The World No. 1 & No. 2 smartphone manufacturers are battling it out to dominate the world’s fastest growing smartphone market.
Loaded with special features, including a safety mode for motorcyclists, Samsung Electronics Co Ltd is shoring up its market share in India as Apple Inc. renews its efforts to break into the world fastest growing market.
The South Korean giant has been steadily losing ground to local brands such as Lava and Micromax. Chinese brands have also eroded its market share. However, in the price-sensitive Indian market, Samsung’s market share has risen to 30% as of February this year from its 28.6% growth in the fourth quarter of 2015, says Counterpoint, a research firm.
Much of this rise has been driven by the strong sales from its mid-tier products, especially the newly launched Galaxy J series smartphones, says the company.
“Differentiated offerings are driving the trend in the mid-to-low-end segment,” said Manu Sharma, VP of product marketing, Samsung India Electronics.
Targeting bike riders in the region, Samsung has recently launched its “S bike” mode, a feature when activated notifies the caller that the phone’s owner is riding and cannot answer right now. Other significant features which have typically been a major draw are better battery life and optimized 3G data usage.
As per analysts, Samsung J2, J5 and J7 models have accounted for around 20% growth in the Indian mobile market by value. Cost rationalization during production has also been passed down to consumers, which have allowed Samsung to competitively sell higher quality smartphones for less.
In contrast, Apple has been struggling to get a foothold, in the fiercely competitive Indian market with its hugely expensive phones. As of the fourth quarter of 2015, Apple’s market share was a miniscule 2%. Its efforts to import refurbished phones and sell them in India is facing stiff opposition from local vendors.
Although Samsung is feeling the heat from Apple’s sale in the premium segment, at the mid and lower end however, as per analysts, Samsung is dancing along with the competition with its attractively priced feature packed product lines.
“Samsung mid-level smartphones, especially the J series, have been doing quite well in emerging countries, especially in India,” said Tarun Pathak, an analyst with Counterpoint Technology.
Such is the success of its efforts, analysts expect Samsung to have better-than-anticipated sales for its flagship Galaxy S7 smartphone, which will significantly boost its earnings. This has even given rise now expectations that Samsung’s profit for the January to March period will top 6 trillion won ($5.2 billion), compared to the Thomson Reuters StarMine SmartEstimate of 5.6 trillion won, which was derived from a survey of 22 analysts.
Although Samsung does not divulge any details beyond its regulatory requirements for the January to March period, analysts expect that this will be the first time its mobile division will be the top earner, in the last seven quarters.
Despite the price gap between Apple’s iPhone and its smartphones, industry analysts opine that Samsung could feel the heat from Apple’s renewed emerging market focus, if it were to win an approval that allows it to import refurbished iPhones.
“Apple’s portfolio strategy with the iPhone SE launch is particularly designed to make room for refurb devices for sub-$300 price-points. So Samsung and others who are playing in the $200-$400 segment should be worried,” said Neil Shah, a Counterpoint analyst.
($1 = 66.4350 Indian rupees)
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