Wired
Samsung’s share of the U.S. mobile phone market hit another record.
According to Counterpoint Research statistics, in Q1 2022, Samsung’s share of the U.S. smartphone market will reach 28%, an increase of 3 percentage points from the same period last year, becoming the highest in eight years, and the market share gap with Apple has narrowed significantly. Apple ranked first with a 47% market share, down seven percentage points from the same period last year.
At the same time, Strategy Analytics research data shows that in Q1 2022, Samsung ranked first in global mobile phone shipments with a market share of 23.4%, which is Samsung’s best Q1 performance in the past five years.
Compared with the US market and even the global market, Samsung’s performance in the Chinese market has shown a “two layers of ice and fire” – almost no sense of existence, and its market share is below 1% all year round.
According to Counterpoint Research statistics, the top five smartphone manufacturers in the Chinese market in 2021 are vivo, OPPO, Apple, Xiaomi, and Honor. Samsung belongs to other categories due to its small share (the total market share of other categories is 4%).
In fact, since the Galaxy Note7 explosion in 2016, Samsung’s share of the Chinese mobile phone market has been declining, from 2.4% in 2017 (GFK data) to 0.8% in 2018 (Strategy Analytics data), and in the following years It has been “accompanying” the Chinese mobile phone market and has become a mobile phone manufacturer in the Others category. Therefore, returning to the Chinese mobile phone market has become an important “proposition” for Samsung.
Samsung has repeatedly launched the “return to the Chinese market” Slogan at the mobile phone new product launch conference and even the mobile phone chip launch conference. Since last year, Samsung’s return to the Chinese market has accelerated.
At the end of 2021, Samsung established a new Chinese team, named China Business Innovation Team, dedicated to achieving sales breakthroughs in China, one of the world’s largest markets, in various businesses ranging from mobile phone terminals to semiconductor chips.
At the beginning of this year, Samsung set up a new division, which aims to boost its business in the fields of smartphones and home appliances by analyzing business habits and consumer preferences in the Chinese market.
During the Winter Olympics, Samsung was not only a top sponsor, but also prepared gifts such as Galaxy Z Flip3 5G mobile phones and Galaxy Buds2 earphones for athletes. It also built pop-up stores with the theme of the Winter Olympics in the core business districts of Beijing, such as Sanlitun. Consumers can use Samsung folding screen mobile phones to complete various AR games in exchange for souvenirs including Winter Olympics badge blind boxes and stickers, attracting many consumers to participate…
A series of team and department reorganizations and marketing actions first pointed to the Chinese smartphone market, where Samsung’s share is less than 1%.
Lost the Chinese market
In August 2016, there were many explosions after the Samsung Galaxy Note 7 mobile phone was released globally. In September, Samsung held a press conference to apologize for the defect of the mobile phone battery, and launched a global replacement and recall plan. The Chinese market is different from other markets due to the use of batteries. Excluded from recall program. In October, the National Bank version of the Note 7 also exploded. Under the interview and investigation of the Law Enforcement Inspectorate of the General Administration of Quality Supervision, Inspection and Quarantine, Samsung finally decided to launch a recall plan for the Galaxy Note 7 mobile phone in the Chinese market.
Due to differential treatment, Samsung mobile phones quickly fell from the altar in the Chinese market.
Changwen Wang of Changwen Consulting recalled to DoNews that after the explosion of the Samsung Galaxy Note 7 mobile phone, a large number of domestic distributors returned the mobile phone. On the other hand, from the perspective of the domestic mobile phone market, 2016 was the most rapid development period for domestic mobile phone manufacturers represented by Huawei.
Compared with other mobile phone manufacturers, Samsung is also more chaotic in terms of channels, and various forms of smuggling occurred. At that time, the price system was relatively transparent, and the market profit of channel merchants was low and not very profitable.
“As a result of various reasons, Samsung has shrunk and declined significantly in the Chinese market, and its sales have been pushed from the peak to the lowest point in history, maintaining a share of less than 1% all year round.” Wang Changwen said.
