Analysis: Samsung's smartphone ambitions

Analysis: Samsung's smartphone ambitions
Samsung has HTC in its sights, with a plan to storm the smartphone sector in 2010.

The manufacturer has launched a major assault on the smartphone market this year with a plan to triple its smartphone shipments to more than 18 million units. This would increase its global market share from 3% to around 10%.

If it succeeds, Samsung will knock HTC off its perch and grab the fourth largest slice of the smartphone market behind Nokia, RIM and Apple.

It's a bold move that could unsettle the other smartphone players.

Neil Mawston, wireless device strategies director at Strategy Analytics, says: 'Samsung has a track record for delivering on tough targets. It out performed its objectives last year for touch-phones and messenger devices, and its key area for growth this year is smartphones.

'Like other Korean brands, Samsung is pretty ambitious and will pursue its goal to grow its smartphone share aggressively.'

Samsung has recognised that the smartphone market is not just about hardware. Shin Jong-Kyun, head of Samsung's mobile division, said earlier this year: 'There'll be a big change in our smartphone strategy in 2010. We plan to strengthen our smartphone business this year by improving hardware offerings and also beefing up content, applications and services.'

With this in mind, it will aggressively promote Bada - its own open smartphone platform. Tim Shepherd, analyst at Canalys, says: 'The big news for Samsung this year is its Bada platform. This is quite a significant move from Samsung, positioning it strongly as a platform. It will push that very hard, expanding it into a much wider area.'

Bada has received little attention from handset vendors and developers since being launched late last year. But this will change with the launch of its first Bada-enabled phone with full apps support - the Samsung Wave GT-S8500 - at Mobile World Congress (see below).

Samsung wants to democratise smartphones. The company's slogan for 2010 says it all: 'Smartphones for everyone.'

Young-hee Lee, VP of Samsung Mobile's marketing group, tells Mobile: 'Samsung's goal in 2010 is to widen the ownership of smartphones by releasing a range of devices that will appeal down the value chain.'

The 40 Samsung smartphones expected this year will display a range of prices, with Bada-enabled phones featuring heavily.

Lee says: 'Bada will help bring our smartphone range to price points our rivals can't match.'

This will be backed up by its cross platform Samsung app store, which it is making available in 50 countries.

The manufacturer is putting its marketing power behind its smartphone campaign. In the UK, the Wave smartphone will be available on contract through all operators and retailers and will be backed by Samsung's biggest ever UK marketing spend.

Samsung UK' s sales team will also swing into action under the leadership of its new sales director, Simon Stanford. In preparation for this year's push into smartphones, the company is running an extensive recruitment drive for its mobile division.

Samsung insists its push for Bada does not mean it plans to drop other platforms. Currently, Samsung supports Symbian, Windows Mobile and Android on its smartphones.

'We will continue to be a multi-platform supporter,' says Lee, pointing to the launch of Samsung's first Android-powered smartphone in the domestic market as evidence of its commitment to other platforms.

Analysts believe a multi-platform approach is essential if Samsung wants to capture market share. Shepherd says: 'Samsung won't abandon other platforms but it will mainly push Bada.

'However, with the current momentum in the market with Android we can expect to see some Android devices and cheaper versions from Samsung.'

So can the manufacturer achieve its 2010 smartphone targets? Analysts don't doubt Samsung has the will to succeed. Shepherd says: 'Samsung will look to Bada and Android to drive the smartphone down into its portfolio this year.

'It will continue to expand its portfolio and be very aggressive in terms of marketing and advertising activity. It will not let up in its key markets and will be very competitive in terms of price points. In addition, we can expect to see some compelling devices.'

However, it will be no mean feat. Samsung will meet some tough opposition from rivals that have played the smartphone market for longer, warns Mawston. He adds: 'It will not be an easy ride. They are facing well established competition that is very strong. RIM, Nokia, HTC and Motorola are all well established whereas Samsung is a late entrant and a minor player.'

Samsung will have an even harder fight on its hands in Western Europe this year, Mawston predicts.

He explains: 'Most of Samsung's gains in Western Europe last year were against a weakened Sony Ericsson and Motorola. That was like taking sweets from a baby. That easy share has come to an end and Samsung will have to fight harder this year.'

In its favour, Mawston says Samsung's extensive distribution network and good operator relations will ease the way, particularly helping it challenge smaller players such as HTC.

The manufacturer also has the combined force of the Samsung Group behind it to give it added impetus, highlights Shepherd.

He explains: 'Samsung has a wider corporation that can leverage capability, especially in design and technology - it has a huge breadth of expertise in the wider group and we will see that strongly used.'

Again, that added muscle will be bad news for HTC, but Samsung must not underestimate it as a contender.

'HTC is very focused,' says Shepherd. 'Its focus has shifted quite tangibly to Android, and its deal with Google to produce the Nexus One was a coup and a wise move. If HTC makes a lot of Android phones in 2010 and expands its platform; it could have a good year.'

The fight is on.

The Samsung Wave

The Samsung Wave GT-S8500 is the manufacturer's flagship high-end device for the first half of 2010.

Launched at the Mobile World Congress, it is the first of a number of Bada smartphones that Samsung plans to release this year.

The manufacturer has plans for a variety of handsets from high and low-end customer tiers, providing a full range of phones and price points.

Samsung has priced the Wave competitively at around £280, placing it significantly below many rival high-end devices. The Wave is the first Bada-enabled device with full apps support. It will be available from April in the UK on contract.
Written by Mobile Today
Mobile Today


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