10/12/16

Why a sub-brand is fast becoming necessary for Samsung to maintain dominance in the global smartphone market

Samsung has a problem. It continues to break new ground and find market share for high-end products but at the same time it’s conceding position to Chinese OEMs and local rivals in many lucrative emerging markets. Late last year it was reported that Samsung had narrowly managed to retain its top spot as the top smartphone manufacturer in the world even tough its annual smartphone sales were expected to post a year-over-year drop due to increased competition in the low-end and mid-range segments of the market.

Even though Samsung accounted for 23.2 percent of all smartphone sales worldwide in the first quarter of this year, its first-quarter sales were actually down 1.1 percent compared to 24.1 percent from last year. Chinese OEMs were the only companies that saw their market share expand in Q1 this year primarily because they are pushing out devices with robust specifications at very attractive price points.

It’s not like Samsung hasn’t been trying to take the fight to them. The company has released a plethora of low-end and mid-range devices geared towards markets like China and India where it’s conceding most of its ground to local rivals and yet it’s unable to plug the hole. Despite the fact that it’s the biggest smartphone manufacturer in the world with infinitely deeper pockets than the likes of Xiaomi, LeEco, Micromax etc it’s just not able to offer the kind of value that smartphones from the local players do and that’s hurting the company’s bottom line, forcing it to rely more upon the performance of its high-end handsets in a market that’s stagnating with each passing quarter.

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