SEOUL -- Samsung Electronics plans to downsize its smartphone lineup and unveil low-priced models this year as it tries to navigate a market buffeted by the rapid advance of cut-rate models.
The South Korean electronics giant on Thursday reported a 32% plunge in operating profit and a 10% drop in sales for 2014, citing the sluggish performance of the smartphone business, which accounted for some 70% of profit.
Samsung currently sells dozens of smartphone models, ranging from high- to low-end varieties. It will reduce new releases this year by a fourth or a third from 2014 -- it has not said exactly how many it will release. Making more of each model it does sell will help reduce procurement costs and make it easier to control inventory.
Several years ago, when only a handful of smartphone manufacturers dominated the market, Samsung's strategy to offer a broad lineup proved successful. As a result, its global market share in smartphones is now double that of Apple.
But an influx of new players has begun to change the landscape, as they have introduced high-performance models with lower price tags. China's Xiaomi is one of them. Its top model, the Xiaomi Mi 4, is priced at about half that of Samsung's Galaxy S5 in the Chinese market, but the price difference is greater than the disparity in performance, many say.