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Samsung targets No. 2 mobile vendor spot, plans big retail push

Samsung targets No. 2 mobile vendor spot, plans big retail push

Bangalore: In an attempt to be the No. 2 mobile vendor in India by the end of next year, mobile phone maker Samsung Telecommunications India Pvt. Ltd is reviewing its distribution strategy, looking to leverage its manufacturing facility in the country, and continuing to focus on high-end feature-rich phones. The company aims to double its market share from the current 7% to 15% by the end of next year.

The wholly owned subsidiary of South Korea’s Samsung Electronics Co. Ltd recently hired Sunil Dutt, the former sales director of Nokia India Pvt. Ltd, the country’s top mobile vendor, to head its operations. India had more than 217 million mobile subscribers, including both GSM and CDMA, at end of October, according to telecom regulator Telecom Regulatory Authority of India.

“My objective is to have Samsung mobile phones available at every handset retail outlet across the country. My estimate is that there are 35,000 retail outlets where Samsung phones are currently sold. The goal is to have 50,000 or more retail outlets by the end of March," said Sunil Dutt, country head, Samsung Telecommunications India.

According to Voice&Data magazine, in 2006-07, Samsung was in the fifth position in terms of mobile phone sales in India with a market share of 5.6%. Nokia (53.6%), Motorola (11.1%), LG (11%), and Sony Ericsson (6.5%) were ahead of it, and in that order. Globally, Samsung is at No. 2 position behind Nokia, accounting for 14.5% share of the 289 million phones sold in the July-September quarter, according to Gartner. “Our first priority is to take Samsung in India to the No. 2 position that we enjoy globally," said Dutt.

Samsung Telecommunications is looking to redefine its distribution and retail strategy. Bangalore-based United Telelinks distributes its products in the south, while Delhi-based Telemart Communication (India) Pvt. Ltd handles distribution across the rest of the country. Samsung is now looking to expand its network of secondary distributors or redistributors; these distributors are the ones that reach out to retail outlets and service them. “In the next two weeks, we will be re-evaluating the entire distribution network. Once we add more re-distributors, we shall reach more retail outlets," Dutt said.

The company could still find it difficult to meet its target of doubling market share. According to IDC’s India Quarterly Mobile Handsets Tracker, the total number of mobile handsets shipped in 2006 was 60.62 milion and for 2007 it is expected to be 80.28 million. The year-on-year growth in mobile phone shipments is expected to be 32.4%. Samsung’s competitors such as Nokia, Motorola India Pvt. Ltd and Sony Ericsson Mobile Communications have a larger retail presence.

At the end of March, Nokia had a distribution network of more than 90,000 retailers, of which around 30,000-35,000 were single-brand shops that exclusively sold Nokia products. Motorola had 31,000 retail stores across 250 towns and Sony Ericsson had 15,000 retail outlets.

Dutt said he is also keen to leverage the manufacturing facility of Samsung India Electronics Pvt. Ltd located at Noida near New Delhi; this facility has the capacity to produce six million GSM handsets a year apart from other consumer electronic products.

Samsung said it has chosen not to focus on ultra-low-cost entry level phones but on models with more features such as colour screens and FM radio. “We find the market for handset replacement and upgrade to high end or feature mobile handset growing remarkably. We would like to be the preferred brand for such consumers," said Dutt.

Dutt added that phones that are not tied to specific operators offer a significant opportunity for Samsung in the CDMA market. Last month, the company launched its first open market CDMA handset, Samsung MAX.

The company, Dutt said, is also looking to launch seven- eight new handsets in the next three months. These phones will mainly be high-end camera phones, business phones and designer phones.

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