While we all know Samsung and LG as South Korean companies that happen to be big here in North America, it’s sometimes easy to forget that they are global forces. Samsung is of course Samsung, which means that they have a stronghold in the majority of markets all over the globe, but for LG, markets in Europe and Latin America represent a large portion of their market. For these two South Korean rivals, the downward slump in the Brazilian smartphone market could start to hurt their bottom line, as the top two smartphone manufacturers in the region.
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As Business Korea is reporting, there was a 1% decline year-on-year this April compared to last year, despite somewhere in the region of 4.85 Million smartphones being sold. A month later in May, 3.89 Million smartphones were sold, delivering a 16% decline year-on-year. On the whole, analysts are predicting a contraction of the market by as much as 12% this year. As a growth-leading market, the fact that Brazil’s smartphone market is slowing could be cause for concern for Samsung, LG and of course Motorola as well. For Samsung, a company at the top of the market, new and emerging markets like Brazil were providing the company with new areas for growth, and a slump could put their plans into disarray.
During Q1 of 2014, both Samsung and LG accounted for 52.4% of the Brazilian smartphone market, during Q1 of this year, that number fell to about 40% or so. LG saw their share of the market fall from 15% to 10% while Samsung saw a decline of 10%, leaving them with 30% or so of the market. In Brazil, the national economy is far from booming right now, and this will of course have an effect on the amount of money that people can afford to spend on what are essentially luxury items. The Motorola factor could be making a small dent here as well, as the Moto G and Moto E have proven popular in regions throughout Latin America. Plus, these are devices that feature up-to-date software and speedy updates, giving users one less reason to update quite as often as they used to. Either way, it looks like LG and Samsung will have to formulate some sort of response if they want to continue their successes in the region.