Sam­sung bets on 5G to re­cap­ture China mar­ket

The Korea Times - - FRONT PAGE - By Jun Ji-hye [email protected]­re­atimes.co.kr

Sam­sung Elec­tron­ics is seek­ing to cap­i­tal­ize on China’s in­tro­duc­tion of fifth-gen­er­a­tion (5G) net­works to boost its smart­phone mar­ket share there, which has fallen to be­low 1 per­cent, com­pany of­fi­cials said Sun­day.

The tech gi­ant opened a flag­ship store in Shang­hai’s fa­mous pedes­trian shop­ping street, East Nan­jing Road, Oct. 18, which houses the firm’s lat­est smart­phones, tablet PCs and smart watches. The 800-square me­ter store is the largest Sam­sung store in China.

The open­ing came days be­fore China launched com­mer­cial 5G ser­vices in ma­jor cities such as Bei­jing, Shang­hai and Guangzhou, Fri­day, with the coun­try plan­ning to ex­pand the net­work to more than 50 cities by the end of the year.

Op­er­at­ing the largest store on one of the busiest streets in China is part of Sam­sung’s ag­gres­sive mar­ket­ing strat­egy, as the 5G mar­ket there is ex­pected to grow rapidly.

“The num­ber of cus­tomers who subscribe to the wire­less ser­vices of China’s three tele­com com­pa­nies has reached 1.2 bil­lion, 24 times more than Korean sub­scribers,” Yuanta Se­cu­ri­ties Korea an­a­lyst Choi Nam-gon said. “But the com­pa­nies suf­fered a de­crease in their av­er­age an­nual growth rates amid in­ten­si­fy­ing com­pe­ti­tion and gov­ern­ment reg­u­la­tions be­tween 2014 and 2018. This means that they now face a grow­ing need to of­fer 5G ser­vices.”

The cir­cum­stances will also be a fit­ting op­por­tu­nity for Sam­sung to re­store its fall­ing mar­ket share in the Chi­nese smart­phone mar­ket as the com­pany is one of the few man­u­fac­tur­ers in the world that sell prod­ucts that can op­er­ate on 5G net­works.

Its smart­phone busi­ness in China had flour­ished un­til around 2013 with about a 20 per­cent mar­ket share. But the share has dropped sharply re­cently due to the rise of Chi­nese man­u­fac­tur­ers Huawei and Xiaomi.

Ac­cord­ing to mar­ket tracker Strat­egy

An­a­lyt­ics, Sam­sung had only 0.7 per­cent share of China’s smart­phone mar­ket in the sec­ond quar­ter of the year.

From Sam­sung’s point of view, China’s in­tro­duc­tion of 5G ser­vices is a de­ci­sive chance to dom­i­nate the 5G mar­ket there and raise its share to dou­ble fig­ures be­cause Ap­ple’s new iPhone 11 lineup are all fourth-gen­er­a­tion, or LTE (longterm evo­lu­tion), mod­els that can­not use 5G.

“The open­ing of our largest flag­ship store re­flects our de­ter­mi­na­tion to en­hance our pres­ence in China’s 5G mar­ket,” a Sam­sung Elec­tron­ics of­fi­cial said. “We also plan to in­crease the num­ber of stores in other cities.”

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