Samsung to Offer Fewer New Phones in 2015

South Korea-based device manufacturing giant Samsung Electronics says it plans to reduce the number of smartphone models it will offer next year. The move is part of a strategy of cutting costs to offset declining mobile-device profits. The company will cut the number of models by about 25 to 30 percent, according to Robert Yi, head of investor relations, who made the remarks during a presentation in New York. Samsung did not disclose the number of models that would be affected by the reduction.

Samsung’s position in the worldwide device market is being eroded by two forces—one, the new iPhone 6 models from rival Apple, whose larger screens compete directly with those of Samsung’s flagship Galaxy models; and two, a more fundamental challenge from Chinese manufacturers that are producing well-designed low-priced phones that approach or match many of the specifications of high-end devices. In the third quarter of 2014, Samsung saw its profits from mobile devices go down by 74 percent.

Cutting down on its range of devices could plug the hole to some extent, but cost reduction is by no means the whole answer. According to a recent report, the company is transferring hundreds of engineers from its mobile division to an Internet of Things (IoT) initiative. That makes sense on more than one level. Samsung already makes many non-mobile devices, from washing machines to TVs, that ultimately could be connected to mobile networks in the emerging smart-home sector of the IoT. Adding the ability to connect to the internet via mobile networks would be a natural step, and one for which Samsung is eminently well-qualified. Beyond that, though, if the idea of enabling a plethora of devices and appliances—not only in the home but in the workplace and elsewhere—to be controlled by mobile devices truly takes hold, there will be a wealth of opportunities for savvy manufacturers to profit from it. 

The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week or to contact the Tarifica Research department:  http://www.tarifica.com/contactus.aspx

Samsung Partners with Marvel Entertainment

South Korean device manufacturer Samsung Electronics has recently partnered with Marvel Entertainment, which publishes comics and produces movies, among other enterprises. The partnership will begin with a three-month offer of free unlimited access to over 15,000 Marvel Comics through the Marvel Unlimited app on the Galaxy Tab S. In addition, all Samsung users will have exclusive access to sneak peeks of upcoming Marvel films debuting next year, including “Marvel’s Avengers: Age of Ultron.” There will also be Samsung product placement in Marvel entertainment content.

Apple has consistently surpassed Samsung in the tablet market and continues to hold the largest market share at 32.5 percent, compared to Samsung’s 22.3 percent in Q1 2014 (see graph). Samsung’s market share has increased significantly over the past year, but Apple still holds the lead. The partnership with Marvel Entertainment holds out the possibility of driving more business to Samsung’s tablets.

Marvel has a huge worldwide fan base, and Samsung product placement within its films could have a positive effect on device sales. However, the promotional offer of three months of free unlimited access to Marvel Comics on the Marvel Unlimited app may not be as useful a strategy as the company expects, since the application only allows access to most newly released comics six months after they go on sale in stores. Also, the app allows users to access six comics offline, the rest requiring internet access, which makes it inconvenient to use in areas without an internet connection.

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:  http://www.tarifica.com/TarificaAlert.aspx