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Samsung to reduce smartphone variants by up to 30% starting next year

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Smartphone maker Samsung will reduce its smartphone offerings by up to one-third beginning next year, new report claims.

According to the Wall Street Journal report, Samsung head of investor relations Robert Yi said during a presentation in New York that the South Korean handset maker will cut the number of smartphone models it sells by 25 percent to 30 percent in 2015. The news was further confirmed by a company spokesman on Tuesday.

Over the past several years, Samsung had been rigorously putting efforts to compete with Apple’s iPhone and other rival Android-based devices. Its current massive smartphone portfolio ranges from the flagship Galaxy S5 and Galaxy Note 4 to the Galaxy S5 Active and Galaxy Note Edge, the Galaxy A3, Galaxy A5, Galaxy S5 Mini, Galaxy Alpha and a number of other handsets.

Samsung is currently facing tough competition from Chinese competitors such as Xiaomi, Huawei and Lenovo in the low- and mid-range segments.

According to Strategy Analytics, Samsung’s global smartphone market share fell to 24.7 per cent in the third quarter from 35 per cent a year earlier. The company’s operating profit margins from the mobile business dropped down to 7 per cent in the July-September period, from above 15 percent recorded in the last ten consecutive quarters.

The company claims that having fewer models to focus on would help it in streamlining costs, which as a result would increase its profitability.

Although Samsung didn’t disclose which and how many models would be affected by the reduction, it said that it will now begin focusing its attention on the mid- and entry-level segments.

Samsung will “increase the number of components shared across mid- to low-end models, so that we can further leverage economies of scale,” one of the company’s mobile division executive said during an earnings call last month.

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