Why Samsung so desperate?

BI Chinese station reported on July 9

In the past just eight months time, Samsung actually launched five different models of smart watches.

The first smart watch Galaxy Gear listed in October last year, poor market feedback, sales were mediocre. (Samsung did not release Galaxy Gear sales, but industry analysts' expectations are not optimistic.)

In the months that followed, Samsung unveiled four new products: Gear 2, Gear 2 Neo, Gear Fit and Gear Live. Few impressed everyone.

This Monday night, we finally know why Samsung desperately develop smart watches. Samsung expects its operating profit to fall 24% YoY in the second quarter ended June 30. This is also the third consecutive quarter, Samsung's operating profit decline. Samsung attributed the decline in profits to competition from other smartphone makers.

At present, the products of Chinese handset manufacturers such as Lenovo, OnePlus and Xiaomi are similar in specification to Samsung mobile phones, but the price is at least half lower. For example, the Samsung Galaxy S5 costs about $ 600, while the OnePlus One has an equivalent configuration of just $ 300. In the meantime, millet has grown even faster with 15 million smartphones sold in the previous quarter.

Since these phones all operate Android system, the difference in user experience is not obvious. Therefore, users will inevitably have to consider such a question: There are 300 dollars of products available, why buy 600 dollars?

At present, Samsung's smart phone business decline seems to be concentrated in the low-end products. The price of Samsung's low-end handsets is similar to that of Lenovo and Xiaomi, but its configuration is far behind that of its competitors. As a result, Samsung's market share and profit growth may continue to decline in developing country markets.

This is why Samsung is desperately developing new categories of products. In addition to smart watches, Samsung introduced a new line of high-end headphones this spring. In addition, Samsung may also launch wearable products like Google Glass. (Tan Ran)