Saturday, 1 November 2014

Five ways Samsung can overhaul its ailing smartphone business

It's time for a little change in Samsung's mobile business.
The South Korean company on Wednesday reported its lowest operating profits since the second quarter of 2011 and said third-quarter income in its mobile business tumbled 74 percent from the previous year. It also warned that conditions would remain tough in smartphones as competition heats up toward the end of the year.
At the same time, market researchers International Data Corp. and Strategy Analytics said Samsung's global smartphone market share dropped to less than 24 percent of shipments in the third quarter from nearly a third of all units a year earlier. It's being hurt by competition with Apple's new iPhone 6 and 6 Plus smartphones at the high end and cheap devices from Chinese and Indian vendors at the low end.
In an effort to halt the freefall, Samsung said it plans to "fundamentally reform" its product lineup and "significantly enhance product competitiveness for each price tier." It plans to use new materials and technologies, such as metal frames and flexible displays, to set its devices apart from rivals. And Samsung will work on differentiated designs and software and use the same components in its mid- and low-end phones to bring down its costs.
That doesn't mean Samsung will be scrapping devices already in its pipeline. Instead, it will think more strategically about what it's developing in the future to make sure it has differentiated products for all price points.
"Although our mobile communications business is undergoing a challenging period, we will use this situation as an opportunity to thoroughly improve our business fundamentals and further strengthen our competitive advantages in order to continue to lead the market and sustain growth," Hyun-Joon Kim, senior vice president of Samsung's mobile communications business, said Wednesday in the company's earnings call with analysts.
Its planned actions are headed in the right direction, market watchers say, but they may not be enough. Here are some other steps Samsung could take to turn things around in mobile: