Due to the slumped sales of the Galaxy S5 and the Galaxy Note 4, South Korean smartphone maker Samsung has decided to start slashing its phone line-up by 30 percent in order to alleviate the company’s financial loss, which has brought the largest smartphone maker in the world to its knees. With the 30 percent smartphone line-up reduction, the company will still be rolling out at least a dozen different smartphone models.
While Samsung enjoyed a torrent of profits during the earlier stages of 2014, the company started performing terribly in the smartphone market, against the predictions of the smartphone populace, which expected the company to rake in substantial profits shortly after the release of the Galaxy S5. However, thanks to the emergence of different smartphone companies such as Xiaomi, Huawei, and Lenovo; who are producing fast, reliable and most importantly, cost effective devices, it has becoming increasingly difficult for Samsung to compete at that pricing level.
Furthermore, Lenovo’s acquisition of Motorola ended up making it the 3rd largest smartphone making entity in the world, reducing Samsung’s global smartphone market share even further. Samsung is following in the same footsteps as its other smartphone competitor HTC. While going through a successful profit run, HTC’s market cap declined due to overwhelming competition, which forced the company to start producing a lower array of handsets in order to quell the financial losses that were being endured by the company.
Only recently, Apple has selected Samsung to be the company’s primary producer and supplier of application processors that are going to be incorporated in to upcoming shipments of iPhones and iPads. According to the Korea Times, the production of these chips is expected to start in 2015 and is considered to be a multi-billion dollar deal; which is exactly the kind of break that Samsung needed.