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Samsung plans to maximize Galaxy experience and avoid cost reduction in 2023
Samsung holds a global meeting to discuss its business strategies for 2023. In this meeting, the company revamped its smartphone strategy. For 2023, Samsung plans to maximize the Galaxy user experience instead of focusing on smartphone cost reduction.
An exclusive information via IT Science suggests that Samsung has finally considered giving up its current cost reduction strategy and planned to return to the normal route to intensify the functions customers want through the optimization of semiconductors for high-performance smartphones.
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The new strategy suggets that the company aims to narrow the gap with Apple in the premium smartphone market and regain the trust of consumers.
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Samsung Electronics Vice Chairman Han Jong-hee ordered at a DX (Device Experience) division management meeting held last month that all departments should think of ways to strengthen the rivalry of smartphones without falling into the trap of cost reduction.
Meanwhile, in reacting to this remark, a Samsung Electronics official said, “Cost reduction is something that even latecomers like Chinese companies can do without difficulty.”
The company analyzed Vice Chairman’s order as an expression of his desire to overcome the ‘sandwich’ situation where Apple escapes and Chinese companies chase.
Samsung has focused on achieving profitability through cost reduction since mid-2010. A typical example is that the company is targeting the emerging market with mid to low-priced smartphones come under the Galaxy A series.
But over the years, Chinese smartphone makers, like Xiaomi, Oppo, and Vivo, made rapid advances in hardware, which weakened Samsung’s unique marketing strategy.
At the same time, American company Apple is fighting a tough battle in the premium smartphone market. Apple had 57% of the global premium phone (over $400) market share and Samsung has 19% in the third quarter, according to market researcher Counterpoint Research.
Although Samsung’s foldable phones are receiving positive reviews, they account for only 1% of the total market. It suggets that Samsung would cede the number 1 market share in the entire smartphone market beyond the premium market to Apple in the fourth quarter of this year.
New Galaxy Optimization AP Development Team –
Vice Chairman Han’s order reflected an organizational reshuffle of Samsung made earlier this month and regular personnel matters to think of ways to strengthen product competitiveness rather than cut costs.
The MX (Mobile Experience) division, which is in charge of smartphones established a new AP solution development team through organizational restructuring. An application processor (AP) is a semiconductor that plays the role of the brain of a smartphone and is considered a key component that determines the performance of a product.
The information says that the AP Solutions Development team will be in charge of prior art development, performance analysis, and commercialization related to AP. This team is expected to be in charge of developing customization solutions for APs going to Galaxy.
Shipments of Samsung’s Galaxy Z Flip 5 and Z Fold 5 are approximately 10% higher than last year’s models. If 7 million new products and 3 million units of legacy models are shipped this year, the number will reach 10 million units for the first time in history.
According to the info, shipments of the Galaxy Z Flip 5 and Fold 5 were found to be 8-10% higher than the shipments of their predecessors. In terms of shipment volume by model, Z Flip 5 accounts for 60-65%, and Z Fold 5 accounts for 30-35%.
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Component partners of Samsung say that the number of parts ordered for the two recent models did not change significantly or decrease slightly compared to expectations.
Earlier, it was expected that the Korean tech giant would order 12 to 13 million units of parts for the Galaxy Z Flip 5 and Fold 5 by the end of this year. However, recent reports revealed that there may be a decrease of about 1 million units.
By the end of 2023, Samsung Display is likely to supply nearly 70 million units of OLED for the iPhone 15 series to Apple. The company’s OLED volume by model is estimated to be in the low 20 million units for the iPhone 15 and 15 Plus, 9 to 10 million for Pro, and ~ 30 million for Pro Max.
Among the four iPhone 15 models, the 15 Pro Max OLED estimate, which Apple plans to produce the most, is four times higher for Samsung than for LG Display. Industry watchers say that Samsung Display’s iPhone 15 Pro Max OLED volume is in the mid-20 million units, three times that of LG Display.
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The prevailing view is that LG Display will have 15% more OLED volume than Samsung Display (9 million to early 10 million units). Those who see it differently predict that Samsung Display will secure around 20 million units of 15% OLED, which will be more than LG Display.
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Apple’s Surprising Victory: Takes the Crown in Indian Smartphone Exports, Samsung Drops to Second
For the first time, Apple surpassed Samsung in smartphone export from India. The company shipped 49% of the country’s total 12 million shipments in the second quarter. Samsung, on the other hand, secured 45% of India’s total smartphone shipments in the same period.
Apple clocked a rapid growth in export volumes in the last year by making iPhones through contract manufacturers in India. The Cupertino-based company’s share of exports soared from just 9% of the roughly 8 million smartphones shipped in Q2 2022, to almost half the total smartphone exports in Q2 2023.
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Samsung’s share of export volumes fell from 50% in Q1 2023 to 45% in Q2 2023. This marks a sharp decline from Q2 2022 when the company had a dominating 84% of the export market from India. Meanwhile, exports by other Android brands (Xiaomi, Motorola, Vivo) declined from 10% in Q1 2023, to 6% in Q2 2023.