“The Spanish mobile market is the most competitive in all of Europe”

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The South Korean multinational acknowledges that they will have sold 10% fewer devices in 2022, but billed 1% more as customers opt for high-end mobile phones with more durability

In a market as competitive as the Spanish one, the challenge faced by the manufacturer that sells the most mobile phones in Spain is to continue to innovate every day and at prices that – they say – are not at all in the years of the pandemic increased. Samsung is the foldable mobile phone brand of choice, with sales already accounting for 15% of the company’s total high-end mobile phones. David Alonso, the director of the Mobility Business of Samsung Electronics Iberia, explains in an interview with this newspaper that they are looking for options that make the most premium devices more accessible to all their customers, such as ‘rental’.

-What does the mobile part mean for Samsung?

-It is the main activity of the company in Spain and worldwide. It is a very important part, it is more than 50% of the company and at the image level it is the most iconic company. When we talk about the Samsung brand, the first thing that comes to mind is mobile phones. And of course, I think it’s a very, very important product both from a business standpoint and from a brand standpoint, from a brand image standpoint.

-And has that company also suffered from the pandemic in recent years?

-The pandemic has affected all businesses except the online channel, so just ask Amazon (laughs). Anyway, after the pandemic, we notice growth in all segments, especially because people are already going out to visit stores. It is true that there has been a change in where people buy mobile phones. There was growth in online business during the pandemic and now traditional business is recovering, albeit not 100%. In 2022, we increased our sales compared to 2021, but the market behaved differently. We sold fewer units, about 10% less, but we billed more, consumer spent more, in value we grew 1%.

Does that mean mobile phones have become more expensive?

-No, because in fact we did not increase prices neither last year nor during the whole pandemic. We took the increase in costs into our own margin because we do not want to make the situation more difficult for consumers by raising prices. Fewer units have been sold because the device’s lifespan has been extended, meaning that a consumer now has the device for longer. In addition, we have increased billing because the mobiles that have stopped selling the most are curiously those that cost less than 150 euros, while the segment that has grown the most is the most expensive mobile.

Does the audience you address change in communication or advertising campaigns?

-We have a very wide range of products and ultimately the target group we address is very broad. Basically the whole audience. What we try to do is cover the needs or aspirations of each of the segments. It is not only because of the purchasing power, but also the characteristics of the person are different. Someone who buys you a mobile phone for 800 or 1,000 euros will have different needs than someone who buys one for 200 euros. It is true that in the communication field we focus on the highest quality products, that is where we want to distinguish ourselves and The maximum exponent of this high quality and innovation are usually high-end mobile phones. And the communication of this type of product drags the rest.

-What acceptance do foldable mobile phones have in the market?

-Very well. Also taking into account the fact that we are practically the only manufacturer of foldable mobile phones. The launch of the fourth generation of the Galaxy Z Flip 4 has been very well received. And it is no longer so much about innovation, but rather that it is increasingly seen as a device that establishes itself in the market. In fact, they already account for 15% of our premium device sales, which is quite an achievement. They are growing in double digits compared to sales of previous versions, market penetration is increasing.

-And compared to other countries, do you know if this type of cell phone works better in Spain than in others?

– More or less the same in the European market, which is most similar. Everything always in proportion to the population of each country. But at the level of penetration rates, it is comparable in almost all of Europe.

-Companies from all industries have announced price increases in 2023 to adjust costs. What strategy are you going to have?

-The goal is that the impact on the end customer is as small as possible. With the new releases it’s different because they contain new innovations, but with the ones we have we’re not going to relaunch it at a higher price. The new ones will have a price according to the materials used and the innovations of the whole process, in addition to what has been invested in them. But it is our intention that the impact on the price for the consumer is as small as possible.

-How do you deal with this increase in costs? Many technology companies are laying off employees. By what percentage have material and energy costs increased at Samsung?

-The industry that says it is not affected is lying. Some more, others less… It is true that Samsung, as a manufacturer of its own components, has a little less influence than other companies. And this allows us to keep the business a little longer, but of course it has an impact and we try to absorb that impact as much as possible in a way that impacts the end consumer as little as possible by reducing our profits. But we understand that now is what needs to be done. Ordinary citizens are suffering from the crisis and we are looking for new ways to make these devices more accessible as well. For example, we promote rental, subscription models, device rental… Formulas where you may not have to pay 1,000 or 1,200 euros on a mobile in one go, but pay 40 or 50 euros per month for a certain period of time, making them much more accessible . We try to make it easier for the consumer.

-I understand that these formulas also try to increase the sales of expensive devices.

-Yes Yes Yes. Eventually it all comes together.

-You don’t have a lot of competition in the foldable part, but you do have high-end mobile phones and especially mid-range with a lot of new companies, mainly Chinese. What sales level position is Samsung in?

-The Spanish market is very nice because it is by far the most competitive market in all of Europe. It’s also the gateway for all Chinese brands, and it’s a market that our American friends at Apple have been watching with special affection lately. But competition is good for us and for the end consumer, it leads you to try to improve. On the one hand, at the top of the premium devices, there are practically two manufacturers, namely Apple and us, and in the middle or lower middle part, all Chinese brands enter. What we’re trying to do is differentiate ourselves with what I’ve mentioned: quality and innovation. What we want is for our brand and products to be seen – because we truly believe they are – as higher quality devices. Samsung is number one or number two in sales in Spain, depending on the category or if we look at the value or number of sales. But come on, we’re still leaders and we want to stay that way.

What future plans does the company have? How do you plan the company in 2023?

-The year looks very interesting. We’ll start with the launch we have next week of the company’s new mobile phone, which we’re really excited about. I think it will be a great success with the Spanish public. And we will have the focus on different things, like the ecosystem, because we don’t just make ‘smartphones’, but want to add value and interact with the devices around it like watches, headphones, laptops or tablets. For us, the way they interact and communicate in this ecosystem is very important and we will try to make it more accessible, because we are aware that we are in a moment of crisis, of great uncertainty. The second focus is sustainability, because all this innovation is worthless if we don’t make it more sustainable. It is extremely important to make our devices more sustainable, both from an energy point of view that we optimize the consumption of batteries, the use of materials, the plastics that come from fishing nets… and the packaging is already 100% recycled . It’s part of our consumer value proposition.

Source: La Verdad

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