Samsung hopes to cash in on entry-level smartphone sector

Samsung Electronics Co Ltd, the world's biggest smartphone vendor by shipments, said the company aims to capture more than one-third of China's entry-level smartphone market this year, according to the senior vice-president of Samsung China.

Samsung announced on Friday that it had officially entered China's affordable smartphone market by offering two models priced under 1,600 yuan ($253).

The company is the third international mobile brand to join China's low-price smartphone market, after Motorola Mobility Inc and HTC Corp.

"There is a strong market trend that prompts us to provide lower-price smartphones in China ... and I think it's time now," said Wang Tong, senior vice-president of Samsung China, who is also the company's chief technology officer. He made the remarks at a Beijing news briefing on Friday.

Wang predicted China would ship more than 60 million entry-level, 3.5-inch screen smartphones this year, rising from 50 million last year.

"We are sure that about one-third of those products will be produced by Samsung," Wang said.

The Samsung S6102E and S6352, whose retail prices are 1,158 yuan and 1,599 yuan, respectively, can be offered at much cheaper prices under China Unicom (Hong Kong) Ltd's service contract. Samsung said these products are targeted at young people.

Competition in China's low-end smartphone market has intensified as more and more domestic and international players jump in.

ZTE Corp, the world's fourth-largest mobile phone maker, joined forces with China Unicom last June to sell the first 1,000-yuan smartphone in the Chinese market. The Blade V880, a low-price smartphone produced by ZTE, has achieved sales of more than 8 million units in the Chinese market since June.

Other domestic mobile phone vendors, such as Huawei Technology Co Ltd and Lenovo Group, are all keen to introduce affordable smartphone models.

Zhou Youmeng, manager of the sales and marketing department at China Unicom (Hong Kong) Ltd, pointed out that mid- and low-end smartphones, which usually sell at below 2,000 yuan ($317), would attract the most attention from Chinese customers this year.

"At present, more than 90 percent of Chinese mobile-phone users own a handset worth less than 2,000 yuan," Zhou told China Daily in a January interview.

Chinese Internet companies, such as Baidu Inc, Shanda Interactive Entertainment Ltd and Alibaba Group, are also pursuing low-end mobile phone buyers. By launching self-branded smartphones pricing between 1,000 yuan to 2,000 yuan starting from last year, those Internet companies have managed to attract some followers.

Samsung, though currently the No 1 player in the Chinese smartphone market, did not have an obvious price advantage over Chinese vendors like ZTE and Huawei, analysts said. However, its branding and years of experience in growing business in China may help Samsung realize its target.

Wang Ying, a telecom analyst with Beijing-based research firm Analysys International, said Samsung did well in China in the second-generation period. "The company sold many low-end feature phones to Chinese customers in the 2G era and it may be easier for Samsung to replicate this success in the 3G era," she said.

By 2016, more than half of all smartphones sold will cost less than $300, according to Switzerland-based research firm Informa. Last year, 81 percent - most of them iPhones - cost more than $300. The proportion costing less than $200, which currently account for 5 percent of the global market, is expected to increase almost fivefold, to 24 percent, by 2016.

Samsung gained a market share of 22 percent in China's smartphone market in the fourth quarter of last year, according to Analysys International.

Nokia ranked second with a 15.3 percent share, while Huawei held 13.3 percent and ZTE had 11.2 percent.

Contact the writer at shenjingting@chinadaily.com.cn