"The impact of upstart Chinese players in the global market will be reflected in a race to the bottom when it comes to price," IDC analyst Melissa Chau said. "Consumers no longer have to go with a top-of-the-line handset to guarantee decent hardware quality or experience. The biggest question now is how much lower can prices go?"That decline contributed to Samsung's weak third-quarter earnings report. The company in October reported its fourth consecutive drop and lowest operating profits since the second quarter of 2011. It also said third-quarter income in its mobile business tumbled 74 percent from the previous year and warned that conditions would remain tough in smartphones as competition heats up toward the end of 2014.
At the same time, market research firms said Samsung's global smartphone share dropped to less than 24 percent of shipments in the third quarter from nearly a third of all units a year earlier, It also was the only company among the top five smartphone vendors to see its shipment volume fall from the prior year, To counteract the decline, Samsung vowed to "fundamentally reform" its product lineup by cutting the number of models it offers by 25 percent to 30 percent, It also plans to release new smartphones iphone screen protectors amazon with "new materials and innovative designs," as well as a series of new mid- to low-end smartphones that compete better on price and hardware features, It also will try to use the same components in many of its devices to save on costs..
In addition, Samsung may turn to its Tizen operating system to boost its position in places like India. The company plans to launch its first device running the Android alternative in India by the end of 2014, CNET reported in November. As of the time of publishing, Samsung still had not launched a Tizen phone. Once seen as a way for Samsung to decrease its reliance on Android, Tizen could still help Samsung defend itself against lower-end competition from Chinese and Indian smartphone makers. Samsung now targets an unsubsidized price of $100 for Tizen phones, pitting them squarely against phones in Google's low-cost Android One program.
Still, none of these steps will be easy, Samsung may regain some of its share, but it will sacrifice its profitability in the process, The company also can't ignore the high end, where most of its profits are generated, Apple decided early on to provide only high-end devices, something that has kept its profits and margins high but has hurt its market share, Samsung, though, wants to stay No, 1, even if it means profits suffer, The company also will have to figure out iphone screen protectors amazon how much it's going to push with its own software efforts, Samsung has made a big investment in software, hiring hundreds of new engineers and even starting entirely new operations, such as its Media Solutions Center division, Most of the efforts have fallen flat with consumers, But in a market where hardware isn't enough to set its devices apart from others, software will become more important..