Samsung drastically cuts smartphone models; shifts engineers to IoT - Mobile World Live

Samsung drastically cuts smartphone models; shifts engineers to IoT

18 NOV 2014

Samsung is to cut the number of smartphone models it releases in 2015 by about 25 per cent to 30 per cent, as the South Korean vendor tries to cut costs in the wake of a disappointing financial performance.

The figure was mentioned by Robert Yi, the company’s head of investor relations, during a presentation and then subsequently confirmed by a spokesperson to The Wall Street Journal.

Separately, Samsung is transferring about 500 engineers from its smartphone unit to its Internet of Things initiative, an area of the mobile market that is seen to be on the up.

The latter shift in priorities was reported by Bloomberg.

In October, Samsung reported a third-quarter fall in operating profit in its IT and Mobile Communications unit, of which mobile makes up the lion’s share, of 74 per cent to KRW1.75 trillion ($1.66 billion), on revenue which decreased 32.8 per cent to KRW24.85 trillion.

Mobile makes up 96 per cent of the IM sales.

On a group level, the company reported a profit which almost halved to stand at KRW4.22 trillion (from KRW8.24 trillion), on revenue which fell 19.7 per cent to KRW47.45 trillion.

The thinking appears to be that a streamlining of its smartphone portfolio should reduce costs so making the company better able to compete with fast-growing rivals such as Xiaomi.

Certainly, having fewer models should allow Samsung to better control its inventory and supply chain.

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Richard Handford

Richard is the editor of Mobile World Live’s money channel and a contributor to the daily news service. He is an experienced technology and business journalist who previously worked as a freelancer for many publications over the last decade including...

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