Samsung profit Kuangxiang is the successful reverse attack of domestic mobile phone

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Samsung, the only handset maker to rival Apple's iphone, has recently been lamented by some netizens as "the past" because of the threat of rapid rise of emerging forces represented by mainland Chinese handset makers. And the evidence they think will lead to this is the sharp decline in operating profits today. In the face of the sudden crisis, Samsung has barely found a better remedy, or even missed the great opportunity to start the 4G wave. In the brutal smartphone market, a step wrong can be a step-by-step mistake. Will Samsung not be catching up? Or the same as the foreign brand color TV was expelled from the mainland market.

Profit Kuangxiang Samsung stamina shortfall

Rome cold Day, Samsung operating profit Kuangxiang has long been a hint. As early as April, Samsung announced the first quarter of 2014 results in the guidance showed that the first quarter operating profit of 8.4 trillion won (about 8 billion U.S. dollars), down 4.3%! At the time, Samsung was given a slowdown in demand for high-end smartphones, and was confident that the Galaxy S5 's listing would restore its decline. But three months later, Samsung's two quarterly results showed sales of 52 trillion won ($ 51.5 billion), down about 10% per cent, and operating profit of 7.2 trillion won ($ 7.1 billion), down 24.5% from a year ago!

Samsung's double declines in sales and operating profits are directly linked to the decline of the mobile phone business, knowing that last year the cell phone division contributed 68% of its operating profits to Samsung. But this year, the department only contributed 59% of its operating profit to Samsung, down nearly 10%, with an instant to make Samsung from the high-handsome into the magic of the cock silk. In addition, Samsung's share price peaked last January, but fell nearly 12% per cent in April this year. It seems that investors ' fears have finally turned into reality, and Samsung's downward trend is like a slide to stop.

Of course, Samsung is still trying to be brave in order to stabilize its morale, saying: "With the launch of new smartphone products, the company is cautiously expected to be more optimistic in the third quarter." "This refers naturally to the note 4 that will be released in September. But don't forget, then Apple's big screen iphone 6 will also be launched, is definitely the main rival of note 4. Samsung's third-quarter operating profit is still unlikely to get much bigger, and it is likely to still fall. Coupled with the huge marketing costs, Samsung chairman of the hospital and other factors, Samsung in the next time will encounter many difficulties.

High price, performance ordinary Samsung difficult PK domestic

The trend towards a slowdown in operating profits is the decline in Samsung's share of the smartphone market. According to IDC data, Samsung's global smartphone market share in the first quarter of this year fell to 30.2% from 31.9% in the same period last year. It is worth noting that this is the first time since the fourth quarter of 2009, the Samsung smartphone market share has declined. Although it appears to have fallen by less than two percentage points, Samsung's decline has reached dangerous levels in one of the most important markets in mainland China.

In 2013, Samsung in the domestic market share of about 22%, but in May this year, this figure dropped to about 16.5%, almost fell 6%! At the same time, Lenovo, Xiaomi accounted for more than 10% of the market share, coupled with Huawei and other domestic manufacturers of the step-by-step approach, Samsung a single show situation has ceased to exist.

This is mainly because in the domestic smart phone market, accompanied by fierce competition, smart phones in the continuous popularization of the same time, not only the price has been the bottom, even performance, functions and so can meet the daily use of users. The gap between the high and low end of the mobile phone is getting smaller, especially with the Samsung flag ship mobile phone hardware configuration is not small difference of domestic mobile phones, its price is only one-second of the former, or even one-third, greatly impacted the Samsung flag ship mobile phone sales in the country.

And Samsung's low-end mobile phones, the price is more expensive than domestic thousand-yuan machine, and in the hardware configuration and so far lag behind these "thousand-dollar God machine." To know, in the high-end models increasingly saturated now, the low-end model is the handset manufacturers of the life of this. At the end of this year's MWC conference, Reuters said: "The handset industry is currently targeting the growth of low-end smart machines below $100, as the high-end smartphone market is saturated and entry-level smartphones represent the industry's biggest hope for growth." "Samsung's neglect of the low-end mobile phone marketing in the end, let themselves into the quagmire can not escape."

