Under the siege of Chinese rivals, Samsung’s leading position has long been in danger.
Editor’s note: This article is from the micro-channel public number “DoNews” (ID: ilovedonews) , Author: Autumn, Editor in charge: Yang Bocheng.
Samsung’s rise and global expansion
One day in 1995, in a Samsung factory compound in Gumi City, 150,000 unqualified mobile phones were piled up like a hill. Standing next to them was just published in Frankfurt, Germany, “Except for Wife With children, everything must change” Li Jianxi, the second-generation successor of this famous declaration.
Without the slightest hesitation, the strongman with strong hands determined to carry out the reform to the end took the heavy hammer in his hand and slammed it down on the hill beside him. Then, under the gaze of more than 2,000 workers, he set fire to the debris at his feet, and a mobile phone worth 50 million US dollars was immediately there. The moment turns to ashes.
Looking at the raging flames in front of him, Li Jianxi knew in his heart that this fire destroyed not only US$50 million in economic losses, but also burned consumers’ minds that only produced imitations and defective products.” Second-rate factory”. At the same time, with the rebirth of the fire, is a Samsung empire that continues to surpass its opponents with quality and innovation as its “killer” and finally dominates the world of smartphones.
After the fire, there was a Boom The fierce “new business movement” started within Samsung.
Li Jianxi decisively cut off some of the loss-making fringe businesses and only retained the most profitable core projects such as electronics, finance, and trading. Among them, in the mobile phone business, Samsung began to pay close attention to product quality and continuously increased investment in talents and scientific research, and thus produced the world’s first MP3 mobile phone, the first dual-screen flip phone, and the first dual Model mobile phone and the first multi-megapixel mobile phone……
Relying on its advantages in innovation, Samsung began to emerge in the mobile phone industry, and finally succeeded in overtaking Motorola in 2007, becoming the world’s second largest mobile phone manufacturer, just behind the veteran overlord Nokia.
Similarly, in this year, the first generation of iPhone turned out to be popular all over the world, which triggered a reform movement in the traditional mobile phone industry. The upstart competition has just begun.
The time has come to 2010, three Star released the first Android-based smartphone Galaxy S . At that time, although HTC was gaining momentum and Nokia was still remaining, the Galaxy S was still a blockbuster with a series of top-notch hardware configurations, making it one of the few flagship models on the market that could directly compete with Apple.
After 70 days of listing, the sales volume of GalaxyS exceeded one million. With the help of Samsung’s strong channel advantages, it landed in more than 110 countries in one go, officially starting its globalization journey.
In the second year, the newly upgraded Galaxy S2 with various configurations went online as scheduled, and finally overwhelmed HTC with a sales volume of over 40 million units. In September of the same year, Samsung launched the first “giant screen” mobile phone GalaxyNote (5.3 inches)-you know, at the beginning, the industry generally believed in Jobs’s statement that “3.5 inches is the golden size of mobile phones”, so almost all mobile phones The screens are all under 4 inches, and Samsung’s innovation at the time looked like a “gambling”.
But the facts have proved that Samsung’s gamble is undoubtedly a success. As soon as the Galaxy Note came outIt is widely sought after by users and has led the “big screen” trend in the entire smart phone field. After that, major manufacturers have also made the screens of their mobile phones bigger and bigger, completing a real “screen revolution”.
Due to the dual flagship strategy of Galaxy S2 and Galaxy Note, Samsung has achieved unprecedented success in the smartphone market. In 2012, Samsung surpassed veteran player Nokia and smartphone upstart Apple with a market share of 30%, and officially became the global smartphone leader.
It is worth mentioning that, in addition to being overtaken by Huawei in the second quarter of this year, Samsung has been on this throne for nearly ten years and has basically led the entire development process of smartphones since its inception.
The reason why Samsung has been able to pass all the way and sit firmly on the top of the throne, in addition to the first entry, good at innovation and marketing advantages, more importantly, there is a complete and mature industrial chain behind it for its mobile phone technology support.
Relying on Li Jianxi’s frantic investment in semiconductor and display panel technologies in his early years, Samsung finally defeated Intel and owned the world’s most advanced semiconductor company, and it also maintained the number one market share in fields such as screen display, memory and flash memory. One’s position. Therefore, whether it is in terms of core technologies such as processors, memory, or screens, Samsung almost controls the lifeblood of the global mobile phone industry chain.
