Category: Electronics

Retail News Asia is committed to providing both local and global retailers with the latest Electronics news throughout the Asian market. This on a daily base.

  • When Xiaomi is dying for expansion

    When Xiaomi is dying for expansion

    Never mind smartphones – Chinese tech giant Xiaomi is now eyeing anything and everything as it broadens its investment portfolio.

    With the mobile handset market increasingly crowded globally, and offering diminishing returns, a new Xiaomi expansion strategy has been created: moving into new markets which offer growth potential.

    Co-founder Liu De has told Wired magazine he plans to extend the company’s business model of investing in companies and giving them access to its designers, marketing might and supply chain, to branch into other industries and different products. Xiaomi usually buys a 10 to 20 per cent stake in such companies, insisting on the rights to brand and market products made by these businesses.

    “We’re using our entire platform to lift these companies to the next level,” De told Wired.

    Four of the companies Xiaomi has invested in have already achieved market capitalisation greater than US$1 billion and the portfolio of companies have now collectively sold more than 50 million connected devices.

    The star product is the Mi Air Purifier, one of the most popular models in China.

    Xiaomi believes its investment approach will turn it into a so-called “Everything Company.”

    “It’s a unique model that I haven’t seen before and that I think is only viable for a company that comes from China,” Hugo Barra, the company’s outgoing global VP, said.

  • EZ Link launches contactless payment wearables

    EZ Link launches contactless payment wearables

    Singapore’s EZ-Link, the market’s largest issuer of CEPAS-compliant cards, announced the launch of EZ-Link Wearables.

    Launched in collaboration with Watchdata Technologies and Garmin, the ez-link CEPAS purse will be enabled on the Batman v Superman Fitness Tracker X EZ-Link and the Garmin vívosmart HR with EZ-Link smartwatch.

    The devices will support contactless payments on public transit and at more than 30,000 ez-link acceptance points island-wide.

    While offering support for contactless payments, the devices remain smart health and fitness devices that monitor and record daily activities to support a healthy lifestyle.

    “Last year, we integrated a similar contactless chip into the vívosmart HR band in Taiwan which lets users pay for train rides, bus trips and retail purchases via the I-Pass electronic wallet stored within the chip,” Garmin South Asia GM Al Sundoro said.

    “This collaboration with EZ-Link puts Singapore on the road map as the first country in South-east Asia to offer a contactless payment solution where you can pay for public transport rides with a tap of your wearable on your wrist.”

  • Samsung Malaysia launches into regions

    Samsung Malaysia launches into regions

    Samsung Malaysia Electronics has launched its first Samsung Experience Store (SES) in Genting Highlands, at Sky Avenue mall.

    It is a one-stop shop providing mobile phones and accessories as well as associated services.

    Samsung Malaysia Electronics IT and mobile business unit VP Lee Jui Siang says the opening of the store is another step forward in the company’s plans to expand to different regions of Malaysia.

    To mark the store’s opening, Samsung offered customers a chance to take home a personalised caricature mug specially drawn using a Galaxy Note 5. It also gave away a special-edition umbrella for Samsung product purchases.

  • Indonesia’s cooperative kicks off smart phone production

    Indonesia’s cooperative kicks off smart phone production

    Jumping on the bandwagon of local cell phone production, newly-founded cooperative Koperasi Digital Indonesia Mandiri (KDIM) on Friday started the production of a locally built smartphone under the brand of Digicoop.

    The smartphone is set to bolster the domestic cell phone market currently dominated by big players, especially foreign manufacturers.

    The initial model comes with a 4.7 inch-screen, a 1.5 Ghz quadcore processor, 1 GB of RAM, two cameras, two SIM card slots and 4G LTE compatibility.

    Unlike commercially distributed phones, this smartphone can only be obtained by becoming a member of the cooperative via its website, after which one needs to pay Rp 100,000 (US$7.48) per month for one year. Delivery occurs after two month of subscription.

    KDIM chairman Henry Kasyfi Soemartono said the cooperative would produce 5,000 units in the initial phase, with pre-orders currently running at 1,500 units.

    Henry further said the basic idea of the cooperative was to maximize people’s power to create a strong local information technology business.

