Samsung calls in experts to halt flagging numbers

A visitor holds a new Samsung Galaxy Note 4 smartphone after its presentation at the Unpacked 2014 Episode 2 event ahead of the IFA Electronics show in Berlin, Sept 3, 2014. [Photo/Agencies]

Analysts expect electronics giant to lose China top spot early in 2015

Samsung Group, the South Korean electronics giant, plans to send more than 120 company experts to China in 2015 to stimulate its flagging smartphone business in the world's top consumer electronics market, according to media reports.

The company's operations in China are controlled by its key affiliate Samsung Electronics Co, but South Korean newspaper The Chosunilbo has reported that analysts consider it is now only matter of time before it loses its crown as the country's No 1 smartphone vendor.

The report said the experts being assigned over the coming year will be tasked with helping Samsung fight off local competition.

The company's expert assignment program was launched in the 1990s, aimed at both China and other emerging markets, in which key staff are placed in strategically important markets for one or two years.

The company's smartphone market share in China shrank dramatically in 2014, with the main competition coming from Xiaomi Corp and Lenovo Group Ltd. At least five other smaller local vendors are also catching up fast.

Beijing-based research firm Analysys International has predicted that Xiaomi, considered as producing more affordable smartphones than Samsung, is on track to overtake the South Korean producer in quarterly shipments by early next year.

Wang Jingwen, an analyst at Shanghai-based consultancy Canalys China, also thinks that as local vendors gain momentum, the competition against overseas giants in general will intensify.

"Overseas vendors like Samsung must react quickly to adapt to the changes in the market or they will find it difficult to maintain current market share," she said, adding the overall slowdown in smartphone sales growth will add further competition.

Tian Zheng, an Analysys researcher, said that with more Chinese Internet companies showing an interest in making smartphones, the big brands have become fully aware of the challenges ahead.

Qihoo 360 Technology Co Ltd, a Web security firm, has become the latest Internet company to announce that it plans to enter the smartphone sector. Qihoo said it will spend $400 million setting up a joint-venture with affordable handset maker Coolpad Group Ltd.

"Chinese companies are trying to build a cloud-based ecosystem and smartphones are just a part of their strategy," Tian said.

Analysts said the only good news for Samsung is that most local players are still focused on building market share in third-tier or smaller cities in 2015.