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Posted : 2013-06-19 17:25
Updated : 2013-06-19 17:25

Samsung faces tablet hitch in US market

By Kim Yoo-chul



Samsung Electronics is struggling to get a foothold in the United States tablet market due to its lack of understanding of customers there, according to market analysts.

The Korean electronics giant has enjoyed sustainable growth in the smartphone and tablet business across the world on the back of robust sales of its Galaxy devices. However, the firm has yet to expand its tablet market share in the United States where Apple currently dominates.

While Samsung hasn’t cracked the U.S. tablet market yet, Samsung officials and analysts are confident that the firm will achieve 33 million in tablet sales globally this year, up from some $15 million last year. Galaxy tablets are selling well in South America and Eastern Europe.

Strategy Analytics (SA), a leading market researcher, said the Korean company sold a total of 9.1 million Galaxy tablets in the first three months of this year, up from 2 million during the same period a year ago.

During the January-March period, Samsung’s global tablet PC share reached 18.9 percent, up from 7.6 percent during the same period last year. The impressive performance is mostly based on good sales in Eastern Europe and South America.

In Eastern Europe, Samsung leads the tablet market with a 33 percent share, followed by Apple, SA said. Samsung also led in this market with a 31 percent share last quarter, up from 19 percent during the same quarter a year ago.

Some critics and market analysts say the firm’s tablet business is a “half success” because it is still struggling to compete in the United States, which the firm considers to be its most important market.

“Samsung’s tablet share in the U.S. is hovering around 13 percent, well below Apple’s 50 percent. Our technicians and management are now trying to come up with a different approach,” said one Samsung source by telephone, asking not to be named.

Industry sources also cite higher retail prices, lack of competitive content, lower royalties of the Google Android software and Americans’ preference for Apple’s iOS user interface as major challenges for Samsung.

“Consumers in the United States just use tablets as a plaything. They just purchase goods via online shopping malls and play games. Samsung should think about simplicity not complexity if it wants to grab the minds of U.S. consumers,” said Lee Jay-yoon, an analyst at Kium Securities.

“Samsung needs to expand its budget tablet lineups if it wants to get a greater share in the United States. That means some unnecessary features on the general consumer side should be removed strategically. More budget tablet variants doesn’t mean less brand awareness. Samsung’s brand power has increased in the United States,” said Lee.

According to industry sources, Samsung focuses on hardware, something that tends to turn American consumers off. A Samsung insider, surnamed Park, says the company stuck to its old-fashioned marketing style that focuses on hardware, but notes that this strategy “hasn’t been very effective.”

Samsung Electronics plans to roll out more tablets rather than release more variations of the Galaxy smartphone next year. The company hopes the strategy will solidify corporate brand awareness by combining the minds of consumers with Samsung devices.

 


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