Sales of Samsung's smartphones have fallen to their lowest point in over three years, forcing the market leader to order a total revamp of its operations.
Samsung's net profits from mobile fell 73.9 per cent in Q3. Its smartphone market share fell from 33 per cent last year to 24 per cent. Overall company operating profit declined by 60 per cent.
Apple, Xiaomi, Lenovo and LG, however, all saw handset sales grow in the last quarter.
The Galaxy S5 has fallen short of expectations amid increased competition from cheaper Chinese handsets, and the company admits it was not quick enough to respond”.
Samsung's traditional model is to offer a wider range of models than rival Apple, and currently offers or is developing a huge assortment of devices such as the Galaxy Note 4, Galaxy S5, Galaxy Note Edge, Galaxy S5 Mini, Galaxy Round, Galaxy Alpha, Galaxy Mega, Galaxy Young 2 and Galaxy K Zoom.
It now intends to shift its focus to low and mid tier devices and offer fewer devices with more standardised components.
High-end smartphone sales result was somewhat weak,” Samsung mobile's senior vice-president Kim Hyun-joon said. We will fundamentally reform our product portfolio.
"The mid-to-low end market is growing rapidly, and we plan to respond actively in order to capitalise on that growth.”