Summary
Samsung continues to dominate in sales growth in the key low to mid-end markets and in developing markets where it shows how to build channel strength.
Samsung is also a leader in fashion touch handsets, ie devices in the mid-sector that sell on looks and touch screens to a mainly younger audience.
Growing qtr on qtr sales by 15pc, means it is bucking the annual trend which will see an 8pc drop in worldwide sales.
Analysis
This year will see annual handset sales drop by a forecast 8pc, as both the recession and slow down in mid-tier sales take effect. The market is now shaping up to be dominated by low to mid-end sales, developing market low end sales and also by high end smartphone sales.So where does Samsung fit into this declining market?
Samsung is cleverly finding key sectors within this market and exploiting them to the full, for example: it dos not have a full featured touch smartphone, yet it has a range of touch phones in the feature phone sector [that unlike the segment itself which is contracting] show high grow and penetration.
From a margin perspective this is good news for Samsung, it has worked to deliver a broad range of devices which while externally quite different, internally share over 80pc of the same platform.
The same strategy means Samsung can take a simple platform, change the externals and then deliver a range of low-end, low cost handsets for the developing markets. Here Samsung is demonstrating how to build an effective channel, dominated by its branding (we have to assume that Samsung's ad spend is somewhere near the top of the league) and desire to lead the market.
Going forward this will make life extremely difficult for Motorola and Sony Ericsson which are giving up market share to Samsung and I see no reason why in the short term it cannot achieve 20pc share. LG is a strong contender but still lags Samsung in buying channel and end user mind share.
