A phone for all

Samsung is no longer a home appliance or semiconductor company. Over 46% of its revenue and almost 50% of operating profit come from mobile devices. It has dislodged Nokia and Apple from the top. Y.H. Lee, executive vice president, sales and marketing team, mobile communications, Samsung, tells Fortune India how the company is gearing up for intense competition. Edited excerpts:

Samsung has seen revenue contribution from its mobile business growing from 25.5% in 2009 to 46.2% in 2012. Will this disproportionate share change in the future?
There are times when one business unit performs better than others. Our TV business was No. 1 for many years. But we want to be No. 1 in all categories.

Where does Samsung go from here? What role will the company play in shaping the industry?
Samsung became the global leader in mobiles, including smartphones, in less than three years. This has been due to the Android-based Galaxy series. But there’s a hunger for innovation. This market was created by Apple, but now we feel it’s Samsung’s responsibility to create the next wave.

How do you protect your position, as your success is attributed to the Android-based Galaxy series?
Samsung believes everyone has the right to ask [for a certain type of phone] and we are ready to make it. Our R&D works to create such products. We have also adopted a strategy to use several operating systems. The market can ask for something else [other than Android]. But we are ready for the change and working on new products.

How does Samsung fight competitors when they are using the Android ecosystem as well?
Samsung has been making huge investments in the developer ecosystem. We have a Mobile Services Centre, with 2,000 people, which works only on this. The more devices we sell, the more developers we attract.

Once Google pushes its own hardware, what will Samsung’s approach to Windows Mobile be?
We have a good partnership on Windows not only in mobiles but also in notebooks and PCs. Windows Mobile is good, but not as strong as Android at the moment. If there’s demand, we will move fast. If Google decides to bring more phones, we will find our own way.

Apple is getting aggressive in India. How will it affect Samsung’s approach to the market?
Our distributor-retailer model has worked well. So we won’t change just because someone is getting aggressive. We are taking our phones closer to consumers. Let people touch, feel, and understand what’s good for them.

In an age of smartphones and tablets, how important are feature phones? How much does India influence product development?
Feature phones still sell in India, and even in Korea and the U.S. It isn’t about affordability but simplicity—a phone and nothing more. Although smartphones are a bigger part of our turnover and profitability, we will sell feature phones as long as there are customers. They may eventually upgrade to sophisticated phones. Our Indian R&D centre has developed products, like the Rex series, for global markets.

What’s the sweet spot in pricing?
Samsung adds value and commands a premium. Consumers are smart, and know what’s better. We believe in this rather than play the pricing game.

A big range raises the fear of cannibalisation and prices crashing...
Cannibalisation might happen, but having a sizeable portfolio is our goal. We do not want to miss any opportunity. There has to be a balanced effort to reduce prices and offer variety.