Using innovative products and schemes, the Korean giant is charting a vigorous course here.
Worldwide, in the third quarter of 2011, Samsung's total smartphone sales increased an estimated 48.7 per cent (quarter on quarter) to 29 million units, far higher than even Apple's 17 million units during the period.
Switch to the Indian market for the period. The Korean manufacturer's growing influence here has been undeniable. Data from market research firm GfK suggest Samsung cornered a 29.3 per cent value share in the smartphone market.
Although still number two in the Indian handset market, analysts believe Samsung has done well, with smartphones like the Galaxy SII. Rahul Gupta, senior manager at Strategy Analytics' global wireless practice, said, "Nokia has a 35 per cent handset market share, followed by Samsung at 15 per cent. While the gap is significant enough not to be overcome anytime soon, Samsung's Galaxy SII is possibly the only Apple competitor in the market. It is, thus, in a much better position than Nokia."
For the quarter of July-September, IDC data claims Nokia had 31.8 per cent of mobile phones shipment share, followed by Samsung at 17.5 per cent. In the smartphones segment, Nokia still led with a shipment share of 35.3 per cent, while Samsung's came close at 26.
India accounts for 12 per cent of worldwide sales. It is an important market for device manufacturers such as Samsung, Nokia and Research in Motion. Detailed planning of inventory and channel training has helped Samsung expand distribution, thereby reaching 70,000 outlets in 2011 as against 50,000 outlets in 2010. Ranjit Yadav, head of the Samsung mobile and technology division in India, said, "Over the last year, we have systematically strengthened the distributor infrastructure in tier-1 markets. Similarly, in tier-2 markets, we have 100-125 channel partners and the effort is to increase awareness regarding the opportunity to build a profitable business with Samsung products. In tier-3 markets, we have deployed resources to engage retail, resellers and system integrators."
Samsung has also actively promoted performance-based incentive schemes for channel partners. Yadav credits Samsung's rise in 2011 to factors such as ability to manage right inventory levels, active partner training and channel certification, rewards and recognition programmes.
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Additionally, devices like the Galaxy series worked wonders for the brand. "Samsung's Galaxy S and Galaxy SII smartphones achieved a combined total of over 30 million global sales. Galaxy SII, in fact, set a new record for Samsung, generating more than 10 million sales - quicker than any device in Samsung's history," claimed Yadav.
What also helped Samsung in India was that this year, Nokia and BlackBerry could not deliver any cutting-edge smartphones within the same price range to compete with the Galaxy series.
Ahead
With smartphone sales (Gartner estimates) said to comprise six per cent of total device sales in the first three quarters of 2011, and expected to increase to eight per cent in 2012, Samsung, like the others, is keen to build a formidable smartphone portfolio.
According to Strategy Analytics projections, the bulk of new mobile users in India over the next five years will be low-income consumers, particularly in rural areas. "Affordable mobile phones with an appealing set of features will be the key to succeed in this market," says Gupta. That's where Samsung is yet to make a dent, though it has about 20 models available in the sub-Rs 5000 segment. Gupta acknowledged Nokia's recent success in the lower-end dual-SIM handset market and its continued dominance in the entry-level feature phone segment.
On Samsung's spotlight in 2012, Yadav said, "We will continue to drive the smartphone era in India next year. That will remain a key focus area for us." The company is hoping to end 2011 on a high, with its recently launched hybrid category that blurs boundaries between tablet PC and a smartphone. Yadav said, "Galaxy Note represents a unique product category and is one of Samsung's flagship launches in the second half of the year. We plan to continue this momentum next year, too, with a stronger thrust on innovation. Converged devices will be a top priority for us next year as well."
Enterprise business
The corporate business (B2B) accounts for less than five per cent of total revenue for Samsung. "But a focused approach in this segment has helped the brand position itself strongly among corporates and businesses," says Yadav.
In India, Samsung has unveiled its 'smart solutions' for the education segment. This includes display solutions and customised applications on its Galaxy Tabs, that promise to make the classroom experience more interactive and smarter. Samsung is targeting 20,000-plus education institutes in India. Under the 'Smart Teacher' initiative, it is providing education institutes with Galaxy Tabs to maintain course curriculum, plan attendance and access school intranet for content. Under a 'Smart Student' programme, it provides Galaxy Tabs to students for accessing course content and digital content over the school intranet.
On the enterprise segment, Samsung India is seeing tablets becoming a part of mobility solutions, says Yadav. It has already executed a sales-force automation project for Hindustan Unilever, wherein a large number of tablet PCs and smartphones were deployed, loaded with the enterprise solution.
The company is also in advanced stages of developing and deploying medical applications on its Galaxy Tab and is working with insurance companies, too.