Samsung Electronics’ president of the mobile communications business Koh Dong-jin said on Aug. 7 that the tech giant plans to maintain a minimum annual smartphone shipment of 300 million.
Koh made the pledge following the launch event for the Galaxy Note 10 in New York City. “Market share is like the lifeline for a business, while profit is the character. In all cases, the lifeline comes first,” he said.
He explained that in the first half of the year, Samsung has prioritized market share, but in the second half, it would focus on making profit.
Industry watchers say the CEO appeared to be mindful of China’s Huawei Technologies, which is close on Samsung’s heels.
According to market research firm IDC, Samsung Electronics shipped 317 million smartphones in 2017. But in 2018, it shipped a smaller volume of 292 million.
In Samsung’s place, Huawei has been aiming for the top.
Richard Yoo, the CEO of Huawei’s consumer product division, said that it would become No.1 in the world by next year at the latest when he met with reporters in Beijing early this month.
The trade dispute the US and China did buy Samsung some time, as Huawei is finding it more difficult to secure suppliers and partners after being placed on the Entity List, but it could be a matter of time before Samsung loses to its Chinese rival, according to market watchers.
To uphold its 300 million shipment plan, Samsung plans to expand the market share of budget phones such as the Galaxy A, while clawing back more ground in the high-end market counting on more consumers to ride the 5G wave.
For the Galaxy Note 10, Koh declined to unveil a sales target, but the markets are expecting around 9.5 million, the same as the previous model. The Galaxy Note 5G will be launched in more areas than the Galaxy S10. In South Korea, Samsung sold 1.7 million Galaxy S10 5G phones, while globally, it sold 2.2 million handsets.
The upcoming September launch of the Galaxy Fold won’t affect the bottom line in terms of the target shipment, since in April, the tech giant had anticipated sales of around 1 million handsets, which is around 0.3% of the projected 300 million sales.
Koh added that as the launch countries have now been reduced to around 20, it would be unlikely to even hit the 1 million mark.
In the budget phone market, the executive indicated that Samsung would expand ODM within the extent of not affecting the corporate brand. This could be bad news for some of the suppliers, as the ODM companies would dominate the entire process, right up to securing the components.
Touching on the recent fraying relations between South Korea and Japan, Koh said that they could put a damper on the smartphone business.
“Since we have secured up to 4 months’ worth of components, there won’t be any impact on the Galaxy Note 10, or the Galaxy Fold, but we still can’t know what might happen over the next few months,” he said.
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