Chinese market challenges Samsung "Prince" Lee to China Fire Fighting

Lee, standing behind his father, can provoke the burden of Samsung Electronics? The North Korean daily reported that Samsung Electronics Vice President Lee will travel to Beijing this week to convene an emergency meeting with Samsung's senior Chinese executives to discuss measures to clamp down on domestic smartphone makers to save Samsung's share of the Chinese market. But insiders to Tencent technology revealed that the news of Korean media slightly lag, Lee last week has come to Beijing to listen to China management personnel report. However, the staff member is not clear whether the Lee is a regular trip to China or emergency consultations. There is no clear indication recently. Since Samsung Electronics chairman Lee Kun-hee fell ill this May, the actual operation of Samsung has been the prince's Samsung Electronics deputy chairman, Vice President Lee responsible. Why did he come this time? According to the Chosun Ilbo, there may be a challenge in the Chinese market for Samsung smartphones. China's smartphone makers have a 65% per cent share of the Chinese market in the second quarter of this year, with Samsung only 12%, according to data recently released by Canalys, the US market research agency. The market performance in China is not commensurate with the volume of Samsung handsets in the world. Today, Samsung Electronics is still the main revenue from the smart phone this gold mine: the best time, Samsung mobile phone accounted for the overall profit of Samsung 70%, which means that the Samsung mobile phone business as soon as the decline will drag on the overall performance of Samsung Electronics. It is not yet known what Lee's visit to China specifically, but it is certain that the ability to stimulate Samsung's mobile phone business will be the biggest test Lee face. But it is also the best chance for Lee to prove he can control Samsung like his father. Samsung has a huge challenge. Last July, Tencent Technology published the "Samsung mobile phone growth myth" in the article on the future trend of Samsung mobile phones have made a rough forecast: Multiple competitors of the siege, strong marketing of profits under the maintenance, and the possibility of new innovation will end the myth of Samsung Electronics big growth. A year later, Samsung's use of an unprecedented quarterly low profit in nearly two years confirms Tencent's technology forecasts. July 31, Samsung Electronics released the second quarter earnings, Samsung Electronics this quarter revenue 52.35 trillion won (about 51 billion U.S. dollars), the year-on-year decline of 8.9%, the company net profit of 7.19 trillion won (about 6.99 billion U.S. dollars), less than the same period last year won the net profit of 9.53 trillion won. Samsung mobile sector revenue is only 28.45 trillion won, down 20% year-on-year, net profit of 4.42 trillion won, down 30% year-on-year decline 31%. Looking back at Samsung Electronics's nearly three-year earnings, the second-quarter earnings performance was a landmark watershed event. The brilliance of the Galaxy S2 and Galaxy S 3 mobile phones allowed Samsung to kick off Nokia as the world's first mobile phone in late 2012. But Samsung began to show signs of slowing growth in 2013. July 29--Global smartphone shipments reached 2.95 in the second quarter of 2014, according to a report published by IDC, a market research firm.300 million, an increase of 23.1% over the same period last year. But Samsung Electronics shipments have fallen by 3.9% in reverse, and have been robbed of some market share by Chinese manufacturers such as Huawei and Lenovo. Industry insiders revealed that Samsung's performance decline for three reasons: one is the squeeze of competitors, high-end Apple, China's low-end mobile phone manufacturers, Samsung mobile phones to carry out a differentiated user group market encirclement, precision and sustained impact; the second is that Samsung relies on expensive marketing activities in exchange for shipments of the model is outdated; third, in the Chinese market , it has been worth the mobile phone manufacturers rely on operator channels in the background of the increase in the operation of mobile phone subsidies and channel commissions, in order to underwrite the form of mobile phone operators of Samsung mobile phones have been hit. The inevitable change in the Tencent technology to a number of mobile phone industry in the interview, most of these people on Samsung's performance decline is not surprised, even think it is inevitable one. One reason is that in the last two years, Samsung has been on the phone in the new iteration almost in situ, at the same time, although the Chinese handset manufacturers do not do pure high-end products brand premium and ability, but in the last two years in the low-end products honed, narrowing the gap with Samsung mobile phones, the level of technology and production technology is not a big barrier. One handset maker jokes that the current smartphone is basically indistinguishable, with only a different name. In the Android smartphone camp, almost the same chip, camera and other configuration has narrowed the gap between the home, the same phone design is only sold to different handset manufacturers assembled. Sophisticated smartphone technology pushes the market into a new round of adjustment. Although Chinese manufacturers are currently in the low-end market, the inability to enter the high-end camps such as Apple, Samsung, mobile phone production design seems to be a reason to be ridiculed, but Chinese manufacturers with low-cost and high-performance more grounded gas strategy to drive foreign manufacturers are gradually expanding their territory. Zhang, the chief executive, said the adjustment period was behaving like a eight or nine-year-old mobile phone market shuffle. At that time, foreign manufacturers are still mobile phone leader, but the Wave guide, Changhong, Tcl and other mobile phones in the attitude of the fighter driven Ericsson, NEC, such as a large wave of market competitors. Yu, the BG CEO of Huawei's consumer business, said in May this year: "The second-most market-maker (Apple) has a special eco-chain and I'm not saying it, but the number one (Samsung) has no competitive advantage." 4G mobile phone is also a time window. In this emerging sector, Lenovo, cool, Huawei and Lenovo have all been laid out, and their killer is still the strategy of the 3G era: low prices and high performance. Samsung is also targeting 4G layouts, mainly high-end handsets, but a bit weak for a large wave of more pervasive low-end handsets. Even the chip maker Qualcomm, which is encountering antitrust investigations, has become a boon to Chinese manufacturers, who collectively opted for silence and dark cheer during the government investigation. Qualcomm can not abandon the Chinese market, but to increase support, and through the government's actions to promote Qualcomm to reduce the cost of patent licensing, Chinese mobile phone manufacturers of mobile phone production costs naturallyReduce。 Crisis consciousness or Samsung reverse attack Magic weapon Samsung in the history of many times encounter crisis, but with the risk of Samsung's awareness and improve the upstream and downstream industry chain, warmer will soon. In fact, Samsung has already begun a low-key adjustment. In June this year, Samsung in personnel arrangements to make adjustments, the original Samsung Greater China Mobile Communications Division President Li Jin was transferred to South Korea, as the president of China's export department. Tong, executive vice president of Samsung Electronics Greater China, became president of the Mobile Communications division. Another piece of information from inside China suggests that Samsung is considering a promotional policy that phones and smart watches, headphones or direct gift calls. That could be seen as a marketing move that Samsung intends to try after losing huge subsidies from its operators. Zhang that Samsung in the minds of consumers have solidified image, the same plastic shell for many years has affected the high-end image of Samsung, laurels era needs to end, try to change is wise. A top domestic mobile phone said that throughout the history of Samsung, the challenge has never been interrupted, but once the crux of the problem, Samsung can quickly reverse the situation, Lee how to deal with the current crisis, is the focus of the outside world.