The Korean technology giant is slowly falling behind rival Apple and Chinese players.
Samsung is the only one of the five largest smartphone manufacturers in the world to produce fewer devices in the third quarter of this year than before. The company has lost significant market share to old American rival Apple and Chinese competitors. Samsung’s global market share fell from 21 percent to 18 percent in the third quarter compared to the same period last year according to IDCand its advantage over Apple decreased to 0.6 percent. Analysts estimate that the operating profit of its smartphone business fell by as much as 30 percent in the same period.
“Samsung’s smartphone business is at a low point,” said Park Kang-ho, an analyst at Daishin Securities. Now Chinese companies are pushing hard with foldable phones to steal Samsung’s advantage.” Samsung’s 12-year reign as the world’s number one smartphone maker by handset sales ended last year when Apple briefly took over the top spot before the Korean giant regained the lead in the first quarter. However, Apple’s new generative artificial intelligence features may help the company overtake Samsung next year. “Chinese brands have become much more competitive not only in terms of prices, but also in terms of features,” said an employee of Samsung’s smartphone division.
Samsung’s advantage was reduced to a few tenths of a percent
The Asian company’s smartphone struggles come at a critical juncture. The semiconductor division, which accounts for 60 percent of Samsung’s operating profit, has been plagued by a series of failures. The head of its chip unit issued a rare apology three weeks ago after falling far behind rival SK Hynix in developing high-tech memory chips for artificial intelligence hardware.
Observers say many of the conglomerate’s various divisions are linked, noting reports that Samsung may be forced to turn to U.S. rival Qualcomm’s chips for its upcoming Galaxy S25 flagship smartphone as it struggles to produce its homegrown Exynos processors. The company’s share price fell by 27 percent compared to a year ago. “Samsung is facing increasing structural problems due to complacency and bureaucracy in most of its previously dominant businesses, from chips to smartphones to displays,” said Park Ju-geun, head of Seoul-based corporate research group Leaders Index.
In the smartphone market, Samsung has been a pioneer in foldable devices, but according to IDC, it handed over the top spot to Chinese rival Huawei earlier this year, which had a 27.5 percent share of the foldable device market in the second quarter, compared to Samsung’s 16.4 percentage share. Although these highly specialized models make up just 1.2 percent of the global smartphone market, they are the fastest growing segment in an otherwise relatively stagnant industry. Huawei also scored a symbolic victory last month when it released the world’s first “fold-in-three” phone, the Mate XT, which came with a price tag of nearly $3,000. Another fast-growing Chinese rival, Honor, last month at IFA in Berlin he scoffed on the Korean company by emblazoning its Magic V3 foldable phone with a “micro apology” to consumers who have suffered from Samsung’s “heavier alternative”.
Samsung tried to fight back with a thinner and lighter “Special Edition” Galaxy Z Fold 6, but the late domestic launch was met with heavy criticism, as the new model could hardly be found in stores. Samsung said it could not make enough initial quantities. The company added that its flagship Galaxy S24 series with AI features, introduced in January, had been “warmly received” and exceeded its expectations, adding that Galaxy AI will be available in around 200 million Galaxy devices this year. According to analysts, the most important test will be the reception of the Galaxy S25, which will be released in January, which will have to compete with iPhones and Android-based devices boasting AI functions. Jene Park, an analyst at Counterpoint Research, said: “To remain a leader, they need to present differentiated AI services that impress people.”
Source: sg.hu
