SAMSUNG ELECTRONIC KRW5000 SSNLF had a forgettable year in 2016, as it was forced to recall its flagship Galaxy Note 7 worldwide following incidences of fire hazard. Subsequently, the company halted production of the product. The South Korean company had pinned its hopes on this product to take on Apple Inc. AAPL's iPhone 7 and 7 Plus launched in September last.
Galaxy Note 7 Fiasco And Its Impact
The company's decision to pull the plug on its Galaxy Note 7 is seen to impact it severely, as it derives about 45 percent of its revenues from selling smartphones. A New York Times report quoting research firm Strategy Analytics said Samsung may have lost $10 billion due to the problems associated with the Galaxy Note 7. Apart from the tangible financial losses, the company is also facing an erosion of trust in its brands.
However, the decision to stop production is seen by many as a prudent move. At least, it saved the brand and prevented the meltdown of all the goodwill Samsung managed to build up over the years.
Samsung Quite Productive In Rolling Out Models In 2016
Notwithstanding the Galaxy Note 7 fiasco, Samsung apparently worked overtime in 2016 to bring out several models onto the market. Statista reported based on data from GSMArena and Gartner that Samsung led the pack in terms of the number of models launched in 2016.
In 2016, Samsung introduced 31 models, excluding the U.S. version of its flagship models. This compares to three for Apple, which ironically had the least number of models among the major smartphone makers.
Lenovo Group Limited (ADR) LNVGY stood second, with 26 models followed closely by ZTE CORP 'H'CNY1 ZTCOF, which had 24 models. Huawei Technologies Co., Ltd. Introduced 22 models compared to 19 by LG ELECTRONICS INC KRW5000 LGEAF.
Samsung Holds Fort Despite Setback
Did the superiority in terms of number of models introduced translate to higher market share for Samsung? Here is the answer.
IDC's estimates pitch the size of the smartphone market, globally, at 1.47 billion units for 2016, a record annual shipment number. This represented 2.3 percent growth from 2015.
Samsung saw its market share slip to 21.2 percent in 2016 from 22.3 percent in 2015. All the same, it held onto its No. 1 position. Shipments dipped 3 percent year-over-year to 311.4 million. Apple took the second spot, with a 14.6 percent share, down from 16.1 percent in 2015. The company experienced a 7 percent drop in shipments to 215.4 million.
The biggest gainers have been Huwaei, OPPO and vivo. Huawei's market share rose to 9.5 percent from 7.4 percent, OPPO's to 6.8 percent from 3 percent and vivo's to 5.3 percent from 2.6 percent.
One can argue that the number of models Samsung introduced to cater to buyers belonging to different income levels may have helped it weather its Galaxy Note 7-induced hit. With IDC predicting another growth year in 2017, thanks to the widely anticipated Apple's tenth anniversary iPhone model and the likelihood of the Middle East and Africa (MEA) and Latin America regions returning to growth, the competition is set to heat up in the smartphone arena.
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