Will Samsung be able to withstand competition with Xiaomi?

Over the past couple of weeks, there have appeared several curious, and at first sight unrelated news about Samsung:

  • Samsung is preparing to release a smartphone on the Android Go Edition (version of the operating system for the most low-cost and low-power smartphones);
  • Samsung is losing (and will continue to fall) sales of the current flagship Galaxy S9 / S9 +;
  • Samsung opens a plant in India to produce low-cost smartphones and flagships.

Nevertheless, all three events have one possible and most logical explanation. The company is afraid of losing market share. And the main struggle for the world share is likely to develop in the Indian market, the prospects of which we have already mentioned many times.

In the world, smartphone sales are not growing. But there are some countries where the demand is huge and the potential market too. India, other developing countries in Asia, a number of countries in Latin America and Africa.

The battle for India Samsung recently lost to Xiaomi: the population here is poor, is interested in cheap equipment, and it has many alternatives. However, this does not mean that Samsung will not try to regain the first place. The strength of the brand is still preserved, the sales channels are the same. Therefore, the smartphone on the Android Go – this is a good trump card in the fight against the audacious Chinese competitor, who plays in the low segment.

That sales of flagships are less than forecasts are not a big trouble for Samsung. As Mashable writes, this is still a big figure – this time. As we have already said, this does not undermine the business of the company, which basically earns on components – it’s two. And the slowdown in sales of flagship devices is happening in Apple too – this is three. The reason for the latter is simple – the life cycle and the price of a top-end smartphone are growing, buyers do not see the point of updating or updating on the models of previous generations, they will still become obsolete soon, given that interesting and tangible technological breakthroughs do not occur.

The top segment is the most interesting for manufacturers. There’s the biggest margin. Inexpensive models help in capturing the market share, although Samsung is well-sold and flagships. But if the upper segment will take place, on average, the same Xiaomi, Honor and other Chinese brands are already very good positions, then rely only on state employees who are in demand in developing countries.

At one time, Samsung lost the Chinese market – there is about 1% of the company, although even such a small fraction of the big pie is not bad.

Obviously, the Korean giant does not want to repeat the story in India, which becomes more attractive day by day, and dive from the top to the bottom.

India, in turn, stimulates domestic production, for this purpose duties on the import of components and devices are raised. Xiaomi for the sake of reducing the cost of devices in this market opened its factory here.

Samsung will also be able to reduce the cost of its inexpensive smartphones thanks to the plant (flagships, incidentally, too, their company will also produce at the new plant). And for a price-sensitive Indian audience, every penny is very important. This will be the largest production in the world, where 120 million models will be assembled annually.

Also, to become even more attractive to insolvent buyers, the company will launch smartphones on the Android Go market and thus be able to compete for a share in this market with other vendors that manufacture smartphones on this OS. And with the devices on KaiOS.

Loss in the Indian market with a high probability will lead to the loss of the first place in world sales.

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