Samsung Electronics admitted that it erred in its strategy of smartphones and vowed on Thursday to overhaul its lineup of handsets after its profit from those units tumbled during the last quarter and sits at its lowest in over 3 years.
Over the past three years, Samsung has climbed to the top of the ladder in smartphone market share. The company has responded well to the demands of the market and tailored its handset to the users’ needs and those of worldwide mobile carriers.
However, its rapid ascent to the top with a product that was pioneered by Apple its rival, is being followed by a stunning reversal of fortune that is equally amazing.
Earnings from the mobile phone part of Samsung started to decline earlier in the year, undermined through the mediocre sales of its Galaxy S5 line of smartphone and the onslaught of competition from less expensive brands in India and China.
Apple has also eroded the leading market share for Samsung in developed nations.
In what is a hugely rare acknowledgement, Samsung admitted a misstep, during an earnings call saying they lagged behind the quickly changing market.
Robert Yi on executive at Samsung said the response by the company was not fast enough.
The company is planning to make significant changes to its strategy for smartphones for 2015 seeking more efficiency, which implies the amount of new models of handsets will likely be reduced.
By doing this, said company officials, they will have additional time to focus better on each of its products and purchase components at less expensive prices to save more cost.
Unlike the approach by Apple of take or leave it, Samsung boasted that it allow consumers to have more choices, launching at a minimum two models that were flagship each year and making their smartphones in many screen sizes and with various features.
The fall in earnings from its mobile business pummeled the company’s net profit for the quarter, which fell 49% to $4 billion. That amount was the lowest profit since the 2012 first quarter.
Operating income from the mobile handset business was $1.66 billion.