Samsung has been smooth sailing for a few years in the mobile market, but 2014 has proved hard. In their earnings report for the third quarter, Samsung reported operating profit down 60 percent and smartphone sales down 20 percent from last year.
In terms of market share on mobile, Samsung has lost 11 percent this year. Xiaomi, LG and other manufacturers all gained more market share this year, and rival Apple only lost 1 percent market share.
Samsung is also one of the only manufacturers to have less sales this year than last. Even with the drop in sales, Samsung still sells twice as many mobiles as Apple and four times as many as the third biggest manufacturer, Xiaomi.
In order to get back on track, Samsung has announced it will “fundamentally reform” its mobile division for 2015. The reform will look to change product categories and make them more understandable to customers.
This will come alongside standardisation of components across regions and phone brands. This could mean the end of Samsung’s partnership with Qualcomm in the west, in favor of their own Exynos processors from South-East Asia.
In the report, Senior VP Kim Hyun-joon said Samsung would seek more cost efficiency and claimed the high-end phone sales were shallow compared to previous years. This might mean a cut in the amount of premium devices on Samsung’s portfolio.
This is an interesting move from Samsung, if they were to split off from the high-end brands. The Galaxy Note 4 is reportedly not doing very well, with the iPhone 6 and iPhone 6 Plus outselling it 10-to-1 worldwide.
Samsung has had a lot of issues maintaining sales in China, India, Indonesia and other South-East Asian countries, where low-end devices are what the majority of customers buy. They will need to work on promotion and brands next year, if they want to get the buyers back.