SEOUL (AFP) – Samsung Electronics has announced plans to slash the number of smartphone models it issues next year by up to one-third as it tries to cut prices in the face of intense Chinese competition.
The strategy, confirmed by a company spokesman Tuesday, was unveiled during a presentation in New York by the South Korean conglomerate’s head of investor relations, Robert Yi. He said the company – which last month reported a near 50-per cent plunge in third-quarter net profit following a 20 per cent drop in the previous quarter – would reduce the number of smartphone models in 2015 by between one-quarter and one-third. The strategy is expected to be accompanied by a significant increase in the production of remaining models that can be sold more cheaply to compete with cut-price Chinese rivals. The recent nosedive in Samsung’s fortunes followed several years of stellar growth and a seemingly endless succession of record quarterly profits driven by its all-conquering mobile unit.
Its flagship Galaxy S smartphone has suffered in the high-end market from the popularity of arch-rival Apple’s new iPhone 6, while its dominance of the middle- and low-end handset segment has been challenged by Chinese handset makers such as Huawei, Xiaomi and Lenovo.