The Delusional Korean Tech Press Continue to believe that Samsung has a Magic Bullet to end their Woes in China
In one Korean tech report posted today they wrote: "Samsung Electronics' share of the Chinese smartphone market will drop to below 2 percent in the fourth quarter. According to a new analytical report released last week by a US research firm, Samsung ranked ninth in the world's largest smartphone market, with a 2 percent share in the third quarter. This share is predicted to further drop to 1.6 percent in the fourth quarter.
Samsung, once the dominant player in China with a share of around 20 percent, has gradually seen its market share fall with the rise of local alternatives including Huawei, Xiaomi, Oppo and Vivo. The combined share of the four companies stood at 66 percent during the third quarter, though the figure is predicted to decline to 57.3 percent in the fourth quarter due to Apple's upcoming iPhone X."
Lee Byung-tae, a professor at KAIST College of Business told the Korea Herald that "It seems almost impossible for Samsung to upend the Chinese smartphone market reorganized by local firms with quality products and affordable prices."
To better understand the professor's commentary, Patently Apple posted a report on November 1st titled "In Q3 Apple Competed in the Top Three Price Bands in China and was Number One in Smartphones over $500." The report presented a chart of distinct price bands in the Chinese market and the players that are dominant in each.
As you could see in the chart above, Apple is now actively participating in the top three price bands in China and taking top spot in the premium band. Apple is likely to extend their reach in 2018 into four bands if the company continues to follow the Cook Doctrine.
In this same chart you're able to clearly see that Samsung's top S8 (or Note 8) was number three in the premium band where Huawei is now the competitor chasing Apple's prized iPhone success. After that, Samsung shockingly got wiped out in the other five categories. It's a jaw dropping reality for Samsung who dominated all tiers just a few years ago except the top premium band where they were second to Apple.
The trend is about to get darker for Samsung as the very Chinese smartphone vendors who have wiped Samsung off their perch in China are now gunning for Samsung in India.
The Korea Herald added: "Since successful Chinese firms are expanding their presence in budget smartphone markets, including India, Samsung and LG's global presence will shrink further unless they secure competitiveness against Chinese firms."
How could they "secure competitiveness against Chinese firms," in respect to smartphones? Change the game. Samsung's shift to the phablet allowed them to gain traction against Apple until that house of cards collapsed in 2014 when Apple's iPhone 6 Plus mania hit the global stage and removed the one advantage that they held against Apple.
Some Samsung loyalists in the media are convinced that Samsung is now preparing to change the smartphone game again with a series of next-gen form factors that will begin with foldable smartphones and possibly more elaborate dual display designs. Samsung's Display division is an advantage for Samsung who owns the rights to supply Apple with OLED displays for two years.
Patently Mobile, our non-Apple IP blog, shows Samsung's work on these next-gen form factors in a special archive as being quite extensive. One of our last reports on Samsung possibly delivering a foldable smartphone was posted on September 28th titled "Samsung's Smoke and Mirror Show is pumping up a Foldable Smartphone for 2018."
About a year ago we also reported that LG was possibly working with Apple, Google and/or Microsoft for a foldable smartphone in 2018 and last month we posted a follow-up report on this titled "A New Rumor Surfaces in South Korea claiming that Apple and LG are Collaborating on a future Foldable iPhone."
So the the leaders in Silicon Valley are well aware that this could be a future trend as the display technology and manufacturing capabilities continue to improve supporting such new form factors. Yet it's Samsung that desperately needs to take a hammer to the market and shock it with new exciting foldable and/or bendable form factors first.
The Korea Times this morning is trying to pump up the volume again on this topic of a foldable smartphone as the negative news continues to mount against their local hero. The report states: "The smartphone industry is expected to undergo a drastic shift in designs and functionalities next year, with global handset vendors competing to be the first to introduce foldable mobile devices.
The world's leading display and smartphone manufacturers such as Samsung and LG have unveiled their 'foldable' display prototypes in recent years, hinting at their plans to equip their new mobile devices with the next-generation displays.
Ever since Apple opened the smartphone era in 2007, no outstanding and game-changing shift has taken place in the global mobile phone industry. Even if industry leaders have since made all-out efforts to add innovative and eye-catching functions in areas such as security and display size, they did not come with huge surprises compared to the arrival of the smartphone.
But things will likely change next year after a group of smartphone manufacturers made public their plans to unveil new bendable or foldable handsets.
The foldable hype comes with the rise of the organic light-emitting-diode (OLED) display as a new norm for premium smartphones. The OLED display uses self-lighting pixels, making displays foldable and even bendable.
Now with Apple joining the OLED bandwagon this year, the iPhone maker is rumored to have asked LG Display if it can develop foldable OLED panels by 2020."
As you can see, the rumor has now shifted from 2018 to 2020 knowing full well that Apple has no such product on their road map for next year.
The Korea Times report continued with an industry source telling them that, "Bendable displays are still in the development stage for the world's leading display manufacturers, as they have yet to overcome technological barriers in areas such as its durability.
The bendable type is a totally new concept in the smartphone industry. The key to its success lies partly in how to design and place the display safely with other components of smartphones such as the battery and circuit boards."
In a recent September report we covered Samsung's mobile division chief Koh Dong-jin being interviewed wherein he stated: "Samsung has the foldable smartphone in its road map for the Note series and is currently working to solve a series of hurdles before unveiling it next year." Yet later that month another Samsung executive back tracked and told ETNews that "although Samsung Electronics is in a process of preparing for release of foldable Smartphones, it is still in a development stage of foldable Smartphones."
Samsung is clearly under pressure to do something dramatic to change the smartphone market in its favor with a unique new design that no Chinese vendor will be able to copy quickly. Yet because of the Note 7 fire recall that drove the company into a death spiral in China, Samsung's management have become hesitant to take big gambles in the smartphone market.
Now with China's ZTE delivering a foldable phone into the market first, the Chinese are laughing at Samsung and sending them a clear message that their dream of beating Chinese vendors with foldable smartphones may be greatly exaggerated.
In the end and contrary to the Korean press pumping up the volume for Samsung's future foldable smartphone being the breakthrough that will turn things around for them in China, the reality is that Samsung will need a miracle to turn things around for them in that market. The foldable smartphone is highly unlikely to be Samsung's magic bullet to end their woes in China, even if their local press is in denial.
It's a real catch-22 for Samsung. If they unveil a breakthrough smartphone design that gives them an edge but it backfires for any reason, they'll be toast in China and their reputation ruined.
On the other hand if they're too late to the party, it will do nothing for them in terms of a turnaround.
There's no wiggle room for Samsung. They have to thread this needle perfectly – and with their leader in jail, their top executive leaving and confidence waning in Samsung's executive ranks, do they have what it takes to deliver a knock out foldable smartphone in 2018? While only time will tell, the clock is ticking and it's not in Samsung's favor.
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