The world’s largest phone company Samsung could strengthen its lead with its latest smartphone releases, including its second foldable device.
Samsung is targeting growth by differentiating its premium smartphones and introducing new designs for foldable products
Samsung hopes to improve its first-quarter sales with new smartphone releases following the 39.7% year-on-year decline experienced in Q1 2019.
On Tuesday 11th February, Samsung launched its new flagship series of smartphones, including the Samsung Galaxy S20, S20+ and S20 Ultra. The Galaxy Z Flip – Samsung’s second foldable smartphone was also announced.
The early release by Samsung allows the company to gain an immediate market lead for the 2020 financial year. Huawei’s P40 is not expected until March, with Apple’s next iPhone anticipated for release in September.
Samsung’s unique foldable phone – The Galaxy Z Flip – has the potential to boost sales volumes with little competition from alternative foldable phones on the global market. Huawei released its own folding phone, the Mate X, in February 2019 but availability is limited to China.
Smartphone demand will be driven by 5G devices in 2020, which Samsung can capitalize on
Samsung leads the 5G smartphone market. The No. 1 smartphone company shipped more than 6.7 million Galaxy 5G Devices in 2019 and established a 53.9% share in the global 5G smartphone market as of November 2019.
5G smartphones contributed to 1% of global smartphone sales in 2019. This year is expected to be the breakout year; Samsung expects 18% of the total global smartphone sales volumes to be 5G. As the smartphone market matures, consumers are holding onto their phones for longer periods of time. 5G networks are becoming increasingly accessible worldwide. Prioritizing the development of smartphones with 5G capabilities will be crucial for Samsung to achieve growth in 2020. The Samsung Galaxy S20 range will all offer 5G options and help increase sales of new devices as 5G handsets are expected to revive the demand for new smartphone devices. However, the Galaxy Z Flip will only be available as a 4G phone which could impact sales volumes.
Biggest rival Huawei faces multiple headwinds in 2020
Samsung’s closest rival, Huawei, has become an increasingly significant threat to Samsung’s smartphone sales. The Chinese technology company achieved an 18% increase in revenue in 2019 to $121.72bn. In comparison, Samsung’s revenue increased by 6.15%.
However, the company forecasts difficult growth conditions in 2020. Firstly, many international markets have remained sceptical over the organizations 5G commercial contracts. Australia, Japan and the US are among key markets banning Huawei from their 5G networks. The ongoing coronavirus pandemic has also caused unexpected disruption to the Chinese retail sector. Manufacturing has slowed throughout the country and could delay the deployment of China’s 5G rollout.
Samsung should capitalize on Huawei’s setbacks to strengthen its lead in the global smartphone market.
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