Tumbling profits cause Samsung to overhaul its smartphone strategy

Following second consecutive quarter where profits have tumbled, Samsung is facing up to an uncertain future. Sure, the company has a long way to fall before things get really seriously, but still the strategy moving forward has been muddled by a poor 2014, and the Korean company’s standing at the top of the pile is under scrutiny for the first time. Now the company is being forced to revise its smartphone output and there will be plenty of changes afoot.

Samsung Electronics has vowed to overhaul its mobile phone handset lineup after profit from smartphones tumbled last quarter to the lowest in more than three years. The South Korean firm, which climbed from smartphone laggard to top seller in the past three years, had prided itself on responding quickly to market demand and tailoring handsets to the needs of users and mobile carriers around the world. But its rapid success with a product category pioneered by rival Apple is undergoing an equally stunning reversal. Earnings from Samsung’s mobile phone business began declining this year, undermined by lukewarm sales of the Galaxy S5 smartphone and an onslaught from cheaper local brands in China and India. Apple also eroded Samsung’s leading market share in developed nations.