Relying on its absolute advantage in technology, Samsung is able to have superior configuration and leading-in-class features when each new machine is released, and at the same time have the confidence to reduce costs. It is precisely because of Samsung’s continuous success in flagship models over the years that it finally moved from a local Korean company to the world and became the well-deserved king of smartphones in the world.
The double-sided attack between China and overseas markets
With the rise of Chinese mobile phone brands, Samsung’s king status has also begun to encounter challenges.
According to Canalys data, in the second quarter of this year, Huawei surpassed Samsung for the first time with 55.8 million shipments, becoming the world’s largest smartphone manufacturer.
The reason why Huawei was able to “accidentally” climb to the top was mainly due to the contribution of the Chinese market. Concentrated outbreaks of foreign epidemics in the second quarter led to a collective decline in overseas sales of smartphones from major manufacturers, including Samsung, Apple, and Huawei.
However, due to the effective control of the epidemic in China this quarter and the stimulus of consumer activities such as 618, Huawei’s domestic market contributed 72% of its global shipments, thus making up for part of its overseas market loss. And Samsung, which currently has a domestic market share of less than 1%, has naturally not been able to reap any benefits from the recovery of the Chinese market. This has given Huawei a chance to overtake.
Actually, as early as 2014, Samsung was in ChinaAt one time, its market share was as high as 20%, playing the role of “leader”. However, with the rise of domestic brands such as Huawei, Xiaomi, and OV, the latter began to encircle Samsung, and gradually eroded the former’s living space in the domestic low-end mobile phone market by virtue of its cost-effective play.
In 2016, Samsung launched the highly anticipated Galaxy Note7 in an attempt to regain its decline in the mobile phone market. As a result, due to design flaws in the battery, this mobile phone has experienced many explosions around the world, and was once banned by airlines from being carried on planes.
What’s more surprising is that Samsung chose to exclude the Chinese market during the global recall of Galaxy Note7. This differentiated approach caused strong dissatisfaction among Chinese users, coupled with the influence of political factors at the time. Samsung began to suffer massive boycotts in China, and its market share fell all the way until it was almost completely squeezed out of the Chinese smartphone market.
After encountering Waterloo in the Chinese market, the major domestic mobile phone manufacturers took advantage of the victory and pursued them, and soon the war with Samsung went abroad. At present, Samsung is facing multiple encirclements and suppressions from Chinese brands all over the world: India has XiaomiLead the lead, Southeast Asia has a strong OV Siege, while in Europe, Huawei followed suit.
According to Canalys data, in the third quarter of 2020, Xiaomi occupied the first place in the Indian smartphone market with a market share of 26.1%, ahead of Samsung’s 20.4%.
In fact, this is not the first time Xiaomi is ahead of Samsung. As early as the fourth quarter of 2017, Xiaomi had successfully surpassed Samsung and became the largest smartphone brand in India through its deeply rooted “cost-effective” advantages and diversified marketing strategies.
In the Southeast Asian market, the “back garden” of Chinese mobile phone manufacturers, Samsung’s situation is also not optimistic.
According to the latest report from Counterpoint, in the second quarter of this year, OPPO successfully reached the top of the Southeast Asian market with a market share of 20.3%, while Samsung could only rank second with a market share of 19.5%.
Due to geographical advantages, Southeast Asia has always been the majorThe preferred market for mobile phone manufacturers to go overseas. Locally, Chinese brands among the top five mobile phone brands currently occupy four seats—OPPO, VIVO, Xiaomi, Realme—have formed an encirclement to Samsung. In addition, manufacturers such as OV are in the low-end machine industry chain. In terms of the strong advantages that have been cultivated for many years, it may be very difficult for Samsung to break through.
If it is said that Samsung has lost its first place in India and Southeast Asia one after another because Samsung’s advantages in low-end mobile phones are not obvious, then in its proud high-end market, Samsung’s advantages remain How many?
Take the European market as an example. In the past two years, as Huawei has focused on the high-end market, Samsung’s market share has begun to fall all the way, and the gap between the two has gradually narrowed.
