Samsung’s chief of mobile marketing, Kim Seok-pil, recently resigned due to health reasons at what many consider a critical time for the company. Mobile division struggles have resulted in the technology juggernaut announcing its plan to cut smartphone production by up to a third in 2015, leaving critics and fans alike asking, “What will become of Samsung?”
While still a powerful force in the mobile industry, Samsung isn’t doing very well in China, one of its key markets. The South Korean company is being eclipsed by main competitor Xiaomi, a company that has made a point of offering higher-end devices for budget-conscious prices. Additionally, Apple is offering smartphones with larger screens, namely the iPhone 6 and iPhone 6 Plus, something Samsung had previously cornered the market on. Fellow competitors Lenovo and Huawei are experiencing rises in product popularity as well. This rise in competition is merely one reason Samsung is cutting smartphone production.
At the end of October of 2014, Samsung reported its operating profits were the lowest they’ve been since 2011. They captured 28% of the mobile market share last year, compared to 32.5% in 2013. That number is expected to be around 26.6% this year.
Strained margins in marketing costs are harming the company as well. In the third quarter, Samsung generated 7% margins on smartphones, which is down 15% from previous years.
Despite these setbacks, Samsung is hoping to focus on a “core set” of devices in 2015, and is preparing to launch new products on March 1 at their Unpacked event in Barcelona, Spain, the site of the Mobile World Congress trade show. The company is expected to unveil its Galaxy S6 smartphone at this event, which is rumored to be a “curved” device. Samsung representatives note the tech giant is looking to “fundamentally reform” their product line.
Samsung also appointed Lee Sang-chul as their new mobile marketing chief. Sang-chul is the former head of the company’s Russian operations, and also reportedly served as the head of Samsung’s Latin American division.
With this appointment and the streamlining of company “offerings,” Samsung can reduce overall costs and improve production efficiency. The company is looking to use the same components in numerous products as another method of cutting costs.
It will be up to Sang-chul to promote the new Galaxy S among other Samsung devices, and save the company’s “troubled” mobile division. The new year will tell whether the mobile giant will bounce back to previous numbers or continue a gradual decline.
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