With profit margins slipping, Samsung cutting phone models and production costs by a third
There are major changes brewing at Samsung, reports the Wall Street Journal, and chief among those is the fact that we will be seeing far fewer Galaxy Megas, Cores, Grands, Aces and so on. Even we already lost count of those, and we doubt anyone is trying to keep up anyway, as the tens of phones that Samsung is turning every year with very minor specs and design differences to each other and even their predecessors got very confusing very quickly.
Not anymore, though, as Robert Yi, head of investor relations, confirmed during a presentation in New York that it will be cutting its model portfolio almost by a third next year. Samsung's profit margins from the mobile business, which are its bread and butter, were cut in half this year, due to the increased competition from both other companies' flagships, and from the Chinese makers on the low- and mid-range side. That is why Samsung recently issued a memo to suppliers for cutting costs by 30%, and now intends to “increase the number of components shared across mid- to low-end models, so that we can further leverage economies of scale,” as per one executive.
All in all, this bodes well for having far fewer Samsung handsets next year, and hopefully this will increase the margins sufficiently, so that Samsung focuses on making unique handsets on the high end, which it seemingly intends to do, starting with an eventual dual-edged Galaxy S6, or whatever the Project Zero undertaking gets named in the end.
source: WSJ
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