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Samsung Electronics Smartphone Suffers Double Dips in Smartphone, Tablet, Smart Watch
Triple Slump
Samsung Electronics Smartphone Suffers Double Dips in Smartphone, Tablet, Smart Watch
  • By Michael Herh
  • February 13, 2017, 02:15
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Samsung Electronics recorded double dips where the global market share and sales volume of its smartphones, tablets and smart last year.
Samsung Electronics recorded double dips where the global market share and sales volume of its smartphones, tablets and smart last year.

 

Last year, Samsung Electronics recorded double dips where the global market share and sales volume of its smartphones, tablets and smart watches which are flagship products of its smart devices all dropped. This is mainly attributable to an impact of Chinese smart device makers on the Chinese market and the discontinuation of Samsung’s Galaxy Note 7 sales. However, experts point out that it is inevitable to re-examine Samsung's strategy, which is centering on high-priced premium products, in the global smart device market which is saturated and is being led by mid- to low-priced products.

According to market researcher Strategy Analytics (SA) on February 12, Samsung's global smart watch market share shrank to 9.8% in the fourth quarter of last from 16.0% in the same quarter of 2015. Its smart watch shipments were 800,000 units, down by 500,000 units from 1.3 million units in the same period of 2015.

Samsung Electronics launched the Gears S3, the main product of its smart watch group in the fourth quarter of last year, but its market share declined despite the launch of the new product. In particular, Samsung’s smartphone sales slid although global smart watch shipments during this period were 8.2 million units, up by 100,000 units from 8.1 million units in the same period of a year ago.

"Samsung shipped 800,000 smart watches in the fourth quarter of last year, which is down 38% from a year before," said Stephen Walter, a researcher at SA. "Samsung launched the Gear S3, a flagship smart watch but should launch smart watches with interesting features or cheaper ones."

According to market researcher IDC, Samsung Electronics accounted for 15.2% of the global tablet market last year, down 0.9% from 16.1% a year earlier. Its tablet shipments were also 26.6 million units, down 20.5% from 33.4 million units in the previous year. In the fourth quarter alone, even though its market share rose from 13.6% to 15.1%, its shipments fell from 9 million units to 8 million units.

Instead, latecomers such as Amazon, Lenovo, and Huawei are in high spirits. In the global tablet market, in the fourth quarter, these three companies, which occupy third to fifth places, increased shipments by 21%, 16% and 49%, respectively, year on year. These companies, which mainly focus on emerging markets, are steadily growing by launching inexpensive models that are more affordable compared to their performances according to market conditions. As the tablet market does not grow as expected, Samsung's strategy to focus on premium products reach its limitations.

Samsung is struggling in the smartphone market too. Samsung, which suffered big damage from Galaxy Note 7 discontinuance last year, posted a market share of 17.7 percent in the fourth quarter of last year, standing behind Apple by 0.1 percentage points. Samsung Electronics' annual market share in 2016 was the lowest since 2011. Samsung is weak particularly in the Chinese smartphone market. China accounts for 30% of the global smartphone market and Samsung fell from second to fifth place in market share in China in one year.

Samsung Electronics plans to rebound in China by launching a new smartphone and tablet in the first half of this year. First of all, it is expected to that Samsung will take the wrap off the Galaxy Tab S3, a strategic tablet model, at the Mobile World Congress (MWC) 2017 held in Barcelona, ​​Spain at the end of February and launch the model this March.

The Galaxy Tab S3 is expected to sport a 24.64 cm (9.7 inches) QXGA (2048 × 1536) super AMOLED display, a Qualcomm Snapdragon 820 processor and a rear 1,300-megapixel camera and a front 500-megapixel camera and 4GB of RAM. The new product will be powered by the Android Nougat Operating System. The new tablet will retail at about 700,000 plus won a unit.

In the smartphone sector, it is expected that Samsung will release the Galaxy S8 with a voice-based AI personal assistant function next month. As for the Galaxy 8, Samsung reportedly removed the home button on the front and sent the fingerprint sensor to the back.

In addition, it is expected that its bezel will be minimized and the screen size will expand compared to its whole size. It is also said that the Galaxy S8 will be loaded with Snapdragon 835, the latest Qualcomm processor.

However, experts point out that smart device manufacturers cannot survive and even win fierce competition in the global market with premium products alone. Therefore, Samsung is advised to review its overall strategies such as mid- to low-priced products and specialized regional marketing strategies.