Samsung, the world’s number one smartphone maker, has warned that its results this quarter might fall short of expectations. Now that Samsung’s unseated Apple as king of the mobile market, it leaves the question — could the South Korean company suffer the same fall from grace as its biggest competitor?
Strong sales of Samsung’s latest smartphone, the Galaxy S4, helped put the company back on top, but staying there might be tough.
“The growth of smartphones is slowing, which just means that everybody who wants a smartphone, pretty much has a smartphone,” says tech industry analyst Jeff Kagan. “So with that, all these makers are going to be facing the same threat; they have to come up with new devices, new pricing, new features.”
As Samsung can attest, innovation gaps leave time for competitors to catch up, especially if they make cheaper phones.
“Chinese vendors Huawei and ZTE, which have adopted a very low-margin to no-margin strategy, are really creating pricing pressure for vendors like Samsung and others on the low end,” explains Gartner analyst Hugues de la Vergne.
Samsung has problems in the high-end market, too. There’s a new smartphone coming down the line from Motorola and Google, set to launch August 1.
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