Samsung revises smartphone outlook
is the success of just a single handset model enough to justify doubling market share expectation?
Published: 6 September, 2010
Hot on the heels on the Galaxy S' success, which has sold over three million units worldwide since it first launched a couple months ago, Samsung has revised its smartphone targets for this year and 2011. But in a fiercely competitive smartphone market, is the success of just a single handset model enough to justify doubling market share expectation?
In an EDaily interview at the IFA trade show in Berlin, JK Shin, head of Samsung's Mobile Communications division, boasted that this year's smartphone sales would surpass its original target of 18 million units. The Korean handset OEM is now shooting for 25 million smartphone handsets to leave its production factories this year and this is expected to double next year.
Twenty five million sales would take Samsung into fourth position in the global smartphone rankings - behind Nokia, RIM and Apple. Research firm ARCchart is predicting that smartphone sales this year may hit 280 million, which would give Samsung just under 9% of the 2010 market, double the 4.8% share it saw in the last quarter, according to IDC figures. So what supports this ramp in expectations?
By all accounts, the Galaxy S has been a success. The Android device is the Korean vendor's first smartphone sold globally through some 100 carriers, and has sold more than 3 million since it launched in July. However, this pales in comparison to the 8.4 million iPhones sold from April to June. Apparently, a Samsung representative at IFA indicated that the company does not plan to introduce new models to replace the Galaxy S during the coming holiday season, hoping instead for strong sales of the model to continue. If true, this will come as a disappointment to market watchers who'd been anticipating the release of a new Galaxy-like device at the big media event Samsung is hosting in New York on the 16 September.
It's no secret that Android is now a big part of Samsung's smartphone strategy: "We are Prioritizing our Android platform. Android is very open and flexible, and there is a consumer demand for it," YH Lee, head of marketing at Samsung Mobile, told Reuters at the IFA consumer electronics fair. And Android will not be limited to smartphones - at the event Samsung unveiled it Galaxy Tab, a 7" tablet running Android 2.2. However, Samsung is not pinning its massive smartphone shipment revision on Android alone.
There are two other smartphone platforms which Samsung is pushing for various strategic reasons - bada and Windows Phone 7. In addition to the Galaxy Tab, Samsung also unveiled last week the Wave 723, the second handset based on its home-grown smartphone OS, bada. YH Lee said the company has a range of bada models due for release in the coming quarters. Samsung will also launch a Windows Phone 7 smartphone before yearend to appeal to what the company refers to as "professional and specialized demand".
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