Big step for Samsung; can they take on Chinese rivals

When Finnish phone-maker Nokia had their big fall from grade, South Korean Samsung Electronics was sitting pretty. The company was proving to be Apple Computer’s biggest competitor in the high-end smartphone space, Samsung’s series of high-end Galaxy S smartphones have been the iPhone’s biggest rivals for years.

In India, Samsung became the top-dog in the smartphone space just as the market boomed. Some Indian firms, such as Micromax also got in the game by importing devices from China, many of them from a company known as BBK Electronics. For a while, these Indian brands were Samsung’s biggest competitors.

But the Chinese firms got wise to Indian importers and entered the Indian market on their own. And today, BBK Electronics’ three brands Oppo, Vivo and OnePlus along with China’s new consumer electronics giant Xiaomi have come to dominate the Indian smartphone market thanks to a combination of huge advertising spending as well as affordability. Xiaomi with their low-cost RedMi brand dominates the Indian smartphone arena today.

Can manufacturing big in India help Samsung’s cause? Yes, thanks to a couple of reasons. Samsung’s huge Rs 4500 crore investment in India will allow them to use Indian nationalism, a seeming favorite of marketers now as a selling point.

It is also likely that there will be further lobbying for tariffs on cheaper imports, although the Chinese brands are doing basic device assembly in India as well. More positively, this could also lead to a rush in smartphone manufacturing in India as with the Samsung plant, new new fabs for screens and chipsets are also likely to come to India, giving more value-addition to devices made in India.

India is the second-largest market for smartphones in the world and after Reliance Jio announcing a new data broadband services, data usage which has already quadrupled in the past year is expected to grow even further and will drive demand for more smart devices.

Samsung with their new facility is well-positioned to take advantage of market opportunities with their new factory that the Chinese firms may be unable to.