Samsung keeps profits first in overhauled smartphone strategy

Samsung is overhauling its smartphone strategy as it seeks to remain competitive in this tough market and plug declining profits. A Samsung Electronics executive cited in a report out of Korea says that the company has been looking for growth in terms of shipments for years, and now it’s preparing for the “post-smartphone era” which is why Samsung’s handset division is now focusing on profitability as a priority over growth.

The executive was quick to point out that this doesn’t mean Samsung is going to let its rivals take over the top spot in favor of more profits. It plans on keeping the company-set share according to markets and maintain shipment target of around 400 million units. The executive also said that Samsung will launch promotional campaigns for its mobile devices if it has to but “the company will be unlikely to initiate cash-intensive promotions to clear inventory and increase market share.” It’s expected that this change in strategy could improve the mobile division’s profit margin up to 17 percent during the second quarter as opposed to 15.8 percent from the previous quarter. One of the big reasons why Samsung is making this strategy change is described by the executive as the onslaught of budget Chinese smartphones as well as lukewarm consumer response to “fancy features” in expensive handsets.