Samsung Supposedly Shifting Focus from Smartphone Market Growth to Profitability

[dgstorm]

An unnamed Samsung exec was supposedly quoted claiming that the Korean company will begin shifting their focus away from growth in the smartphone sector, and will instead turn to profitability and maintaining marketshare. Here's the first quote,

"We have been seeking growth in terms of shipments for years. Samsung is preparing for the post-smartphone era and that's why our handset unit has identified profitability as a priority over growth."

As you can see, it appears that the Samsung leadership has recognized the writing on the wall... the smartphone industry is beginning to saturate, and it's time to shift gears. The same Samsung exec also indicated,

"Samsung will keep the company-set share according to markets. We will launch promotional campaigns if we have to. But the company will be unlikely to initiate cash-intensive promotions to clear inventory and increase market share."

The main indicators cited by the exec to this new shifting paradigm is the growing lukewarm response from consumers toward "fancy features," and the fast growth of budget Chinese smartphone vendors. There is some truth to what the exec has stated. With companies like Huawei, OnePlus and others, smartphones with flagship level features have become much more affordable. It's easy to get a powerful device for $300-$400 with 90% of the same features as a $700 phone.

Here's one last quote from the source of this article with a few more details,

The Samsung executive said the strategy shift won't cost the company's handset business too much given the firm's technology leadership, strong market position and diversified business portfolio.

"We expect Samsung's financial position to remain intact over the next 12 to 18 months, backed by its robust cash generation," said Fitch.

Do you think Samsung's move is too soon, right on time, or a little late?

Source: Samsung to overhaul smartphone strategy for profits

 

[mountainbikermark]

Hence why the Tizen rumor might be more than a rumor. An in house made operating system will be more profitable per unit than continuing with Android.
At the same time of their parts for mobile devices falls under their definition of mobile division it could be the days of Apple getting their screen parts for almost free are over as well.

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[cr6]

It was inevitable.... smartphones have reached that same plateau that laptops reached 2-3 years ago, so it makes sense for them to shift their focus to other areas. There isn't much more that can be done to improve their high end smartphone market, and with Samsung always on the cutting edge, I think the time is right for them to make this move.
Just like my 4 y/o high end laptop still performs flawlessly and does everything I need it to do, such is the case with today's high end flagship smartphones. I think it's a smart move on Samsungs part.

S5 tap'n

 

[liftedplane]

Hence why the Tizen rumor might be more than a rumor. An in house made operating system will be more profitable per unit than continuing with Android.
At the same time of their parts for mobile devices falls under their definition of mobile division it could be the days of Apple getting their screen parts for almost free are over as well.

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that doesn't add up, an in house OS requires developers programmers ui people etc etc... all of this they have to pay for.

using android they realistically only have to use android exactly as it's built, nothing extra. that would save them money.

However they can't just leave well enough alone.

 

[GAstorino]

Yes. Just quit adding your own wizbang junk onto the units which slow things down and leave it clean should save some money. Why also not add extra ram as well this 2 gig, 3 gig, 4 gig,etc. upgrade every year is crazy. Ram is cheap. Bump it to 16 gig at least and put in a 256 gig memory card option especially if you are going to do 4k. The phones will take up to a 2 terabyte memory. People use them as laptops now so make it feel like one and maybe you will sell more and make more sales.

 

[Mustang02]

Yes. Just quit adding your own wizbang junk onto the units which slow things down and leave it clean should save some money. Why also not add extra ram as well this 2 gig, 3 gig, 4 gig,etc. upgrade every year is crazy. Ram is cheap. Bump it to 16 gig at least and put in a 256 gig memory card option especially if you are going to do 4k. The phones will take up to a 2 terabyte memory. People use them as laptops now so make it feel like one and maybe you will sell more and make more sales.

That "wizbang junk" makes them tons of money.

Couple things: Phone RAM isn't cheap. It's not like your laptop or desktop. Adding more than 4GB is waste, average consumer won't even use that. Same goes for memory. Sure we can have 256GB but they won't because people can save to the cloud and use data. More money!

 

[mountainbikermark]

that doesn't add up, an in house OS requires developers programmers ui people etc etc... all of this they have to pay for.

using android they realistically only have to use android exactly as it's built, nothing extra. that would save them money.

However they can't just leave well enough alone.

They already have all that. They would, as the rumor is, have to expand it to cover phones on a larger scale to go with their watches, appliances, etc.

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[Jeffrey]

I think Sammy is well entrenched in Tizen, tho a good argument would be leave well enough alone and stick with Android.
With 60M Tizen phones sold, I would think the Devs are in place and in house support exists. The question is, does the additional profit warrant the change and how long will it take?