    “A cooperative is the ideal format for crowdfunding in Indonesia,” said Henry during the event to kick off production. “It is neutral and everybody has the same say. It also provides benefits to its members.”

    KDIM was set up in June last year by the Associations of Indonesian Internet Providers (APJII) and Indonesian Information and Telecommunications Society (Mastel).

    It aims to bring the cooperative format to Indonesia’s information technology (IT) business currently saturated by giants.

    The cell phone is the result of collaboration with a team of experts from the Bandung Institute of Technology (ITB) and is made in the factory of electronics manufacturer PT VS Technology in Cikarang, West Java.

    Indonesia has seen its domestic phone industry rise in recent years, with some manufacturers, like Polytron, already running local factories.

    Communications and Information Technology Minister Rudiantara, who was present during the event, said the economic model of a cooperative could be a solution for the IT business, including the ride-sharing business based on mobile phone applications.

    “The Uber and Grab Car drivers need entities to operate, while both companies have yet to register as transportation companies. So, we’ve suggested that they form cooperatives for the drivers,” he said.

    Rudiantara said the government would support the development of KDIM, such as by facilitating synergy with cooperatives for ride-sharing.

    Henry said KDIM had ambitions beyond smartphone-making, namely to buy a satellite and run an internet provider business. To do this, members interested in participating in the satellite purchase could deposit Rp 5 million and in return access internet for free for a lifetime.

    “We need to find at least 500,000 people who want to participate, so that we can buy a satellite for the people,” Henry said, adding that a satellite would cost between $200 million to 250 million.

    The plan would materialize in the next three years as preparations were still underway, he added.

    Based on the latest APJII survey, Indonesia has 132.6 million internet users, the highest number in Southeast Asia and the fourth-highest globally. Half of its more than 260 million population still cannot access the Internet.

    KDIM digital equipment head Teguh Prasetya said KDIM was preparing for designs for middle and high-end models. In the meantime, the cooperative tried to increase its local content, including applications, from 20.2 percent at present to 30 percent by the end of this year.

  • The Battle Between iPhone and Galaxy to Begin in South Korea

    The Battle Between iPhone and Galaxy to Begin in South Korea

    Apple has confirmed that it plans to open its first South Korea retail store moving into the backyard of its biggest rival for smartphones Samsung Electronics.

    Apple, which this year celebrates its 10th anniversary of the iPhone said on Friday that it is very excited about having its first retail Apple Store in South Korea. The Cupertino, California based tech giant praised Korea as one of the leaders in technology and telecommunications.

    A spokesperson for Apple did not comment when asked when the store would be opening or where any of the Apple stores would be opening across South Korea.

    However, those people who are familiar with the opening, said the company looked at different sits in Gangham, an upscale neighborhood of Seoul.

    One of the possible locations is a short distance from the longtime headquarters of Samsung in Gangham, where the consumer electronics giants has a flagship store for its global products that is three stories high, said those familiar with the situation.

    The same people said that Apple was looking for a site on the fashionable shopping street of Garosu-gil in the same neighborhood.

    A representative from Samsung did not respond when contacted for a comment.

    South Korea, which is the fourth largest Asia economy, has been a difficult market for a long time for Apple. Sales of smartphones are dominated by Samsung and local rival LG Electronics. The popular hometown favorites together hold close to 80% of the overall smartphone market across the country.

    Apple does not even have a break down for sales in the country.

    The breakdown of smartphone sales in Korea is approximately 40% each for Samsung and LG and between 10% and 15% for Apple. That means South Korea is the only developed country that does not have a large iPhone user base.

    Apple, in South Korea, relies on different carrier partners as well as third party retailers. Those groups apply for a license to operate as Apple authorized vendors.

    On Friday, the company posted new job openings for 15 new positions on its website for South Korea, which included a store leader.

    A spokesperson for Apple said in a prepared statement released on Friday by the smarpthone maker that the company was now hiring its team that will offer customers in the capital of South Korea the education, entertainment and service that is loved by millions of Apple customers across the globe.

  • South Korean home appliance and IT giant opens new store in Genting

    South Korean home appliance and IT giant opens new store in Genting

    Samsung Malaysia Electronics has launched its first Samsung Experience Store (SES) in Genting Highlands at the Sky Avenue mall, offering a wide range of the Samsung Galaxy mobile phones as well as a variety of wearables.

