Samsung is making a strategic push to regain its lost market share in China by developing a suite of artificial intelligence features known as Galaxy AI, specifically designed for the Chinese market. TM Roh, head of Samsung’s mobile business, shared insights with CNBC on this initiative, emphasizing the company's focus on leveraging AI to attract Chinese consumers.

Strategic AI Development for China

Samsung launched Galaxy AI this year with its S24 smartphone series as part of an effort to encourage users to upgrade to premium handsets. On Wednesday, the company unveiled two new foldable smartphones featuring advanced AI capabilities, continuing to build on its technological advancements.

Despite these efforts, Samsung has struggled in China, the world’s largest smartphone market. Currently, Samsung's market share in the region sits below 1%, with local competitors like Huawei leading the market. Samsung's previous attempts to revamp its strategy in China have seen limited success, but the company is now pinning its hopes on AI to deliver the features needed to win over Chinese consumers.

Focus on Localized AI Features

“We are especially developing and we are going to especially develop our Galaxy AI capabilities for that market,” Roh said, highlighting Samsung's commitment to creating mobile AI tailored to Chinese consumer preferences. This strategy involves working closely with local tech and internet companies to integrate AI features that resonate with Chinese users.

One example of this collaboration is Samsung’s partnership with Baidu, which integrated its Ernie chatbot into the Galaxy S24 smartphones. This partnership demonstrates Samsung’s approach to leveraging local expertise to enhance its AI offerings in China.

Challenges and Market Competition

The development and deployment of AI in China come with unique challenges due to strict regulations and Beijing’s control over the internet landscape. Foreign firms like Samsung often need to partner with local companies to navigate these complexities successfully.

Samsung is not alone in facing these challenges. Apple, which also announced its Apple Intelligence AI suite, has yet to launch these features in China, likely due to similar regulatory hurdles.

Expert Insights and Market Conditions

Francisco Jeronimo, vice president for devices research for Europe, the Middle East, and Africa at IDC, expressed skepticism about the impact of Samsung's AI introduction in China. “The introduction of AI features to China won’t make a massive difference to its fortunes as brand awareness of Samsung is too low and Chinese players are also introducing rival applications,” Jeronimo said. He questioned what unique offerings Samsung could bring to the market that would persuade Chinese consumers to switch from their Huawei, Xiaomi, or Honor smartphones to a Samsung device.

Roh acknowledged the intense competition in China, noting that the smartphone market there is “more heated than anywhere else.” Samsung’s strategy revolves around introducing premium devices to the market and expanding its distribution and retail sales channels. “Currently, although piecemeal, we are making progress step by step, we are putting together our efforts to create the products and features that will be wanted by the consumers and that can satisfy the consumers out there,” Roh added.

Conclusion

Samsung's focused development of Galaxy AI for the Chinese market represents a significant strategic effort to reclaim its position in the world’s largest smartphone market. By partnering with local tech firms and tailoring AI features to meet Chinese consumer demands, Samsung hopes to overcome its current market challenges. However, with fierce competition and stringent regulations, the success of this strategy remains to be seen.

Also read : Indian Stock Market Hits All-Time Highs on July 12: Sensex and Nifty 50 Surge

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst & Finance Saathi Telegram Channel for Regular Share Market, News & IPO Updates

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX & Upstox.