Touch screen phones set to drive Samsung growth

Samsung, the second largest handset manufacturer in India, has said that the contribution of touch screen phones to its revenues would surge by 10% this financial year from 2-3% last year, largely driven by youth segment. The company's current touch screen market share in India is around 45-50%, which is higher than the numero uno player, Nokia.

Samsung India, which surpassed Sony Ericsson in market share in May this year and secured the number two position, is betting high on its touch screen portfolio. "We wish to make Samsung the top brand and number one electronic company in India," said JS Shin, president and CEO, Samsung.

The company currently has nine touch screen handsets in its kitty--much higher than Nokia which currently has three. These touch screen phones are priced between Rs 11,100 and Rs 33,990. According to analysts, the touch screen devices sale this year is estimated to be around 1.2 million and the company is prepared to harness the opportunity. Samsung India has set a target of doubling its volume by year-end by focusing more on its touch screen phones. It plans to add more devices across the segments (low, medium and high).

Declining to share any specifics on the investment figures, Sunil Dutt, country head, mobile business, Samsung India, told FE: "We spend around 8-9% of our global revenues on the RandD activities in India." The company has two RandD centres in India, in Noida and Chennai. Moreover, Samsung is also targeting to increase its total handset market share by 5-6% by the end of this financial year from the early double digit.

As per the latest Gartner's report, Samsung's touch screen devices, qwerty phones and smart phones drove sales in mature markets. The trend is expected to continue in the second half of 2009 to close the gap with Nokia.

Samsung this year has launched around 27 new handset models and will be launching 13 more products by December. During the economic crisis, the handset manufacturers saw decline in average selling price (ASP) and the phenomenon accelerated in the first half of the year. This particularly affected manufacturers that focus on mid-tier and low-end devices, where margins are already slim. But according to Dutt, the company doubled its ASP during the same period.