Samsung Slimming Down

 

Samsung Electronics has established its mobile strategy for 2015.

The Korean tech giant is planning to reduce the number of smartphone models as much as 30 percent, and to strengthen the lineup of mid to low-range phones. It is also going to discontinue or curtail any uncompetitive service of Samsung Hub, which has started to lead the content platform market.

The company is aiming to increase price competitiveness by downsizing the mobile business so that it can properly respond to the stagnant market. Many in the industry are waiting to see whether or not Samsung's strategy will actually pay off.

“We were not able to hold a dominant position in the smartphone market this year due to the growing importance of prices,” said Lee Myung-jin, senior vice president and head of investor relations at Samsung. Lee continued by saying, “Our company is going to focus on saving resources and decreasing the number of models in 2015. We plan to release up to 30 percent fewer smartphone models next year.” He added, “It will serve as an opportunity to increase price competitiveness through mass production.” These remarks were made at the Samsung Investor Forum 2014 held in New York on Nov. 17 (local time).

Out of all the handset manufacturers around the world, Samsung produces the largest number of smartphone models each year. The company reportedly has released 50 models, from low-priced to premium.

However, it now intends to improve the high-cost structure in research and development, manufacturing, marketing, and distribution next year by reducing the number of handset models.

Samsung Hub will be reorganized by closing some uncompetitive services, since the tech company lags behind major players in mobile content such as Google, Apple, and Amazon. Samsung also has difficulty obtaining sufficient content. On top of that, the Korean company directly runs the content business, which costs a lot of money.

Therefore, Samsung is likely to end some uncompetitive parts of the content business and thus change the direction of its content service by constructing an ecosystem through cost-cutting measures and strengthened business partnerships.

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