    The SES outlet is a one-stop shop that provides customer satisfaction with the best products and services.

    “The opening of the SES is another step forward in our expansion plans to different regions of Malaysia,” said Samsung Malaysia Electronics IT & mobile business unit vice-president Lee Jui Siang.

    “Our aim is to continuously expand our channel coverage, providing consumers a revolutionary digital convergence experience.

    Visitors to Genting Highlands can now experience the full Galaxy ecosystem at the newly opened Samsung Experience Store in the prestigious Sky Avenue mall.

    “With this expansion to Genting Highlands, we want to bring our innovations closer to locals as well as those visiting the country,” he said.

    In celebration of the store’s opening, Samsung offered customers a chance to take home a personalised caricature mug specially drawn using a Galaxy Note5 with purchase of any Samsung product on Jan 14.

    The company also gave away a special edition umbrella for the purchase of any Samsung product.

    Located at Lot T2B-57, Level T2B, Sky Avenue, Genting Highlands Resorts, the SES is now open every day from 10am to 10pm.

    Samsung Malaysia Electronics president Lee Sang Hoon (right) presenting a specially designed caricature mug, drawn using the Galaxy Note5, to Netcom Mobility Sdn Bhd director Elvis Chew as a token of appreciation.

    Samsung Malaysia Electronics president Lee Sang Hoon (right) presenting a specially designed caricature mug, drawn using the Galaxy Note5, to Netcom Mobility Sdn Bhd director Elvis Chew as a token of appreciation.
  • TCL Electronics pictures broader appliances market beyond TVs in Thailand

    TCL Electronics pictures broader appliances market beyond TVs in Thailand

    TCL Electronics, a Chinese electrical appliance manufacturer that sells televisions in Thailand, is considering expanding its product range in the country. The company is conducting a market study that may pave the way for it to sell other home appliance products, including air-conditioners, refrigerators, and washing machines. Such a move would reduce TCL’s reliance on only one product line in the Thai market.

    Thailand’s overall consumer electronic market dropped 3 per cent year on year to Bt34.5 billion in the first 11 months of last year. Sales of flat-screen and plasma televisions dropped slumped by 8 per cent |over the period to about Bt23.3 billion.

    In contrast, overall sales of home appliance products, such as refrigerators, air-conditioners, and washing machines, increased by 6 per cent to Bt54 billion in the first 11 months of 2016.

    Sandy Zhou, head of marketing at TCL Electronics (Thailand), said TCL Thailand was keen to add a broader range of electrical appliances to its offerings in Thailand, meeting rising consumer demand in the segment. The strategy also would help TCL to improve its operational efficiency and lower management risk.

    She said that TCL Thailand achieved sales of Bt2.5 billion last year, maintaining its position as a top-three TV player in Thailand with 8 per cent market share.

    Zhou said TCL’s main income is derived from products such as Smart TV and QUHD TV, which cover the mid to premium ends of the market. TCL’s customer base can be categorised as 45 per cent in Bangkok, with 55 per cent in the rest of the country.

    “TCL Thailand expects to increase our market share in the local TV market to 10 per cent or approximately 300,000 units (Bt3.2 billion in sales value) this year. For other home appliances, our products will be launched on the market in the third and fourth quarters of this year,” she said.

    “We however have no plan to set up a manufacturing facility for our consumer electronic and home appliance products in Thailand at this moment,” said Zhou.

    TCL Thailand has been established in Thailand for more than 13 years, building up a brand loyalty and good teamwork in its workforce.

    “For this year, our strategy is to expand our sales channels domestically. We plan to increase the number of our dealers here by 30 per cent, and by 15 per cent for the number of modern retail stores. We also plan to adjust the image of our existing 100 showrooms in the Kingdom to be under the ‘Creative Life’ concept,” she said.

    Zhou said that TCL had 75,000 employees throughout Asia, the Americas, Europe and Oceania, with sales organisations in more than 80 countries and regions, and 23 research institutions and 21 manufacturing and processing bases worldwide.

    “TCL Thailand will focus on Thailand only. TCL Group also has offices in the Philippines, Vietnam and Indonesia,” she added.

    TCL Thailand pursues its business with customer- and product-oriented strategies. Core strategies include a focus on brand awareness and price performance through maximising product value and performance efficiency.

