Samsung hopes giving priority to premium will win the day

Undaunted by competitors, the South Korean manufacturer believes it can tempt UK users

It’s easy to see that the Note 9 launch last month could not come soon enough for Samsung following a rough second quarter of the year.

It’s been well documented the South Korean manufacturer has found it hard to maintain success and with Apple continuing to sustain a strong market position before the launch of the next iPhone later this week, the success of Huawei is inconvenient for Samsung to say the least.

Samsung itself said that the S9 had not performed well, characterising the last quarter as “slow”.

However, in the UK at least, Samsung vice president of IT and mobile in the UK and Ireland Conor Pierce says business at Samsung is great.

“The UK is such an important market for us – a lighthouse market – and winning the UK is of paramount importance, but it is also a challenge for all players in the industries.

“Economically, there were 6,000 stores closed last year, consumer confidence is down, and people are hanging on to their devices longer – up to 31 months.

“So, it’s difficult and there are strong headwinds for everyone, but even with that in mind we’ve continued to grow our premium share and actually doubled our premium space in the UK.

“The S8 and S9 have done very well as a couple and one thing that we have done in the past is be very focused on flagships whereas now we are much more focused on overall premium and the Note 9 coming into this portfolio is really going to help us.”

Market Share

With rising handset costs now tipping over the £1,000 mark, one such way in which Pierce believes Samsung can grow its market share in the premium end is through a two-pronged strategy revolving around poaching customers from Apple and promoting the alternative ways to pick up devices from the premium portfolio.

According to statistics from Magpie the total cost of ownership for a Galaxy S9 has depreciated roughly 25 per cent when bought through the networks. Couple that with the poor overall Q2 results and a picture starts to emerge of a device that has not quite resonated with consumers.

“I think it’s in the interest of everyone to upgrade their handsets,” said Pierce, “but its our responsibility to make sure we have the most compelling designed phones and the best features, which we do in our portfolio.

“But we need to recognise that maybe there is an affordability issue and a reassurance issue. We are addressing affordability through having an early upgrade programme, so if you go and buy a Note 9 today, in 12 months’ time, if you use the early upgrade programme, we will take the Note 9 off you and give you another device. So, every year you have a refresh, which is one way to ensure you’ll always have the latest device.

“We also offer advanced trade-in and a zero per cent finance package so consumers can get the device and spread the price of the device out over a period for no added cost.

“We are trying to address the affordability issue to make sure people have the opportunity to upgrade because I think there is a genuine appetite or crave to have the latest. With the economy the way it is and maybe the apathy within the business, we are just trying to break that down.”

Reassurance

Unusually, one manufacturer that seemed to slip under the radar in the second quarter financials was Apple, which marginally lost a piece of market share and didn’t quite hit the same shipment sales as the year before, but with the latest iPhone days away that is of little surprise.

Yet with headlines of pricing and value mainly being directed at the Californian giant despite the total cost of ownership topping £1,000 for the S9 and Note 8 at launch – Apple has maintained a healthy slice of the market that Pierce has his eyes on.

“The reassurance is more about people moving over from iOS to Samsung. In a saturated market it is all about acquisition and retention, net promoter score is strong and premium loyalty is very strong. We have doubled it in the last two year so we know we have happy consumers.

“However switching from iOS to Samsung is something that people need to consider now but what we need to do is reassure them, so we have an on boarding programme and put a team in place which basically acts as a concierge.

“A lot more are considering moving than ever before so we engage with them and we help them through the process and once they have made the decision to switch we talk them through that and help them switch their data. It’s very seamless. People have an irrational fear more than anything else.”

Enticing

With the strategy for the retail landscape set out, focusing on individual devices and how to make premium as alluring as possible, in B2B, Pierce said that business will be driven by the appeal of the Knox security proposition as well as enticing more sales of DeX.

Alongside a strong relationship with the public sector which will see Samsung provide devices to front line responders as part of the Emergency Service Network (ESN) rollout and continue to increase the bobbies on the beat using Samsung devices, the Korean manufacturer will be pushing the security platform as well as the DeX system that allows users to run a computer-like system through their phones.

“Fifty per cent of the UK police force are using a Samsung device, obviously we won the ESN through the home office and we have a strong proposition there.

“I think that is enhanced by Knox, but also the durability of our devices and the ease of use of our device and we are very focused on making sure that we continue to drive that business.

“Knox is one of the most secure solutions that is available on the market. That’s why police officers and banks and the home office are using our devices so I think we should really leverage that and make sure to have a strong proposition in SME in particular.”

“When it comes to B2B, I suppose we have an unpolished gem in Knox and DeX so that’s probably something that we can do better, helping people understand the value of DeX an, again, I think the Note 9 will help.”

Huge Opportunity

According to the Samsung UK enterprise sales director Suzanne Homewood, Samsung have such a proposition to kick on in the B2B industry.

The recent evolution of smartphones and their capabilities have undoubtedly created some interesting ideas as to how to survive each day without breaking your back carrying kit, and the sales director says that businesses “getting rid” of paper is a huge opportunity, especially for DeX.

She said: “The real traditional industries in the UK are starting to transform in a very, very different way and we are seeing continued growth in B2B particularly but at both ends of the market from small business to the larger end of the market enterprise.

“I have been in B2B for a long time and there’s been a transformation in the way we use our devices revolving around digital usage and the mobile digital access of data and information.

“Seeing businesses transform how they work, and especially in some of those markets where profitability is tough because you’re chasing that customer experience, means they actually need to use technology in a really different way to respond to customers and help staff work in a different way.

“Our devices help businesses to access information quicker. For example, with rail, you think about train drivers – they have stacks of paper and if they need to use the manual they are flicking through paper.

“The reality now is with better and larger screens you can get that information much quicker on our devices.”

Flexibility

One area that Samsung are touting to provide that efficiency to enterprises is their products around the device.

With the introduction of DeX, Samsung has taken an approach of making their devices central to everything we do in the last year or so.

Such an approach is apparent in the enterprise dealings as well. Working environments that revolve around rows and rows of monitors are becoming less apparent and new ways getting the most out of employees have been flying around, be it bring your own device, limiting usage or access from 9am to 5pm or when the device is in the office.

According to Homewood, DeX is one such solution to the question of how to bring flexibility to the work force.

“You’ve probably been into corporate office spaces, they’re very different these days, they’re not the rows and banks of offices and desks. With Dex, it’s a much more creative environment.

Functionality

New features on the Galaxy Note 9 also adhere to this way of working. Naturally, the DeX system only works with the premium end of the portfolio and new functionality built into the Note 9 has uses in the enterprise space.

From taking better important images, to assigning the S Pen button to control a presentation, the Note 9 especially seems to represents the theme set out by Homewood of getting rid of paper, citing the success of the South Korean manufacturer with the police.

“For all of the market, Note 9 is a great device because it’s all about enabling productivity and efficiency.

“I think for small business who want to be creative, whether it’s social media and taking photos of the products, engaging with customer, the pen, the quality of the camera enables them to do that.

“Then if you go into the bigger enterprise market, we’ve had loads of success with the police for example. If you’re unfortunately caught speeding, a lot of the forces are using the Note devices to capture details and check their systems.

“I do think that the Bluetooth pen is going to create more and more use cases for our business customers, in terms of flexibility, and then, of course, DeX is a simple way of being able to use a PC experience in a very different way.”