Technology

Cellular sales: Samsung and Motorola take advantage of the recession

January 14, 2019

“For cell phone manufacturers, the year will be the worst in volume since 2004, 14 years ago, with 8.5 million shipments this year, against 7.4 at that time,” says consultant Enrique Carrier. The impact of the crisis in a key sector within consumer electronics, these figures, however, hide very profound changes that are occurring in the country and around the world.

In principle, the Argentine market is strongly concentrated in two brands: 3 out of 4 cell phones sold are from Samsung and Motorola. For its part, the Chinese Huawei and Korean LG are in the process of restructuring “after reaching values ​​of participation far below expectations,” says Carrier.

The crisis, on the other hand, delayed the landing of Nokia, scheduled for mid-2018. It is an emblematic brand, whose exclusive license is in the hands of Fueguino manufacturer Solnik. “Our plans did not change. We started manufacturing this month and we aim to occupy a leading position towards the end of the year, “explained Juan Pablo Baiardi, the company’s CEO.

The central fact of the category is that the crisis partially halted sales. “The one who had decided to buy a cell phone, ended up buying it, but keeping the budget,” explained a source from a commercial chain. Therefore, with the rise in prices (almost 48%), added to the increase in credit, “the high-end segment was impacted and the mid-range models grew a lot,” said Germán Greco, Motorola executive, who today belongs to the Chinese group Lenovo.

This slide towards lower value products favored the two leading brands, which strengthened their mid and low-end portfolios in 2018. “There are shifts in categories and we are pointing, naturally, downwards”, says Bruno Drobeta, director of Samsung Mobile. The executive also points out that they complemented this strategy with consumption incentives, such as “a plan for the exchange of used vehicles” and “sacrificing profitability”.

The impact of the devaluation in the segment is much greater than in other categories of electronics. However, Drobeta stresses that the most damaging is the lack of funding. On this point, he says, it is very difficult to make projections. Although it coincides with the forecast of 8.5 million units for this year, the executive insists that there are many variables that could change that scenario. “If the rate goes down and the plans come back in 12 installments, the market could grow much more.” Thus, the possible range of sales ranges between 6 and 10 million.

In spite of everything, the two leading brands ratify the launch plan for the year, which includes high-end products and, above all, the flagship models, the most expensive.