Samsung reveals its strategy to grow smartphone business in 2017
Samsung posted its full Q4 2016 earnings today. Despite taking a hit due to the Galaxy Note 7 recall, the company’s IT and Mobile Communications division posted an operating profit of 2.50 trillion won ($2.14 billion) on consolidated revenues of 23.61 trillion won for the final quarter of last year. It says that the fourth quarter saw higher market demand for smartphones and tablets due to the holiday season.
The mobile business did post an earnings increase year-over-year due to the continued stellar performance of the Galaxy S7 series as well as increased profitbility in the mid-range and low-end segments. Samsung expects slow growth in smartphone demand this year but also predicts that new services like Artificial Intelligence will be differentiating factors for the industry. No wonder it’s expected to introduce an AI-powered smart voice assistant called Bixby with the Galaxy S8.
Samsung says that it’s going to reinforce its market leadership and drive growth in the premium smartphone segment with differentiated design and innovative features. It’s also planning to improve the competitiveness of its mid-to-low end smartphones by adding features like fingerprint recognition and water/dust resistance. We’ve already seen this plan in action with the Galaxy A (2017) series.
The company will continue to shore up its software and service competencies by expanding Samsung and Samsung Pay to additional markets. Samsung also says that it’s going to be “introducing AI-based services on premium smartphones.” It adds that consumer safety and product quality will be the company’s top priority in 2017 and to ensure that it’s going to enhance product assurance processes and implement new preventive measures.
The company expects weak demand for smartphones and tablets in the first quarter due to seasonality but increased shipments of mid-range devices like the Galaxy A and Galaxy J series are expected to contribute to quarter-over-quarter sales growth. Increased expenses including higher marketing expenditure are likely to cause profit to decline slightly QoQ.