Change in product strategy helps Samsung increase its market share

Samsung’s effort to change its product strategy for the year has benefitted the smartphone manufacturer and helped it increase its market share globally and in the Middle East and Africa region, amid a fall in overall global sales, industry experts told TechRadar Middle East.

Nabila Popal, senior research manager at International Data Corporation (IDC), said that Samsung has already posted a very positive first half of 2019 in the Gulf Cooperation Council countries with a healthy 7% growth in unit share and this is likely to continue.

“Low-end ($100-$200) and mid-range ($200-400) smartphones have been consistently growing in popularity in the first half of last year and these two price bands together hold 56.1% unit share in the first half of this year in the GCC countries compared to 42.4% unit share in the first half of last year.”

Moreover, she said that a substantial portion of Samsung’s A-series line (A10, A20 and A30) also falls firmly into the price bands and were very well received by the GCC market.

Note 10: An enterprise device

Shobhit Srivastava, research analyst for mobile devices and ecosystem at Counterpoint Research, said that the Korean manufacturer has completely overhauled its product portfolio in 2019 and was very aggressive with its ‘A’ series products.

“The market also responded well for the ‘A’ series due to the affordable pricing and with rich features in a bid to compete with other Chinese players. Before ‘A’ series was a premium device but the prices have come down this year.

“The flagship ‘S’ series, in which Samsung launched three devices instead of the usual two, covering wider price points also continue to do well.”

With the launch of Note 10 and Note 10 Plus in the Gulf, he said that it is a device that enterprises are going to look into.

“It is an enterprise device and those are the people who buy high-end devices and are impulsive,” he said.

The 6.8-inch Note 10 Plus with 12GB of RAM is priced at AED4,499 (512GB of ROM) and AED3,999 (256GB of ROM). The 6.3-inch Note 10 with 8GB of RAM is priced at AED3,499 (256GB of ROM)

All the devices have up to 1TB microSD card support and will be available at retail stores from the end of this month.

Focus on productivity

Tarek Sabbagh, head of IT and mobile division at Samsung Gulf, said that the two-week preorders for Note 10 have increased more than 27% when compared to Note 9 and it is also AED200 cheaper than Note 9 with more RAM, battery and features.

Out of the total preorders, he said that 81 per cent is for the Note10 Plus device while 19 per cent is for Note 10.

“I am happy with the preorder numbers for Note 10 as most are newcomers to the Note family. These users want the power of a Note device but want a smaller screen to fit in their hands,” he said.

Akash Balachandran, senior research analyst at IDC, said that traditionally Note 10 is a representative of the largest Samsung mobile phone with the most advanced features and the most obvious change this year is the introduction of two devices.

“The strategy provides both Note purists and power users the larger model via the 10 Plus while the Note 10 offers the same feature set in a significantly smaller form factor. This is significant as it offers not only a form of mid-season refresh against the S-series (and devices from other brands) but also takes the Note 10 out of a somewhat niche segment appealing to users with a focus on productivity and toward a more general audience,” he said.

Moreover, he said that the new release sees Samsung offer 5G as an option - a first for the Note series – and a multitude of feature updates and improvements which will make the Note 10 and 10 Plus very compelling offerings in the premium segment.

5G phones to rejuvenate market next year

Srivastava said that 5G devices will rejuvenate the global smartphone market next year compared to a fall this year as consumers are holding on to their devices without replacing.

But Samsung is not launching the 5G Note 10 in the Gulf for the time being as the market is not yet ready.

“We are working with all the related parties to launch a 5G Note in the region in a bid to have a new consumer experience. We are ready with devices such as S10 and Note 10 but when the market is right, we will launch it. As of now, we don’t have any clarity on the readiness,” he said.

Quoting research firm GfK’s report, Sabbagh said that Samsung had a market share of 38.1% in the first six months of the year and in July, the market share rose further to 41.8% due to a growth in $600 and above priced smartphones.

“In the above $600 price category, Samsung held a 37.3% market share in July compared to 35.7% a year ago,” he said.

According to Counterpoint Research, Samsung did shipments of 72m in the first quarter and 76.7m in the second quarter of this year globally. Last year, it did 291.8m units.

“Samsung will be able to increase its market share globally and give a competition to other Chinese brands, especially in Europe. Huawei’s loss in Europe will be a gain not only for Samsung but also for other Chinese players like Oppo, Vivo and Xiaomi,” Srivastava said.

Replacement cycle getting longer

According to research firm Gartner, the global smartphone sales to end-users are expected to fall by 2.5% to 1.5b units this year while in the Middle East and North Africa region, the smartphone market is expected to grow to 76.34m in 2019 from 75.61m in 2018 and to 77.86m in 2020, according to Gartner.

Srivastava said that the driving factor in the smartphone industry was not there in the last couple of years and added that the innovation that came in was the full-screen display and more cameras on a phone.

“These are not the features you want in a phone to be replaced with. With 5G coming in, it is going to change the overall experience on a phone,” he said.

Moreover, he said that countries like China and the US, which have the highest penetration of smartphones, are already using high-end smartphones and are holding on to it for a longer time as ASPs are going up as well as the quality of the device.

“For iPhones, the replacement period is 36 months and 30 months for Android devices,” he said.

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