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Samsung feels the pressure in China, plans to release new line of budget-friendly smartphones

As Samsung continues to lose more marketshare, they may soon be focusing on budget-friendly handsets for emerging markets.
October 27, 2014

While it isn’t particularly new news, Samsung has been feeling the pressure in China, and around the globe, as of late. As the mobile phone division in the Chinese market makes up roughly 9% of the company’s total revenue, the tech giant is finally doing something about losing so much marketshare. The company plans to release a budget-friendly line of smartphones with hopes of taking back the top spot in China, among other markets.

Samsung is especially noticing declining marketshare in China, India, Thailand, and the Philippines. These are markets where companies like Xiaomi, Lenovo, and Huawei work exceptionally well, due to their low-cost upfront pricing.  So, what is this “pressure” Samsung is feeling? On Thursday, Samsung is expected to report a 60% loss in profits since September of last year, mainly due to “increased competition” in China. On top of this staggering statistic, analysts are reporting that the mobile phone division will fall by 8.1% in the third quarter, down from 19.8% in Q1.

As a counter measure of sorts, Samsung is slashing the prices of their current handsets by 20% in China. As the company has spent years building up their reputation as a premium brand, the last thing they want is to spend more time on budget phones but that may be the only move they have left to play. For now, details are still scarce regarding the company’s new budget-friendly line of smartphones but it is great to see that they’re finally doing something about their dwindling marketshare.

Do you think Samsung could once again be the top device manufacturer in China with their new plan of action? Do you think it would alter their “premium brand” reputation? Let us know your thoughts!