As the leading smartphone vendor globally, Samsung obviously has a lot of competition. Chinese smartphone companies in particular have been trying to steal the company's market share. They have been pulling out all the stops to try and beat Samsung at its own game.
It's not just about the numbers, though. It's also about stealing the spotlight, something Samsung knows a thing or two about. The company significantly increased its marketing efforts to elevate its brand value. It took Apple head-on with ads that were daring and sometimes even controversial.
For example, Samsung's brilliantly executed “Next Big Thing” ad campaign drove Apple crazy. Its marketing head Phil Schiller asked his team in an email “Has Apple lost its cool to Samsung,” and that “we have a lot of work to do to turn this around.” The company reportedly even considering switching its ad agencies to mount an effective response to Samsung's marketing blitz.
Samsung now finds itself in a completely different league. With Apple basically giving up on innovation and Samsung leading the foldable revolution, its greatest threat now comes from the companies that are going after its bread and butter.
The mid-range and entry-level smartphones are some of the best-selling Samsung phones. They're also what keep Samsung at the very top of the global smartphone suppliers list. Chinese OEMs like Xiaomi, Oppo, Vivo, etc have been aggressively targeting this segment in a bid to turn the tables.
There was a time that Samsung's lead did seem to be in trouble. Huawei was rapidly gaining market share in key regions. It was even close to officially launching smartphones in the US, a major market that had always been off-limits to it. Things unravelled quickly for Huawei after it landed in hot water with the US government and nothing has been the same for its smartphone division ever since.
Huawei's downfall gave these other Chinese OEMs hope that perhaps they might be able to go after Samsung with the same ferocity. That hasn't really worked out for them, though. For the most part, these companies are competing against each other, rather than causing a headache for Samsung.
One of the ways most Chinese OEMs are approaching this is by launching devices that are very competitively priced and often by making superfluous claims about features. Charging speed claims are a favorite. We already have a great video explaining why these charging speed claims should be taken with a grain of salt.
These companies can't really grow at the scale to target Samsung if they're just cannibalizing each other's market share. They do continue to find growth opportunities in some markets but the significant leap remains elusive. There are a few reasons behind this.
Due to geopolitics, the general anti-China sentiment in the West and the fallout for Chinese OEMs from the Huawei debacle, the opportunities are simply not there anymore. The USA, one of the most lucrative smartphone markets remains, remains effectively off-limits. Samsung doesn't have that limitation.
There's also the fact that the specs arms race has cooled. There's a lot more that goes into a decision about which phone to buy these days than just the gigahertz, gigabyte and megapixel numbers. The economic uncertainty stemming from the pandemic has made people hold on to their phones for longer and mostly buy items that give them the best bang for the buck.
More than ever before the brand reputation, community and support that an OEM is able to provide acts as a major consideration for customers. Samsung offers all three and no Chinese OEM can even match that.
That's one of the reasons why Samsung doesn't need to worry about these OEMs too much. It must keep an eye on the competition for sure since the Chinese OEMs always have a trick up their sleeve.
For a long time, there has been a perception that perhaps some of these companies receive state support. That's why they're able to price these phones so aggressively because they're effectively being subsidised.
That might help win market share but the relatively weaker after sales support compared to Samsung would mean that sustaining the market share will always be a challenge.
While that may or may not be the case, the guidance for customers is clear. Don't just buy a phone because it's the cheapest of them all. Buy one that's competitively priced and also comes with the promise of great after-sales support and a dedicated community. If it's backed by a community like SamMobile, even better!
