Samsung Electro-Mechanics will expand its rear camera module business to mid- to low-end smartphones. It will broaden the scope of the business centered on flagship smartphones like the Galaxy S series.
Profitability is unlikely to be worse, as mid- to low-end smartphones are also equipped with high-specification products with more than 13 million pixels. The global mid-low-end phone market is much larger.
According to related industry, Samsung Electro-Mechanics supplied rear camera modules to Samsung Electronics’ mid-range smartphone Galaxy A series A5 and A7 released in January this year. This is the first time that Samsung Electro-Mechanics has supplied a large number of rear camera modules to Samsung’s mid-range smartphones. Samsung Electro-Mechanics supplied rear camera to the old Galaxy A series before, but the volume was low.
The reason for widening the range of mid- to low-priced phones is due to the trend toward “High-spec of low-end phones.” The higher the part specification, the higher the unit cost. Samsung Electro-Mechanics seems to have judged that the mid to low-end camera business is well-positioned.
Even in terms of market size, the mid to low-end smartphone market is much larger. The flagship smartphone market is saturated. Growth is slow. On the other hand, the mid to low-end phone market will continue to expand, centering on emerging countries.
According to market research firm Strategy Analytics, the portion of mid- to low-end smartphone sales has steadily increased from 2010 to last year, surpassing 60%. The proportion of high-priced premium smartphones continued to decline. In the US market, flagship smartphones account for a large portion, but emerging economies have a high proportion of low-end smartphones.
Samsung Electro-Mechanics core customer Samsung Electronics’ premium smartphone shipments also declined. According to Hana Financial Group, Samsung Electronics’ premium phone shipments accounted for only 29% of total sales in the first quarter. This is the lowest since Samsung Electronics started its smartphone business after falling to 50% in the first quarter of 2014 and 40% in the first quarter of 2015.
“While maintaining the existing flagship smartphone camera module business, we plan to expand our product range by expanding the low-end rear camera business,” an official from Samsung Electro-Mechanics said.
The company is expected to widen its base with mid to low-end cameras, which will also affect the back-end ecosystem. Originally, medium and small sized companies were the major suppliers of mid and low priced rear camera.
An industry observer said, “Although there will be no big impact in the short term, when Samsung Electro-Mechanics expands mid-range and low-end phone rear-end cameras, competition will become more intense.”