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Samsung Pulls Back on Its Machine-Gun Approach to Smartphone Market

The company plans to shrink its product line next year by as much as a third.

Ina Fried

A big part of Samsung’s Android strategy has been to create a product in every imaginable shape and size and with any set of features that has even a chance of clicking with consumers.

While most of its profits come from flagships like the Galaxy S and Galaxy Note, the company has brought out hundreds of Android products covering myriad form factors and features. There have been products with keyboards and ones with large built-in zoom cameras and rugged ones, too. Samsung even had one model, the Galaxy Beam, with a built-in projector.

The point wasn’t necessarily that Samsung thought each of these would be hits, or any of them. But, in taking this approach, Samsung ensured that it would not be blindsided or leave an opening for rivals to grab share just by coming up with an idea Samsung hadn’t thought of.

The strategy is akin to winning a checkers game by placing a piece on every square. But it has also been rather effective, with Samsung dominating the global market for Android phones.

The problem is, that’s not the most efficient way to do things over the long term, a factor that has shown up in Samsung’s most recent earnings. Even when it comes to market share, Samsung has been losing ground. Last quarter it held just under a fourth of the global market, down from nearly a third of the market a year ago, according to IDC.

Acknowledging it may have spread itself too thin, Samsung said this week it plans to pare back its smartphone product line by as much as a third.

“We are currently streamlining our product portfolio efficiency by focusing on our more competitive products,” a Samsung representative told Re/code.

This may mean fewer pieces on the checkers board, but if it can place the right ones, it can win the match at a much lower cost.

But a smaller product line isn’t a panacea for Samsung, which must compete not just with Apple at the high end, but with a host of competitors at the other end of its business. Rivals there include powerful Chinese players Xiaomi, Lenovo, ZTE and Huawei, as well as legions of regional players building on reference designs from chipmakers such as Mediatek and Qualcomm.

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