    Wannapong Tawara, associate director of GFK Retail and Technology, a market research company in Thailand, said Thailand’s TV market value in 2017 should be similar to that of 2016, considering consumers are still cautious on discretionary spending.

    However, electrical appliances including TVs that are designed to be connected with other applications appeared to be in high demand, tapping into new consumer lifestyles, Wannapong said. With this in mind, electric appliance makers should consider introducing a variety of products that offer complex entertainment and service options and are well priced and easy to use, while coming with good after-sales service.

  • Chinese government clamping down on app stores

    Chinese government clamping down on app stores

    China’s government has issued an order for all app stores on the mainland to be registered.

    In a notice on its website, the Cyberspace Administration of China says its offices should ensure that records are kept on the country’s many app stores.

    “Many apps have been found to spread illegal information, violate user rights or contain security risks,” says the post.

    Unlike in the west, China’s app store market is very fragmented with as many as 150 vying for customers, including market leaders Google Play and Apple’s App Store.

    Registration is necessary, it says, to ensure it is clear who takes responsibility if apps, or app stores, are found to engage in illegal practices.

    Three weeks ago, Apple removed the English- and Chinese-language news apps of The New York Times from its China app store. The US tech giant says the government had told it the apps violated local regulations.

    Google’s store for apps using its Android operating system is blocked in China, with third-party stores taking its place. Most of China’s biggest app stores are controlled by internet and smartphone companies such as Alibaba, Baidu, Qihoo 360, Tencent and Xiaomi, as reported.

    It says Chinese laws are often intentionally broad and open-ended to allow regulators discretion in enforcing them. Concrete steps like the new order for registrations can indicate how laws will be carried out in practice.

  • South Korean prosecutors on the hunt for Samsung heir

    South Korean prosecutors on the hunt for Samsung heir

    The Samsung heir is accused of spending corporate funds on under-the-table deals. South Korean prosecutors on Monday sought the arrest of the heir to giant conglomerate Samsung for bribery in connection with a political scandal that has seen President Park Geun-Hye impeached.

    Samsung, the world’s largest smartphone maker, is already reeling from the international debacle over its Galaxy Note 7, which was recalled after some devices caught fire.

    In a statement, prosecutors investigating the political scandal said they asked a Seoul court to issue an arrest warrant for Lee Jae-Yong, the son of the Samsung group chairman Lee Kun-Hee.

    Samsung — the South’s biggest business group by revenue, which is equivalent to a fifth of the country’s GDP — has dozens of units including flagship Samsung Electronics.

    Lee’s arrest could have an “important” impact on the South Korean economy, a spokesman for the prosecutors acknowledged. “But we believe that achieving justice is more important,” he told reporters.

    The scandal centers on Park’s secret confidante Choi Soon-Sil, who is accused of using her ties with the president to coerce top local firms into “donating” nearly $70 million to dubious non-profit foundations which Choi then used as her personal ATMs, in exchange for political favors.

    Samsung is the single biggest contributor to the foundations and separately paid Choi millions of euros, allegedly to bankroll her daughter’s equestrian training in Germany.

    Lee, 48, is the vice chairman of Samsung Electronics and is accused of approving decisions to pay Choi large sums of money in a bid to win political favours.

    Samsung’s bribes totaled 43 billion won ($36.4 million), the prosecution spokesman said, adding Lee was also accused of embezzlement for spending corporate funds for bribery.

    In addition, he faces charges of perjury after he told a parliamentary hearing that he did not seek any preferential treatment in return for donations.

    The Seoul Central District Court said it would rule on the prosecutors’ request on Wednesday. If it approves the move, Lee — who was questioned by prosecutors for a marathon 22-hour session last week — will be the first senior executive arrested in connection with the scandal.

    In a statement Samsung said the prosecutors’ decision to seek his arrest was “hard to understand”.

    “There was no support that sought something in return,” it said. “We believe that a court will make a good judgment on this.”

    ‘Personal matters’

    Prosecutors are in particular probing whether Samsung’s donations and payment to Choi were aimed at securing government approval for a controversial deal it sought in 2015.

