Can Samsung weather it out?

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South Korea’s iconic company Samsung has run into turbulent weather. This is the company that challenged Apple products and rode on the “android wave” in India and rest of the world to claim number 1 spot in many a mobile devices tally.

In February 2015, most analysts and market research firms released 2014 trackers recording a slip in Samsung market position. It’s losing ground, is the refrain from just about every quarter, except an international consumer research firm called GfK, which actually happens to be a reputed brand name with international presence.

Samsung commissioned this research and has been using data from GfK to counter all research groups. These groups are literally screaming with delight about the impending decline of Samsung as new nimble players at price points more in tune with developing market realities flood the mobile phone and tablet market. The basis of all these arguments is the difference between tracking parameters. Almost all market-research firms in the sector track shipments, GfK data tracks retail sales.

Now, the question is: What is the probability that shipment figures can be grossly different from the ones aggregated from the retail sales data? When tracked over a reasonable time-period, like a year or so, shouldn’t these tally or at least be somewhat close instead of a huge differential that is getting thrown around in the media reports? Moreover, broadly speaking, in case of a mismatch, shipment figures should generally be higher than the retail sales figures.

One reason of the mismatch, cited by Samsung is coverage of distribution and retail points. The Samsung statement said the coverage is inadequate for research agencies and that perhaps is the reason of the anomaly. If I were to give this argument to my colleagues at Cyber Media Research, who also track the handset market the argument will not really find feet, as sample sizes are indicative enough and even if there is a margin of error, it cannot be a very wide margin, as claimed by Samsung.

The other possibilities for this mismatch include a market flush with counterfeit handsets, which may not be the case. The turbulence for Samsung continues. The company needs to clear the air around this, instead of entering into data wars with the analysts.

It obviously is a matter of survival and growth for Samsung, in the face of tough competition from brands unheard of. New players continue to enter fray and elsewhere in the world there have been instance of a rank new player rising to the top of market in just three years. Whoever said staying No 1 is easy.

The many-million-dollar question is: Can Samsung weather it out with an India strategy? It’s time. Move fast. Clear the air and answer the question, Samsung.

V&D

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Posted on February 26, 2015, in Sri Lanka. Bookmark the permalink. Comments Off on Can Samsung weather it out?.

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