Image source: Samsung.com
Samsung’s Co-CEO Jong-Hee Han has discussed the company’s strategy amid stagnating markets in the tech sector. One area of focus for Samsung will be device integration, an area the company has historically struggled to keep up with its key competitors. In his first media interview since taking the role, Mr. Han discussed the opportunity Samsung has identified within the complex challenges facing the tech sector.
Samsung’s revenue saw a significant rise at the outset of the Covid-19 pandemic in a pattern reflected throughout the sector. As consumer patterns changed in the tech sector later in the pandemic, Samsung saw a significant drop in profit. In the final quarter of 2022, Samsung’s profit is anticipated to be half the figure for the same period in 2021. A critical factor in this fall in profits is the oversupply, and consequent drop in the price of memory chips, Samsung’s core product.
These factors have been exacerbated by competition from phone manufacturers in China. Devices from this segment of the market, including devices by companies such as Honor and Huawei, offer significant value for money and have presented considerable competition to leading tech companies. With Samsung’s operating profit at 10%, down from 23% a decade earlier, a significant factor in this reduction is competition from manufacturers in China.
Another factor has related to supply chain issues. With strict Covid-19 lockdowns in China, many companies relying on manufacturing in China have seen significant disruption. Samsung has focused on building resilience to these global factors by ensuring flexibility in its logistical infrastructure. One example of this was in ensuring that a factory in Mexico had the capacity to supply products to Europe in addition to the US. With factories in Asia, Central America, and South America, Mr. Han emphasized the importance of resiliency against the backdrop of geopolitical uncertainty.
Samsung’s strategy of building device integration, connective and related systems is a key focus as the company works to bounce back from a slump in sales. Neil Maston of TechInsights Inc estimated that the successful integration of devices by Samsung could result in profits doubling. Whilst Samsung leads the phone market in the total volume of phone sales, it still lags behind Apple in selling premium devices. Counterpoint Research estimated Apple’s market share of devices priced over $600 at 77% compared to Samsung’s share of 16%. As Samsung vie for position in a highly competitive market, the integration of devices will be key to the company’s success.
Image source: Samsung.com
Samsung’s Co-CEO Jong-Hee Han has discussed the company’s strategy amid stagnating markets in the tech sector. One area of focus for Samsung will be device integration, an area the company has historically struggled to keep up with its key competitors. In his first media interview since taking the role, Mr. Han discussed the opportunity Samsung has identified within the complex challenges facing the tech sector.
Samsung’s revenue saw a significant rise at the outset of the Covid-19 pandemic in a pattern reflected throughout the sector. As consumer patterns changed in the tech sector later in the pandemic, Samsung saw a significant drop in profit. In the final quarter of 2022, Samsung’s profit is anticipated to be half the figure for the same period in 2021. A critical factor in this fall in profits is the oversupply, and consequent drop in the price of memory chips, Samsung’s core product.
These factors have been exacerbated by competition from phone manufacturers in China. Devices from this segment of the market, including devices by companies such as Honor and Huawei, offer significant value for money and have presented considerable competition to leading tech companies. With Samsung’s operating profit at 10%, down from 23% a decade earlier, a significant factor in this reduction is competition from manufacturers in China.
Another factor has related to supply chain issues. With strict Covid-19 lockdowns in China, many companies relying on manufacturing in China have seen significant disruption. Samsung has focused on building resilience to these global factors by ensuring flexibility in its logistical infrastructure. One example of this was in ensuring that a factory in Mexico had the capacity to supply products to Europe in addition to the US. With factories in Asia, Central America, and South America, Mr. Han emphasized the importance of resiliency against the backdrop of geopolitical uncertainty.
Samsung’s strategy of building device integration, connective and related systems is a key focus as the company works to bounce back from a slump in sales. Neil Maston of TechInsights Inc estimated that the successful integration of devices by Samsung could result in profits doubling. Whilst Samsung leads the phone market in the total volume of phone sales, it still lags behind Apple in selling premium devices. Counterpoint Research estimated Apple’s market share of devices priced over $600 at 77% compared to Samsung’s share of 16%. As Samsung vie for position in a highly competitive market, the integration of devices will be key to the company’s success.