    The merger of two Samsung units, textile manufacturer Cheil Industries and construction arm Samsung C&T, was seen as a key step towards ensuring a smooth third-generation power transfer to Lee.

    The deal was opposed by many investors who said it willfully undervalued Samsung C&T’s shares. But the National Pension Service, a major Samsung shareholder, approved the transaction, which eventually went through.

    A former welfare minister, Moon Hyung-Pyo, who oversaw the operations of the pension fund at the time, was formally charged Monday with abuse of power for pressuring its managers to approve the merger.

    Park, accused of colluding with Choi to extract money from the firms and letting the friend meddle in a wide range of state affairs, was impeached by parliament last month.

    South Korea’s constitutional court is deciding whether to uphold the impeachment. If it does, Park will immediately lose her executive immunity from prosecution and an election to pick her successor will be held within 60 days.

    Both women have denied any wrongdoing.

    Choi, who is currently on trial for coercion and abuse of power, appeared at the Constitutional Court proceedings for the first time on Monday.

    She admitted visiting the presidential Blue House several times to help Park handle “personal matters” and had shared an e-mail account with a senior presidential aide to edit some of Park’s official speeches. But she denied seeking any financial favours using her presidential connections.

  • James Dyson seeks single-brand stores in India

    James Dyson seeks single-brand stores in India

    Appliances innovator Dyson is seeking Indian government approval to open single-brand retail stores.

    But the company faces a challenge is getting the government to relax the mandatory local sourcing requirements, arguing its products as “state-of-the-art”. Such goods are exempted from the usual norms, according to Indian media.

    Dyson

    Dyson revealed plans to enter India last November.

    “We will invest 150 million British Pounds in next three to five years to open stores and set up retail network here,” founder and chief engineer Sir James Dyson said.

    “Our first store would open in the middle of next year, if we are allowed to.”

    Dyson designs, manufactures and sells appliances such as vacuum cleaners, hand dryers, bladeless fans and heaters. It has filed 7500 patents worldwide.

  • 200 Vietnamese firms in Samsung chain

    200 Vietnamese firms in Samsung chain

    Nearly 200 Vietnamese enterprises are participating in the component supply chain used by three Samsung plants in Việt Nam, including 20 tier-1 vendors and 178 tier-2 vendors.

    Also, Samsung plans to raise the number of level-1 suppliers in Việt Nam to 29 this year, said Han Myoungsup, President of Samsung Complex Việt Nam.

    Several local companies were able to join Samsung’s production chain, showing that Việt Nam’s support industry could be developed if domestic firms know how to take advantage of the opportunities provided by large enterprises.

    Samsung Việt Nam’s management board last week visited and surveyed the two companies, An Lập Plastic Co Ltd in Hà Nội’s Long Biên District and Việt Hưng Plastic Co Ltd in Hưng Yên Province. It also worked directly with three other suppliers, including PTE Company, Minh Nguyên Company and Việt Hưng Plastic Co Ltd in HCM City.

    This field survey is part of Samsung’s programme to provide experts to help Vietnamese vendors improve their capacity to join Samsung’s supply chain.

    “Samsung Việt Nam has also recorded a significant breakthrough in raising the localisation rate of products, from 35 per cent in 2014 to 51 per cent in 2016. This is a great contribution that helps made-in-Việt Nam products become popular worldwide,” Han said.

    Samsung’s five-vendor visit is part of the supporting programme of Samsung’s experts for Vietnamese businesses. Accordingly, Samsung’s experienced experts from South Korea have directly assisted the five enterprises in the past three months to improve their production process to assure they meet Samsung’s criteria. They are also five of 14 Vietnamese vendors who have received Samsung’s direct assistance since September 2015.

    This supporting programme has also confirmed a strong commitment of Samsung, in response to a call by the Government of Việt Nam, which is increasing the localisation rate and the presence of Vietnamese enterprises in Samsung’s component supply chain.

    “I do hope that, through Samsung’s supporting programme, Vietnamese enterprises could gain the knowledge and experience to enhance their capacities. Samsung believes that if a product can be localised, we will maximize its localised content,” Han added.

    Hoàng Anh Tuân, President of Việt Hưng Plastic Company, said their turnover has seen rapid growth since they have been supplying packaging to Samsung. Last year, their sales to Samsung accounted for half of their total VNĐ2 trillion (US$88.9 million) turnover.