In addition, Samsung’s corporate culture is also out of tune with the Chinese market. Shortly after the Samsung Galaxy Note 7 explosion, many media disclosed that at the Samsung provincial dealer conference, in order to get dealers to place more orders, Samsung executives knelt down to the dealers and said that it was because Grateful and respectful dealers, causing an uproar.
“In the past, Samsung’s global play and strategy were the same. In the Chinese market, some management methods and leadership methods were not in line with the actual market conditions. The way of thinking is biased towards the thinking of Party A, just like Nokia in the past, it is top-up The client basically has no right to speak.” Wang Changwen said that the difference in management and thinking mode also caused Samsung to never break through 1% in the Chinese market.
Home in Guangzhou, Ms. Li Meng, who bought a Samsung Galaxy Note 7 phone six years ago and it exploded, told DoNews that after her phone exploded, Samsung forcibly recovered the phone, claiming to have detected the problem, but eventually dropped the phone. Due to the explosion of photos, Li Meng did not perform any after-sales service and claims work. After the incident, Ms. Li Meng was very dissatisfied with Samsung’s service attitude and replacement process, and has never purchased any Samsung terminal products.
With such a heavy historical burden, can Samsung come back?
hard to break through
At the end of 2018, at the Samsung Galaxy A8s conference, Samsung first proposed “returning to the Chinese battlefield”. Since then, at the 2019 Samsung folding screen mobile phone Galaxy Fold, Samsung Galaxy S10 series, Galaxy Note10 and other new product launches, Samsung mentioned that “it has returned to the (China) battlefield”.
Quan Guixian of Samsung Electronics Greater China also mentioned many times that Samsung will comprehensively accelerate the localization process and deepen cooperation with domestic operators and other partners. Including technology, product, retail, and marketing, such as upgrading core business district channels, cooperating with the International Olympic Committee, signing new spokespersons, etc. In addition, for the Chinese market, not only in the field of mobile phone terminals, but also in the field of mobile phone chips, Samsung has also stepped up its cooperation with domestic mobile phone manufacturers.
At the end of 2019, Samsung and vivo jointly launched the 5G chip Exynos 980. Subsequently, in November 2020, Samsung launched the chip Exynos1080 with a 5nm process specifically for the Chinese market, becoming the third manufacturer to launch a 5nm process after Huawei and Qualcomm. More importantly, Exynos1080 gave up its self-developed architecture. It is an iconic product of Samsung’s mobile phone chip tactical change.
On the one hand, China is at the transition point from 4G to 5G technology. The R15 standard (mainly for enhanced mobile broadband eMBB) is frozen. The commercial use of 5G on the C-side has just begun, and it is in the stage of consumer replacement, which is rearranged by mobile phone manufacturers. The best chance. On the other hand, whether it is mobile phones or chips, the Chinese market has become a key market for Samsung’s business breakthroughs.
Despite many actions, Samsung has not reversed its predicament in the Chinese market and got rid of the quagmire of less than 1% market share.
Li Fei, a mobile phone sales channel businessman, found that Samsung mobile phone sales have improved, but there is still a big gap compared with other brands of mobile phones, especially the high-end models sold well when they first came on the market, but after a period of time, sales began to rapidly slip. “The main problem is Samsung’s product line. Samsung’s mobile phone product line is short, with very few products, and the price is relatively high.” Li Fei said.
Sun Yanbiao, chairman of Rising Sun Big Data, said, “Samsung’s core problem is not only the lack of a complete product line array, but also the channels. Samsung has been forgotten in the minds of domestic consumers for a long time in the past, and dealers now not only need advertisers to vigorously promote, We must truly realize the revitalization of the Chinese market by expanding market share.”
Zhang Zhang, who is based in Guangzhou, told DoNews that he would not consider buying a Samsung phone for the time being. “It mainly depends on the second-hand mobile phone market. After the launch of Samsung mobile phones, the price has plummeted.” The data also confirms this phenomenon. SellCell research data shows that two months after the Samsung Galaxy S22 series was launched, the price drop was three times that of the iPhone 13. The value loss was as high as 46.8%.
