Samsung Switches Smartphone Strategy From Growth To Profitability

Posted: Jun 21 2016, 5:49am CDT | by , in News | Latest Business News

 

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Samsung Switches Smartphone Strategy from Growth to Profitability
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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.

"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.

Samsung will unveil the new Galaxy Note 7 at an event in New York on August 2.

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The Author

<a href="/latest_stories/all/all/2" rel="author">Luigi Lugmayr</a>
Luigi Lugmayr () is the founding chief Editor of I4U News and brings over 15 years experience in the technology field to the ever evolving and exciting world of gadgets. He started I4U News back in 2000 and evolved it into vibrant technology magazine.
Luigi can be contacted directly at ml@i4u.com.

 

 

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