    “Our largest advantage from Samsung’s supporting programme is the change in mindset. We commit to always learning and changing in order to apply experience from Samsung in the best way,” Tuân added.

    “Being suppliers to Samsung could be a quality measurement to help local firms easily participate into other value chains. We are also a packaging supplier to LG and Canon,” he noted.

    He emphasised that joining the supply chain for Samsung has been transparent and open to all businesses. Those seek to participate in the chain without sufficient capacity would be immediately removed.

    Trương Quang Khởi, An Lập’s director, said they have opportunities to modernise their company after joining the Samsung production chain.

    “We have received support from Samsung to upgrade our workshops, equipment and technology, as well as to learn effective management models,” he added.

    Samsung Electronics is one of the largest foreign investors in Việt Nam, with three manufacturing plants in Bắc Ninh (SEV), Thái Nguyên (SEVT) and HCM City (SEHC). With an export turnover of over $37 billion in 2016, Samsung Electronics in Việt Nam contributed 20 per cent to Việt Nam’s exports.

    This year, Samsung Electronics in Việt Nam has set a target of 7-10 per cent growth in export turnovers. Samsung aims to not only turn Việt Nam into the world’s smartphones and electronic appliance production base, but also create more opportunities for Vietnamese enterprises in the field of supporting industries to become involved in Samsung’s global supply chain.

  • Apple’s 10th anniversary

    Apple’s 10th anniversary

    As the late Apple boss Steve Jobs appeared on Macworld conference stage on January 9, 2007, attendees were already expecting the premiere of an Apple smartphone. But Jobs first sought to sow a little confusion.

    “Today we are introducing three revolutionary products,” Jobs said. “The first one is a wide-screen iPod with touch controls. The second is a revolutionary mobile phone. And the third is a breakthrough internet communications device.” Was he really introducing three new devices?

    Soon everyone in San Francisco’s Moscone Centre knew what he meant: “These are not three separate devices, this is one device. And we are calling it iPhone.”

    Apple had reinvented the phone, Jobs said. As it turned out Apple had invented far more: a way to comfortably carry a fully functioning computer in one’s pocket.

    Mike Lazaridis, at the time co-head of smartphone pioneer Blackberry, watched the Jobs announcement in his fitness room and began to ponder. A smartphone that can download music, videos and maps? How could they do it without overwhelming mobile networks?

    Indeed, some of the first iPhone users complained of clogged networks. A year later Apple provided the iPhone with a faster 3G wireless connection. With the iPhone 3GS in 2009, Apple started the tradition of denoting small model alterations with the letter “S.”

    With the iPhone 4, Apple in 2010 again took a big step forward. The radical new design impressed customers with its the high-resolution screen.

    The iPhone went on to become a mega-seller and led to Apple becoming the most valuable company in the world. More than one billion iPhones have been sold in the product’s 10-year history.

    In the process Jobs reversed the power dynamic in telecommunications, forcing network providers to dance to his tune, rather than the opposite.

    The iPhone’s influence was challenged only by Google’s Android operating system, used by Samsung and many others.

    At the premiere a decade ago, Jobs referred to how the iPhone and its software were protected by patents. But these did not prove especially effective in a bitterly fought patent war.

    Apple saw only small legal success against Samsung, but could not stop Android. While the Google system runs on more than 80 per cent of all smartphones, Apple still takes the dominant share of profits in the industry. In 2014, current Apple boss Tim Cook and Google co-founder Larry Page ended the patent war.

    The enormous economic success of the iPhone led to environmentalists and human rights activists making Apple responsible for many of the industry’s woes. Greenpeace charged in 2007 that the iPhone was made with dangerous chemicals. Also, Apple above all was blamed for poor working conditions at Chinese subcontractor Foxconn – not other customers like Hewlett-Packard, Dell, Microsoft or Sony.

    And every September, when Apple unveils a new model, consumer watchdogs debate if it is really necessary to purchase a new iPhone.

    Jobs’ successor Cook has emphasised that environmental protection principles be respected and, if possible, only conflict-free raw materials used. He also pushed for better conditions in Chinese factories.

    The debate around Apple has become less about politics and more about whether the company is still capable of innovation after Jobs’ death. Jobs died on October 5, 2011, a day after Cook introduced the iPhone 4S.