Liu Ming told DoNews that although Samsung has no opportunity in China, and almost no one of his friends use Samsung mobile phones, he still pays attention to Samsung. It’s just that there are too few physical stores in China, so he can only watch some evaluation videos online. In addition, the price of Samsung’s new phone is higher than that of domestic mobile phones, and there are not many bright spots. Folding screen creases are also more serious than Huawei’s. In addition, consumers The replacement cycle becomes longer, and the possibility of changing the mobile phone brand at will is relatively small.
DoNews checked Samsung’s official website and found that Samsung has only one full-product store in Beijing, located on Dongsanhuan Middle Road, Chaoyang District; 21 Galaxy authorized experience stores; and only 14 mobile phone/tablet after-sales centers (all outsourced, some of which belong to airport pick-up stations) , only responsible for receiving, sending, and returning the faulty machine). In contrast, Xiaomi has 126 exclusive stores + direct sales stores and 18 service outlets in Beijing; OPPO has 64 authorized experience stores and 12 official service centers in Beijing; vivo has 56 experience stores in Beijing and official after-sales service. 15 centers.
There is a huge gap between Samsung and other mobile phone manufacturers in the number of stores.
“Samsung’s return to China has indeed made some changes in offline channels and retail, but it does not seem to be very strong.” Sun Yanbiao, chairman of Rising Sun Big Data, also mentioned the impact of the new crown pneumonia epidemic on Samsung, “In February this year, Samsung just After the Galaxy S22 series new product launch conference was held, due to some objective factors (such as the epidemic), many policies could not be implemented at all. Moreover, channel and brand building cannot be built overnight.”
Where are the opportunities for Samsung?
How to restart the Chinese market?
Folding screen phones are the top priority of Samsung’s mobile phone product line.
At the beginning of this year, Feifei, who has experienced the Samsung pop-up store, told DoNews that all the experience machines in the pop-up store are Samsung Galaxy Z Flip 3 folding screen mobile phones, and most of the commemorative badges obtained are themed on folding screen mobile phones, including Galaxy Z Flip 3 mobile phones. Z Flip, Galaxy Z Fold series.
“Folding screen mobile phones are definitely an entry point, including the screens of folding screen mobile phones launched by Xiaomi, OPPO, and vivo, all from Samsung. Samsung’s folding screen technology covers almost all domestic mobile phone manufacturers.” Wang Changwen said.
Samsung’s folding screen mobile phones have performed well in the Chinese market and the global market. IDC data shows that in 2021, China’s folding screen mobile phone market will show a two-strong pattern. Huawei ranks first with a market share of 49.3%, and Samsung ranks second with a share of 28.8%. From the perspective of the global market, Omdia data shows that Samsung has shipped more than 10 million folding screen mobile phones, accounting for 88% of the global sales of folding screen mobile phones.
At the high-end market level, Samsung has also begun to act on the channel side.
Wang Changwen found that from January this year, Samsung’s support for the channel began to increase. “Once Samsung’s store opening standards are met, in addition to the provision and support of all experience machine hardware, Samsung will help support even the basic decoration of the store, such as moving in with a bag. In addition, it will also provide housing subsidies according to the level and sales volume of the channel dealers. “
“From the perspective of Samsung’s overall layout, it will definitely increase its layout in the Chinese market, and there have been some changes in channels.” Wang Changwen believes that Samsung wants to return to China, in addition to changes in its business model and attitude, more importantly, it needs to be in the The Chinese region has established a more localized management method and channel method.
Li Fei also said that because Samsung’s current volume in the Chinese market is very small, many channels have no supply, and there is no price war. Samsung’s single-machine gross profit is between 800-1,000 yuan. The single-machine gross profit and profit are very good, which is attractive to channels force. “Many merchants on the channel side began to actively contact Samsung, because after all, after Huawei’s mobile phone was trapped, it left a market vacancy. When customers need high-end phones, in addition to Apple, Samsung has become another high-end product because of its irreplaceability. choose.”
As for how Samsung really returned, Sun Yanbiao concluded: “The high-end market and women’s market are indeed Samsung’s incisions, but Samsung needs to give full play to its unique advantages, such as optics, cameras, etc., in order to truly change the current market share that is too low. predicament.”
(Li Meng, Li Fei, Zhang Zhang, Liu Ming, and Feifei are pseudonyms in the text)