For Samsung, the immediate Chinese market is a ' hot potato '.
With sales plummeting and labor costs rising, it has been reported that Samsung Electronics will probably stop the mobile phone production of Tianjin Samsung Communications Technology Co., Ltd. this year. Samsung Electronics says it has yet to make any decision on the fate of the factory in Tianjin. The company said in a statement: ' The overall smartphone market is facing difficulties due to slowing growth. Samsung Electronics Tianjin Telecom Enterprises will be committed to improve competitiveness and efficiency of the activities.
"and Samsung Electronics in China 13th to the first financial reporter, ' never heard of the relevant information '. Just five years ago, Samsung Electronics had a share of 20% in the Chinese market, but its share in the Chinese market has fallen to 1% this year.
A director of the consultancy told reporters that the current Samsung smartphone in China one months of sales in the Chinese market is about 500,000, May and June, respectively, 1.2% and 1.1% market share. Samsung's decline in the Chinese market is largely a result of strategic missteps, premature cuts in low-end product lines and product development failures, which have brought catch-up opportunities to domestic handset makers. Immediately after the channel also appeared the problem, the price of the virtual high caused the market around the serious fleeing goods, the internal management errors.
' said the official to reporters. Huang Yu 琁, a state consulting and research manager, told reporters that the rapid rise of Chinese brands, both in the Chinese market and in emerging regions, has affected Samsung's performance.
"The volume of Samsung's production this year will be nearly 10% from last year's recession," the state-gathering consultancy said.
Sales decline factory production pressure Samsung, like other handset makers, is facing the pressure of a sharp slowdown in smartphone sales.
The company's quarterly earnings were the lowest in more than a year as rivals rolled out cheaper, feature-rich smartphones.
Strategyanalytics data showed that global smartphone shipments dropped from 360.4 million in 2017 Q2 to 350.4 million in 2018 Q2, down 3% per cent year-on-year. Strategyanalytics executive Director Neilmawston said, ' Samsung's global smartphone shipments fell from 79.5 million in 2017 Q2 to 2018 Q2 71.5 million, down 10% year-on-year. This is Samsung's worst quarterly performance since the 2016 Q3. Samsung's major Asian markets, such as China and India, are being squeezed out by Chinese rivals such as Millet and Huawei.
Huawei's global smartphone shipments surged from 38.4 million Q2 in 2017 to a record 54.2 million Q2 in 2018, up 41% per cent year-on-year.
In the Chinese market, Samsung's market share over the past few years has experienced a ' Waterloo '. Samsung defeated Nokia in the global market in 2012 to win the global handset market share first position, after the Nokia occupied this position for 14 years;
Samsung won nearly 20% of its market share in China's mobile phone market in 2013, its peak in the Chinese handset market. But after the ' Note7 mobile phone bombing ', Samsung's market share has slipped in China.
Connaught, the head of the advisory to reporters, not only because of the "explosion gate" incident, Samsung's Chinese market is mainly a strategic error, in the high-end market too radical to surpass Apple, prematurely cut the low-end product line, this time left to other competitors opportunities. Huang Yu 琁 that Samsung, based on cost considerations and tariffs and other restrictions (shutting down factories), could boost sales by increasing the proportion of production in India and Vietnam in the future.
Last month, Samsung opened a self-proclaimed world's largest smartphone factory near the Indian capital of New Delhi.
Mobile phone business ' fade ' Samsung Electronics released its second-quarter earnings recently. Samsung's electronics operating profit was 14.8 trillion won (about 13.2 billion U.S. dollars) in the second quarter, up 1.7% from Apple, the first to overtake Apple for the first time in its second-quarter earnings, according to earnings figures.
But Samsung, for the first time, has seen a warning sign of falling profits. Samsung's earnings figures showed that the company's revenues were 58.48 trillion won (about 52.3 billion U.S. dollars) in the second quarter ended June 30, 2018, down 4.13% per cent year-on-year. Net profit was 11.04 trillion won (about 9.8 billion US dollars), down 0.09% from the 11.05 trillion won in the same period last year.
It also means that Samsung Electronics ended 6 consecutive quarters of rising profits. Mobile phone business has become one of the "drag-and-drag" businesses in Samsung Electronics. Samsung's mobile division, which accounts for Two-thirds of the company's revenues, helped Samsung revenue grow 52% from last year to 6.28 trillion won (5.6 billion US dollars), but its revenues fell 3.5% from the previous quarter and operating profit to 2.67 trillion won, down 34% from a year earlier. Samsung's explanation for this is a slowdown in user demand and a diversification of the mobile market, particularly Samsung's flagship machine, which sold badly in the second quarter, and has seen a serious unsalable.
And Samsung also said that the situation should only become worse, because many manufacturers will launch the second half of the new products and their competition, they hope to be able to save the situation through the new GalaxyNote9 in early August.
But in the opinion of analysts, the reversal of the Chinese market is not easy. ' Chinese brands in recent years have been actively engaged in the development of intelligent mobile phones, creating brand value, the level of products has been not the same. The decline of Samsung sales in China is mainly influenced by the rapid rise of Chinese brands and the price competition pressure to reduce the prices of terminals.
Huang Yu 琁 to the reporter, to the specification, this year Samsung's two flagship new machine Galexys series as well as the note series in the mobile phone style to optimize the existing design-oriented, lack of innovative themes to attract high-end market crowd, mainly to the J series, such as supporting sales performance. Market Share Plunge | Samsung's China | Mistakes