The South Korean consumer electronics giant changes gears in its smartphone business.
The pressure of low-cost Chinese smartphones got too big for Samsung. The South Korean consumer electronics company changes its smartphone strategy.
Don't Miss: iPhone 8: Everything You Need to Know
"We have been seeking growth in terms of shipments for years. Samsung is preparing for the post-smartphone era and that's why our handset unit has identified profitability as a priority over growth," an executive at Samsung Electronics said according to Korea Times.
Samsung plans to maintain its current marketshare.
"Samsung will keep the company-set share according to markets. We will launch promotional campaigns if we have to. But the company will be unlikely to initiate cash-intensive promotions to clear inventory and increase market share," the unnamed Samsung exec added.
The change in priorities is supposed to boost Samsung's profit margin from 15.8% to 17% in the second quarter of 2016.
The main reasons for the Samsung's shift in strategy is the onslaught of the Chinese budget phones and the lukewarm response of consumers to "fancy features."
As consequence of the new strategy, Samsung will reduce the number of low-end models in its smartphone line-up.
What the new strategy means for the next generation of the Samsung flagship phones Galaxy S8, S8 edge and Note 8 is unclear. If consumers do not want "fancy features" the focus will be on design, display quality and performance.
Don't Miss: Nintendo Switch: Everything You Need To Know
Samsung will unveil the new Galaxy Note 7 at an event in New York on August 2.