Whilst Apple was celebrating record profits and shipping 74.5 million iPhones in Q1 2015, Samsung was left to rue a period that saw it report its first annual earnings decline in some three years.
Samsung has been trying to arrest a decline in its traditional strongholds of China and the Far East, and in all honesty it has been falling down against the growing band of cheaper local vendors that are selling handsets directly to consumers and making a success out of it. At the same time, Apple has been able to trigger off huge growth in China even though its devices cost more than Samsung’s offerings.
Simply-put the midrange offerings in China cannot compete with the likes of Huawei or Xiaomi and the top of the range models cannot match Apple now that it also has a phablet to go with its regular-sized smartphones. It’s attempting to claw this back by switching from polycarbonate casings to metal ones but, even though each of its devices is packed with features, the decision to change to metal casings is an example of the company missing the boat.
All of this has meant that Apple is almost level with Samsung when it comes to smartphone sales, something that the Korean company has been able to take as a given since it reached the top in the third quarter of 2011.
To stop this happening it first needs to put a stop to the sheer volume of different product ranges it delivers on an almost monthly basis and shows no signs of slowing. Figures quoted by ArsTechnica late last year showed that 2014 was a below average one for Samsung even though it released a huge 59 different smartphone variations in 2014. It was below average as its average over the past three years has been 63 (yes, SIXTY THREE).
Samsung does plan to cut around 25-30 per cent of its lineup in 2015 to ward even heavier losses but that will still mean almost 40 smartphones hitting the market in 2015. Compare that to Apple, where even a two phone release is considered excessive, and you get the picture. This point eats again into its struggles against competitors in China as customers looking at Samsung just don’t know which device to pick and would rather choose one handset from the likes of Xiaomi or Huawei instead of having to minutely pick one of Samsung’s many offerings.
The move towards metal casing on its top of the range smartphones is definitely a good thing for Samsung, however, it must make sure that it makes good on the promise to trim the fat from its smartphone range and think about going further than the 25-30 per cent cut already proposed.