Samsung on Thursday said it is confident that the trend of consumers moving towards premium products as well as focus on 5G phones will continue to drive strong revenue growth for the company this year.
The comment comes at a time when the overall consumer demand for smartphones remains weak. Basis this, there is a pile up of inventory across channels, thereby leading to weak shipments to dealers/retailers for the smartphone companies.
“We will be cautiously optimistic on the shipment numbers, but we are very optimistic on the overall revenue growth,” Raju Pullan, senior vice president of mobile business at Samsung India, told FE.
While Pullan did not share any growth targets, he added, “we will be sensitive to driving category growths by premiumisation across price points. It’s a huge operating market. We will be ahead of the industry published growths on revenue”.
In FY23, Samsung’s revenue from mobile phone business was at Rs 70,292 crore, a growth of 27% year-on-year. In FY24, the company is expected to see another strong revenue growth, according to analysts. One of the reasons for that is an increase in average selling price (ASP) of smartphones, especially owing to an increase in share of the premium segment smartphones (above Rs 30,000).
According to market analyst firm IDC, the overall ASP for the mobile phone industry hit a record of $255 (around Rs 20,000), up 14% YoY in 2023. Samsung, which is the market leader with an 18% market share, touched a record high smartphone ASP of $338 (Rs 27,000) in 2023.
“We are available at every price point. This helps to upgrade the consumer. We have seen consumers move directly to 4G and even 5G from 2G as well, and that’s at the back of affordability,” Pullan said.
Currently, 5G phones contribute about 61% of the overall smartphone portfolio of Samsung, which is higher than the industry average of 52%. “We will have segment leaders in every category and that will be led by our 5G first approach,” Pullan said, adding that consumers are upgrading because of flagship features and technology at affordable rates, long tenure EMIs, and easy finance schemes.
On Thursday, Samsung launched Galaxy A35 5G and A55 5G phones with multiple memory variants starting Rs 27,999, and going up to Rs 42,999. Among key features, the company added AI-enhanced camera capabilities, and Samsung Knox Vault- which is a feature offering protection against software and hardware attacks. With the launch, the company has about 20 smartphone models active in the market.
Currently, Samsung has a 31% market share in terms of volume, in the Rs 30,000-50,000 segment.