Domestic mobile phone manufacturers will be the internet marketing to play well, gather a large number of "rice", "pollen" and other fans, Samsung is still persistent in the television media and other media to invest huge sums of money to promote their flagship mobile phone, do not pick up the atmosphere, nature is stressed "price" of domestic users abandoned. And in essence, Samsung phones still use Android, and workmanship, materials and not unique, and mobile phone is not much different. How do you add value to a Samsung-only sign?

Apple has its own set of consumer groups because it has built a complete ecosystem for the iphone. By contrast, Samsung, the world's largest market share, has maintained its position by marketing and other means, which has left many domestic handset makers with the challenge and hostility of Samsung. Huawei Yu Chengdong in May this year when P7 said: "The market is the second largest manufacturers (Apple) because there is a special ecological chain, I am not good to say, but the number one (Samsung), and there is no Huawei does not have a competitive advantage."

In addition, Samsung mobile phone quality problems are also indisputable fact, font door, motherboard door and so on by the media reports. And its after-sales attitude, high maintenance costs are often complained to users. I have a friend, buy Samsung Galaxy Note 3 China Mobile 4G version only three days, in the absence of drop, impact, etc., the motherboard is completely damaged, and eventually cost nearly 2000 yuan to replace the motherboard.

In the 4G era behind Samsung's bleak future

With the opening of the domestic 4G era curtain, a number of domestic manufacturers began to exert force at the 4G Terminal, of which cool and other manufacturers have been far ahead in the market. In May this year, cool Pie ranked first in the domestic 4G handset market with a 23.1% share, with Samsung and Apple second and third. Samsung, however, is unresponsive, only the introduction of the expensive flagship 4G mobile phone, can not meet the needs of the market. In order to seize the heights in the 4G era, domestic handset manufacturers also come up with the customary "price killer", launched a variety of thousand mobile phones, which makes Samsung unable to parry.

While Samsung executives believe that 4G will be the main driver of Samsung's growth, it is clearly not exerting its strength in mainland China. Samsung will be in a very awkward position in the 4G era once it is dominated by domestic handset makers. If the low-end model if the support of 4G, the price will also be further improved, simply can not compete with domestic 4G mobile phones.

One step wrong, step by step wrong. The potential of 4G is huge, and if Samsung does not have a foothold at the start of the 4G wave, it will be very difficult to make a comeback. This fall in the 4G, is bound to cause a chain reaction, which will affect the overall performance of Samsung in China.

Low-down and rich product line

For now, Samsung wants to stabilize the situation, to stop the downward trend, it must be to seize market share as the goal, sacrificing short-term profits, in exchange for a long time to occupy the first place. This is naturally to Samsung low-figure, for its high-school low-smart phone models, reasonable price reduction, a variety of strategic competition. In turn, with domestic handset manufacturers to contend with, finally by virtue of the Chinese mainland market warmer, so that it firmly in the global smart phone market leading position, better with Apple big fight exchanges.

In addition, while most of Samsung's operating profit comes from the mobile phone business, it can not ignore other new areas of market development, such as wearable devices, smart homes and so on. Samsung is clearly ready for a full-scale war, at this year's CES conference, a smart home platform, a new generation of smart watches powered by the Tizen system and smart watches based on Android Wear puzzles, and the upcoming launch of VR gear Live ... The rich product line is enough to engage more with smartphones, creating a complete ecosystem that leads the consumer trend.

Written in the last

The importance of China's market is not much to say for Samsung. But with Apple's emphasis on a different, Samsung has been high-minded attitude to the Chinese mainland users. Even with a huge amount of money into marketing, you can return the idea of generous returns. But domestic handset makers have given Samsung a head-on, declining operating profits that have been taken by surprise. For now, Samsung has not been able to adjust its operations in mainland China in time. But when it is too soon, Samsung's "scurrying" is almost predictable in the future, once the Chinese handset makers have been able to unleash their full potential. (New discoveries of science and Technology, Constantine/Wen)

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