Competition in China, India
Global smartphone makers launched a new offensive to dominate China and India, which are strategically important for Samsung. Apple, Nokia, Hewlett-Packard, and Intel are all pushing into the two markets.
As a result, Samsung’s plan to expand distribution of its entry-level smartphones in those gigantic markets as an alternative to stagnant sales of premium phones is going to be difficult.
According to industry sources and overseas media outlets on January 19, the worlds’ largest mobile carrier, China Mobile, began to sell Apple’s iPhone 5S and 5C on January 17, in line with the commercialization of LTE.
So far, Apple has provided iPhones only to China Unicom and China Telecom, China’s second and third largest mobile carriers. Due to the limit of their distribution networks, Apple was pushed out of the market by Samsung and Chinese firms, and ended up making up merely 4% of the market. Therefore, its ranking went down to seventh place. However, the US handset maker is expected to achieve its highest-ever quarterly sales figure in China, since it supplied 1.4 million units of the iPhone 5S to China Mobile in the fourth quarter of last year, as a first shipment.
Apple is not alone in the effort. Other global smartphone makers are also aiming to occupy China’s or India’s low-end smartphone markets.
Faced with business difficulties due to a slowdown in the global PC market, HP decided to target the Indian market first with the launch of six and seven inch smartphones. It is seeking to settle in India’s low-end smartphone market by utilizing its distribution networks, which account for more than 30% of the total.
Intel, which dominates the PC microprocessor market, also chose the Indian smartphone market as a new growth engine. The company is said to be making contact with India’s manufacturers such as Micromax, Carbon, and Larva to develop smartphones.
Nokia, which market share is in shambles, burned its boats by moving forward with a low-priced policy in the Chinese market. It gambled on the cheaper release of its Lumia 525 in December 2013. The launch price was US$160 per unit, nearly US$40 cheaper than in neighboring countries.