    Cook’s performance can be considered in pure economic terms. The iPhone 6 launch in 2014 was especially successful, with holiday season purchases of the larger model driving up iPhone sales 46 per cent to about 74.5 million units sold.

    In the last year, iPhone sales fell for the first time since entering the market. Critics doubt if the iPhone 7, with few new features, can reverse the trend.

  • Samsung-Apple battle: the gap is closing

    Samsung-Apple battle: the gap is closing

    Samsung’s surprise surge in 2016 fourth quarter profit may further close the gap with its US competitor Apple.

    As the high-profile Samsung-Apple battle continues, the Korean company reported sales revenue of 53 trillion won (US$44 billion) with an operating profit of 9.2 trillion won, for an impressive operating margin of 17.36 per cent. The margin rose from 16.2 per cent in the second quarter of 2016 and represented its best result during the past two years.

    Apple has always led the Korean tech giant in terms of operating margin. In Q1 2015, the difference between the two companies was 18.82 percentage points, with Apple and Samsung reporting 31.51 per cent and 12.69 per cent, respectively. In Q4 of same year, the gap further widened with Apple reporting 31.86 per cent, and Samsung, 11.52 per cent.

    However, Samsung started catching up in 2016.

    Apple saw a continuous drop in its operating margin from 27.67 per cent in Q1 to 23.82 per cent in Q2 and 19.19 per cent in Q3, while Samsung saw its rate increase from 13.42 per cent in Q1 to 16. 2 per cent in Q2 and 17.36 per cent in the last quarter, although it did plummet in Q3 to 10.87 per cent as a result of the Note 7 crisis.

    Samsung’s prosperity in Q4 2016 was driven by a boom in its semiconductor business, improvement in display sales, and the success of its Galaxy S7 series, sources said.

    Apple has yet to disclose its financial results for the last quarter, but it is estimated that the company’s profit margin will come in around 20 per cent, with a slight improvement from the previous quarter, which will bring down the gap between the two tech giants to a record low of 3 per cent.

  • Samsung Vietnam reports massive loss following Galaxy Note 7 scandal

    Samsung Vietnam reports massive loss following Galaxy Note 7 scandal

    Samsung was forced to recall 2.5 million units globally. Samsung Electronics Vietnam (SEV), which produces the notorious Galaxy Note 7 in northern Vietnam, has reported a loss in the third quarter, coinciding with the withdrawal of the latest model of its smart phone.

    SEV, based in the northern province of Bac Ninh, incurred a loss of $122.6 million in the third quarter, down sharply from a net profit of $490 million a year ago, according to a recent statement from parent company Samsung Electronics.

    Samsung’s profits were hit following battery explosions on the Galaxy Note 7, causing the firm to suspend global sales and withdraw the smart phone from the market.

    A representative from SEV said the affects of the scandal were inevitable but declined to give further comment.

    In October, Samsung Vietnam said it had no plan to lay off employees in 2016 as a result of the parent company’s crisis and predicted the value of its exports would grow further from last year’s $32.7 billion.

    From January-September, SEV made a net profit of $1.04 billion, down 18.7 percent on-year.

    The South Korean giant also runs Samsung Electronics Vietnam Thai Nguyen in the northern province of Thai Nguyen and a number of other subsidiaries, which reported significant growth in the Southeast Asian nation in the third quarter.

    Phone exports are significant to Vietnam’s exports, with the value of 2015 shipments up by 27.8 percent at $30.17 billion, or 19 percent of the country’s total exports, customs data show.

    Just weeks after the roll-out of the Galaxy Note 7 “phablet” in September, Samsung was forced to recall 2.5 million units globally following complaints its battery was exploding while charging.

    With images of charred phones flooding social media, the unprecedented recall was a humiliation for a firm that prides itself as an icon of innovation and quality, and the timing of the crisis could not have been worse.

  • Fierce competition takes heavy toll on smartphone market in Bangkok

    Fierce competition takes heavy toll on smartphone market in Bangkok

    Thailand’s increasingly crowded smartphone market has wreaked havoc on handset companies’ profit last year, with Japan’s Sharp Corp becoming the latest victim to be quietly forced out of the market.

