The tremendous growth and successes of the smartphones may not be as glittery for the tech giant in coming years.
Over the last four years, Samsung Electronics has been able to enjoy a massive amount of success and growth in its mobile market share, particularly due to its Galaxy smartphones.
It has been a primary rival for Apple in the smartphone marketplace and has made billions in that spot.
That said, it is becoming increasingly clear that holding onto its position in the mobile market may not be quite as glorious over the next few years as it has been in the previous handful. The company has been watching the situation undergo some considerable changes and has been forced to reduce its prices and swallow reduced margins. This has been necessary in order to keep away the threat of the competition from new rivals in this space, such as Ciaomi and Huawei Technologies from China.
Those companies have been implementing some very effective strategies and snatching up market share.
Among the issues that Samsung has come to face is that the operating system that it uses – Android – is the same one powering the mobile devices of most of its competition. However, when it comes to those rivals, many of them are selling their devices for notably lower, because they are producing smartphones that are simply less capable than the ones being designed by Samsung.
According to Statechery.com analyst, Ben Thompson, in Taipei, “The writing has long been on the wall for any premium Android maker: as soon as low end hardware became ‘good enough,’ there would be no reason to buy a premium brand.”
During the quarter that ran from April through the end of June, the mobile division’s margins at Samsung dropped from having been 15.5 percent last year during the same quarter, to 10.6 percent this year. This, despite the fact that the company launched its Galaxy S6 range, which received critical acclaim. While the mobile market share held by Samsung does still keep it in the top spot for smartphone makers by size, Apple appears to be the one that is bringing in the greatest rewards, regardless.