South Korean smartphone maker Samsung’s strategy of focusing on premium mobile phones has led to a decline in its overall market share in 2024 in terms of the number of units sold, analysts said.
For two consecutive years, Samsung has prioritised selling high-end devices in a bid to compete with Apple. While this strategy has led to a rise in its revenues and profit margins, it has led to shrinking volume of shipments. This could be because premium phones cater to a smaller audience compared to mid-range or budget models, which sell in higher numbers, according to analysts.
Apart from the company’s increasing focus on premium segment, consumer preference for smartphone brands such as Vivo, Xiaomi, Nothing, and Motorola, etc, have also contributed to the fall in volume market share for Samsung. Analysts said consumers are giving preference to CMF (colour, material and finish) while choosing smartphones.
Data from market analyst firm IDC suggests that in 2024, Samsung’s market share in terms of volume fell to 13.2% from 17% in 2023 and 18% in 2022. The company’s smartphone shipments to retailers and distributors also fell 19.4% YoY.
In 2023, even as Samsung led the volume market share, its shipments fell 5% owing to stressed consumer demand.
“Samsung slipped to third, as its value-driven strategies led to a reduced position in lower price bands, impacting overall shipments,” said Shubham Singh, research analyst at Counterpoint.
According to Singh, Samsung’s premium devices, particularly its S series, continued to perform well, which helped the brand gain share in the premium segment.
As per Counterpoint data, Samsung’s volume market share in 2024 fell to 16% from 18% in 2023. The company’s market share, however, in value terms it rose to 22% last year from 21% in 2023, thereby positioning the company at second spot after Apple.
Analysts at Cybermedia Research (CMR) said, in the value-for-money smartphone segment (Rs 7,000-25,000), the company experienced a 27% YoY decline in the October-December quarter of 2024. This drop was largely due to intense competition, analysts said.
Currently, the below – Rs 20,000 segment, where Samsung is not focusing much, has a share of about 44% in the overall market. The entry-premium segment of above Rs 20,000 to Rs 35,000 has a share of 28%.
Faisal Kawoosa, chief analyst at Techarc said, “It seems Samsung only wants to up its play in the premium segment offering Galaxy AI and flagship foldable phones”.
According to Kawoosa, if the company wants to focus on mass segment it needs to give consumers a variety and improve the appearance of phones. In the absence of focusing on look and feel, the company could soon lose the remaining traction for its phones in the mass segment from consumers.
Among the key reasons for Samsung’s declining volume market share is also its reduced focus in the mainline (offline) segment. The mainline retailers, represented by the All India Mobile Retailers Association (AIMRA), has been raising concern that the brand is preferring online channels more with better discounts and stock availability.
“It is disappointing to see Samsung’s continued disregard for market hygiene and its failure to implement corrective measures (for mainline retailers) despite repeated commitments,” said Navneet Pathak, national joint general secretary of AIMRA, in a letter to Samsung.
According to Pathak, retailers are further disadvantaged by Samsung’s exclusive colour variants being directly offered through Samsung.com. This practice has forced pre-booked customers in retail to cancel their orders and purchase from Samsung’s platform, further eroding the confidence and viability of mainline retail channels, he said.
Analysts at IDC pointed that vivo surpassed Samsung to acquire the leadership position in 2024. The same was due to vivo’s consistent omnichannel play, diversified portfolio across price segments and channel support.