Aiming High
Samsung Electronics is zeroing on in hitting annual sales of 500 million cell phones this year, with its worldwide debut of the Galaxy S5 on April 11. LG Electronics is also planning to hike their world market share to the 5 percent range with the introduction of their strategic phone, the G3, in the latter half of the year.
In particular, both handset giants will take it up a notch in the smartphone competition, with Samsung revealing its next model, the Galaxy Note 4, in September, and LG unveiling their strategic phone G3 in August at the earliest.
According to the industry on March 30, both companies recently held cell phone strategic meetings and established goals to exceed 500 million sets in sales and to reach 5 percent in market share, respectively.
It is a common belief among a lot of people that Samsung Electronics is on the verge of a crisis, now that the global cell phone market is beginning to be saturated.
Therefore, this year’s direction for the cell phone business, to solidify its global top spot, Samsung needs to reinforce its market dominating competitiveness, to widen the gap with the runner-up.
With this in mind, the global giant set a management goal to hike up its market share to 30 percent by exceeding the sales of 500 million, to be the first in the industry. Particularly, it is set to sell more than 100 million smartphones, which account for 70 percent of all cell phones in each quarter, so that the smartphone’s global market share will be 40 percent range.
As for the priority strategy for expanding the market share, a big gun was brought out; price competitiveness.
Its plan is to secure its lead by expanding product lines by increasing popular models that will keep high resolution specifications while giving up on pursuing premium price policies. On top of this, it will also beef up its global production belts by increasing productions in overseas local facilities such as Vietnam.
LG, in contrast, plans to exert itself to exceed 100 million sets in sales this year. LG’s plan is to solidify its number three spot by exceeding the market share of 5 percent. For this goal, it is eyeing at expanding R&D investment and upgrading quality. Even though its cell phone division is seeing red, it will invest more than 2.5 trillion won (US$2.35 billion) this year.
The company has also set out to enlarge its production by increasing its overseas production to more than 65 percent of the total, which will help to lower the production costs and pro-actively adapt to shifting global markets.
Another plan up its sleeve is that the company will set up a system that allows timely production catering to the global market situation by producing popular, reasonably-priced, but high-quality models, so that it can fend off Chinese companies that are closely behind with their low-end models.
Based on these tactics, LG Electronics is, more than ever, determined to solidify its “two track” strategy of securing profitability and growth, by reinforcing its “G Series” lineup this year.