    Chinese handset maker ZTE Corporation, meanwhile, disputed rumours that the company has decided to pull out of the Thai smartphone market due to stiff competition.

    However, industry veterans believed more intense competition is around the corner this year.

    Sharp confirmed that the company is now inactive in the Thai smartphone market without providing a reason after resuming its presence here just one month ago through Commtiva Technology, a Taiwan-based distributor of wireless communication products.

    Oran Rungsereechaitrakul, former marketing manager of Commtiva (Thailand), said the company had just been verbally informed by its parent firm Commtiva that the group stopped selling Sharp mobile phones from Dec 30 last year.

    Lorna Liang, country manager for device of ZTE Thailand, said the company remains strongly committed to the Thai market despite facing fierce competition.

    “We are continuing business as usual. We have set long-term strategic plans to expand our presence in Thailand after entering the country less than two years ago,” she said.

    ZTE will still focus on the smartphone segment priced 3,000-7,000 baht apiece, where it has a particularly strong presence in Thailand, through distribution channels with mobile operators and retail shops.

    ZTE will roll out 2-3 smartphone models by March.

    Ms Liang also threatened to take legal action against those who spread or publish rumours regarding the company’s alleged business closure before checking with the company, saying spreading false information will cause consumers to lose trust and confidence in the company.

    According to internal reports by Huawei and Oppo, Samsung is clearly dominating the local smartphone market with a 40% share, followed by Apple with an estimated share of less than 15%, with Chinese brands Oppo and Huawei having a 12% and 8% market share, respectively.

    The growth of Oppo was particularly impressive as it rose quickly to become the third largest smartphone brand in Thailand in terms of sales volume for 2016.

    Consumers in this massive market are rapidly being won over by Chinese and household brands that incorporate much of the functionality of an Apple iPhone or Samsung Galaxy, but at a fraction of the price.

    Handset makers are also facing an undeniable shift in consumption trends in the digital lifestyle age.

    Samsung stayed on top of Thailand’s smartphone market last year, despite being battered by the Galaxy Note7 recall and increased competition from China.

    The Korean company recalled the Note7 in September last year after reports of overheating lithium-ion batteries. Replacement phones also ran into similar problems, leading the company to halt production of the smartphone in October.

    Samsung will continue facing stiff competition from Apple in the high-end smartphone market, while simultaneously facing pressure at the lower-end from Chinese makers.

    Overall, the Thai handset market grew by only 2% to 22 million units in 2016 — the smartphone industry’s slowest growth rate for a year.

    Chinese brands Oppo, Huawei and Vivo posted strong growth rates in sales even as Samsung and Apple saw their volumes drop. Other smaller players and newcomers like Asustek, Motorola, Lenovo, ZTE and France’s Wiko will pose competition to the giants this year, which would need to take measures to survive in the market.

    Taiwan’s HTC has already been forced out of the Thai smartphone market, while Sony and LG announced they will sell selective models here.

    Pairoj Thavornsapanant, assistant managing director of TG Cellular World, a leading mobile distributor, said product design and quality as well as strong sales and distribution networks are becoming critical for smartphone companies to succeed and survive in the country’s mature market.

    “Consumer acceptance of a smartphone brand is another vital factor in business success,” he said, adding that consumer acceptance is expected to take 3-5 years.

    Leo Zhao, sales director of Oppo (Thailand), said the local smartphone market has already reached a mature stage as the smartphone has become a must-have device in the digital era.

    Thailand’s smartphone market is expected to grow at the same pace as last year’s 2-3% to reach 25 million units in 2017, he said.

    Mr Zhao said the handset replacement cycle will be faster with Thais expected to replace their mobile phones every 10 months this year, compared with 12-15 months in 2016, because consumers take advantage more quickly of smartphone advances.

    The middle to high-end markets will continue growing faster than the entry smartphone market because consumers prefer superior user experience, faster connection and high-end specifications.

    High-end smartphones priced over 15,000 baht accounted for 6% of total sales in 2016, up from 3.5% in 2015.

    Entry level smartphones priced below 4,000 baht made up 40% of total sales last year, down from 50% in 2015.

    “Thailand’s smartphone industry will see more consolidation over the next few years and there will be less than 10 survivors in the local market,” said Mr Zhao.