Samsung’s profits are known to fall down by double digits creating the worst decline in profits the company has seen recently. While the Korean firm tasted sweet success by virtue of its smartphone sales last year resulting in a growth of 39.2% last year it has turned bitter as a far lower 19.3% is expected this time around.
Samsung has been concentrating mainly on its high-end smartphones recently. With Samsung sending its Galaxy S5 to distributors in large numbers the company’s intentions were very clear. Samsung had also come up with ideas to enhance security on its smartphones running Android OS. The company showed clear interest in expanding its market among enterprises.
Samsung’s efforts to expand in the high-end smartphone market are being hindered by the popularity of Apple’s iPhone series. With each version of iPhones offering hardware improvements along with better design, security and UI they are preferred by many prospective high-end smartphone buyers. Apple’s iPhones pose a serious threat to Samsung’s expansionist dreams.
As far as the mid-range and lower-end phones are considered the market is experiencing drastic decentralization. There is a bunch of Chinese manufacturers from popular ones like Lenovo to new entries offering cheaper phones with decent specs. Adding to them are local manufacturers in countries where Samsung enjoyed favorable response coming up with similar affordable phones with decent specs. Some have even gone ahead to come up with innovations.
Samsung’s experience can be an eye opener for other brands too. While brands are coming up with phones with better specs they have to be aware of affordability of their models too. If there are customers willing to buy a costly phone of high standard in some parts of the world there are others who may happily buy a cheaper alternative that compromises on specs. Companies have to take these buyers into consideration too before taking strategically decisions.
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