However, since last year, due to the impact of multiple rounds of bans in the United States, Huawei’s sales overseas, especially in the European market, have begun to decline sharply. This has given Samsung the opportunity to regain its distance from the current situation. Looking at it, Huawei wants to catch up with Samsung again in the European market, and it is unlikely in the short term.
Samsung’s dilemma and way out
After taking turns with Chinese rivals in many countries and regions around the world, Samsung’s vitality has been greatly injured, and its market share has fallen from 35% at its peak to about 20% today. Although it still occupies the largest market share in the industry, the major dilemmas currently faced by Samsung cannot be underestimated.
First of all, technological breakthroughs have become Samsung’s top priority.
As mentioned earlier, the reason why Samsung has been able to emerge in the smartphone industry is due to its own technological advantages and innovation capabilities. Starting from the first generation of GalaxyS, Samsung can install every mobile phone on the market at that time. The top hardware configuration, and has been leading the trend in the industry in terms of product function innovations such as large screens, curved screens, and folding screens.
However, judging from its newly released top-of-the-line mobile phone Galaxy Note20 Ultra, Samsung’s technical advantages are no longer available. This is even more obvious after a horizontal comparison with Huawei Mate 40 Pro+ and Apple 12 Pro Max. obvious.
Comparison of four mobile phones
As you can see from the picture above, the biggest difference between Samsung and the other two phones isDifferences in processors: Huawei and Apple are equipped with their own Kirin 9000 and Apple A14, both of which are based on the latest 5nm process, while Samsung uses the self-developed Exynos990 and Qualcomm Snapdragon 865. The two models, both of which are made by 7nm process, lag behind the previous two in mobile phone performance.
In addition, Huawei is also ahead of Samsung in the two major functions of the camera and fast charging that are most valued by ordinary consumers. In a comprehensive comparison, the only thing Samsung surpasses Huawei in all indicators is its most advantageous screen technology.
From this point of view, in addition to the current screen advantages, Samsung has basically been overtaken by Huawei technically. This can also be verified from the market share of the two that have been getting closer. Although the US ban on Huawei has once again widened the gap between the two, it has become a top priority for Samsung to seek technological breakthroughs if it wants to sit firmly on the top of the list.
In the low-end market, it has been unable to control the right to speak, which is another big dilemma facing Samsung.
Since its inception, Samsung has been focusing on the high-end market of smartphones, ignoring the creation of a moat in the middle and low-end markets, and therefore giving its opponents a chance to break through. This is exemplified by the overtakes of opponents in India and Southeast Asia.
Although Samsung launched the Galaxy M series and Galaxy A series in the low-end market in the past few years, compared with the extreme price-performance ratios of Xiaomi and OV, Samsung cannot match its competitors in terms of performance and price. Therefore, re-layout in the low-end market and regaining the territory previously occupied by Xiaomi and OV is another key for Samsung to break the current predicament.
In addition to facing the catching-up of its peers, Samsung has to find a way out in the decline of the entire smartphone market.
Since the end of 2017, global smartphone shipments have declined for the first time and have maintained this trend, which means that user demand in the industry has become saturated and the industry has begun to decline.
In response to this crisis, other manufacturers such as Apple, Huawei, and Xiaomi have tried to expand their product lines and further explore in the fields of smart devices, 5G technology and the Internet of Things, but Samsung has missed the best in this wave opportunity.
Conclusion
From surpassing Motorola and replacing Nokia to become the global smartphone hegemon, Samsung has experienced the “golden decade” of the rapid development of smartphones.
In the past ten years, Samsung has always been one step ahead of its opponents in terms of mobile phone configuration and exploration of new features, which has triggered several waves of revolution in the mobile phone industry.
However, with the strong rise of Chinese mobile phone brands and various encirclement and suppression, Samsung’s advantages in technology and strategy are declining, and its leading market position has also suffered in many countries around the world.The same degree of challenge.
Although Samsung is still the world’s largest smartphone manufacturer, it is an indisputable fact that its global market share has been declining year by year and its growth rate has slowed down.
For this reason, Samsung’s technological breakthroughs, the reorganization of the low-end market, and the exploration of 5G and Internet of Things have become the key to breaking this dilemma. But judging from the current situation, Samsung’s chances of reversing this situation are not very great, and how far can it go as a dominance in the smartphone industry?