HIGHLIGHTS
- On Wednesday, Samsung announced its new Galaxy S22 series.
- As its growth engine, Samsung will concentrate on the luxury category.
- The epidemic jolted the smartphone market out of its rut.
Samsung is reorganising its smartphone strategy for the first time in years, focusing on its best-selling Galaxy S and foldable Galaxy Z line of handsets. In its challenge against Apple, the firm intends to withdraw its Note brand of stylus-equipped phones and instead disperse that capacity throughout its portfolio while promoting premium foldables.
"In the short term, our operation will focus on a two-track strategy: flagship S series in the first half of the year and creative foldable lineup in the second half," TM Roh, Samsung's mobile boss for the last two years, said in a rare interview. "We will stick to this policy until there is another huge breakthrough, which we are working hard to achieve."
On Wednesday, the world's largest smartphone manufacturer introduced its newest Galaxy S22 series, including an Ultra variant with a pen. This basically recreates the iconic Galaxy Note recipe of a large-display handset with a pen, and it comes months after Samsung declined to offer a new Note in August. The business bet on its foldables to fill the hole and saw the decision pay off, with sales of the category increasing many times over and its average selling price for mobile devices increasing several times over.
According to Roh, Samsung will focus on the premium category as its growth engine and wants to spread the Note experience throughout its Galaxy hardware ecosystem, which includes tablets, laptops, and phones. Foldables will also expand into other categories, and the business aims to add one or two additional smartphone form factors to its inventory during the next three years, he says.
"Under the COVID circumstance, the smartphone sector accelerated developments that would have previously taken a decade," Roh explained. "We are starting the second stage of market expansion." As people use cellphones for longer and in more ways than ever before, there is a growing demand for high-end luxury devices."
The pandemic jolted the smartphone market out of its rut - growth had plateaued and replacement cycles were lengthening - and Samsung now sees people more willing to upgrade their phones to improve video calls, gaming, and daily communications functions as they rely on their devices for work and play. According to Roh, initial demand for the Galaxy S22 phones from carriers and partners is up by double digit percentages compared to the previous year, owing to the new Ultra variant.
"The Note series was becoming a little long in the tooth, and it was an obvious option to incorporate the S-Pen into the mainstream S-series, especially given the company's successful foldable lineup in the second half of the year," said IDC analyst Bryan Ma. "Foldables help Samsung differentiate its offers from the rest of the industry, particularly Apple, which also releases new phones at the end of the year."
Since the appointment of 53-year-old Roh to the position in January 2020, Samsung's mobile business has had to deal with lockdowns in major cities, factory shutdowns, and chronic supply chain disruptions. So far, the firm has worked around component shortages, and he expects the situation to improve this year.
As part of a companywide reorganisation, Samsung merged its mobile and consumer electronics divisions into a single division late last year. According to the corporation, it did so in order to establish a more unified ecosystem of products. Making its gadgets operate smoothly together is intended to help Samsung compete with Chinese competitors such as Xiaomi and Oppo, as well as address the threat posed by Amazon's Alexa speech assistant, which now covers everything from smart speakers to thermostats. By exposing its ecosystem to other partners and hardware makers, Samsung will adopt a more Amazon-like strategy than Apple.
According to Roh, the Suwon-based tech giant sees the increasing number of foldable devices from competitors this year as validation that it made the right strategic move early on. As a result, the business anticipates that the industry and app ecosystem will expand. Many of the upcoming models, like the Oppo Find N unveiled in December, are anticipated to incorporate Samsung flexible screens in their designs.
In addition, Samsung is investing in artificial intelligence and augmented reality technologies, having committed to take the lead in the creation of the metaverse during its most recent earnings conference. Roh declined to comment on the specifics of such initiatives, but stated that the corporation is spending significantly.
"We could appear to be a lovely swan, but we're paddling frantically underwater," he explained.
