Olympics delay offers setback to Samsung’s plans to win over Japan market


SEOUL (Reuters) – For Samsung Electronics Co Ltd (005930.KS), the 2020 Tokyo Olympics had been going to be its springboard to achieve a long-held purpose – making vital inroads into Japan’s profitable smartphone market the place Apple Inc (AAPL.O) dominates.

A girl makes use of her smartphone as an electrical display screen displaying logos of Tokyo 2020 Olympic Video games and Galaxy, a model title of cell computing gadgets by Samsung Electronics and worldwide smartphone accomplice for the Video games, at Galaxy Harajuku in Tokyo, Japan March 26, 2020. REUTERS/Issei Kato

However after the Video games had been postponed to 2021 because of the coronavirus pandemic, the long-time sponsor’s advertising and marketing plans – centered on its new S20 smartphone now out too early – have gone awry.

The delay may imply the South Korean tech big has misplaced an important window of alternative. It had been anticipated to tout its 5G functionality in its Olympics adverts, aiming to draw a inhabitants excited to look at the Video games with cutting-edge know-how earlier than Apple had a 5G product available on the market.

“Samsung was eager to make use of the Olympics alternative to get it proper in Japan. In that sense, it’s a foul scenario,” an individual conversant in Samsung’s operations informed Reuters, noting that Samsung and different sponsors must regulate plans.

“Lots of the momentum for smartphone demand within the lead-up to the Olympics may also be gone,” mentioned the individual, who was not licensed to talk on the matter and declined to be recognized.

Former Samsung officers and analysts mentioned Samsung will possible return to the drafting board to advertise a brand new flagship telephone due out subsequent 12 months.

When requested in regards to the influence of the Olympics postponement on its technique for the Japan market, Samsung declined to remark, saying solely it could proceed to present progressive know-how for Japanese clients no matter when the Video games begin.

Samsung could be the world’s No. 1 smartphone maker by quantity but it surely has only a fraction of the Japanese market.

In distinction, Apple which first started promoting the iPhone in Japan in 2008, gained share because of an aggressive promoting and pricing marketing campaign from SoftBank (9984.T) – on the time its sole distributor. Japan has since turn out to be a loyal premium market and key revenue heart for the U.S. agency.

Apple at present instructions 53% of the Japanese market, Sharp Corp (6753.T) has 12% and Sony Corp (6758.T) has 7%, in line with Counterpoint Analysis. Samsung, which has misplaced floor since 2013, has 4%.

HARAJUKU HOPES

Indicative of Samsung’s struggles was its 2015 resolution to drop its title from smartphones offered in Japan and simply go together with Galaxy branding – the one market the place it does so. It’s a transfer some analysts attribute to historic tensions that always flare up between South Korea and its neighbor.

“I consider they did so because of the rising variety of Japanese customers who take political elements under consideration of their buy concerns,” mentioned Shengtao Jin, a analysis analyst at Canalys.

In its run at Apple’s stronghold, Samsung had laid the groundwork for a concerted marketing campaign.

In March final 12 months, it opened the world’s greatest Galaxy retailer in Harajuku, Tokyo’s in style buying district for youth style and popular culture. Boasting eight flooring, the glitzy constructing has an exterior adorned with greater than 1,000 smartphones. Samsung’s cell and community division chief Koh Dong-jin, officers from the Worldwide Olympic Committee and Tokyo 2020 organizers attended the opening ceremony to mark 500 days till the Video games.

Then in Could, Samsung’s inheritor and de facto head, Jay. Y Lee traveled to Japan, assembly with executives from cell carriers NTT DoCoMo Inc (9437.T) and KDDI Corp (9433.T) to debate 5G cooperation.

DoCoMo and SoftBank Corp (9434.T), the home telecom arm of SoftBank Group, are at present rolling out 5G providers. However the delay of the Video games means 5G isn’t anticipated to achieve momentum till Apple launches a 5G-capable iPhone, analysts mentioned.

That telephone is anticipated to reach by end-2020, although some media experiences have mentioned it could be delayed by the pandemic.

“Samsung may have taken an early lead in 5G however the Video games postponement is a setback,” mentioned Jeong Okay-hyun, a former LG cell government and a professor at Sogang College in Seoul.

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“The virus may additionally result in delays within the growth of the 5G market, which might be a aid to Apple.”

In the meanwhile, it stays to be seen if Samsung will proceed with plans to promote a particular Olympics version S20 telephone with 5G functionality. The telephone to be offered by DoCoMo was as a consequence of be launched in June and Samsung started taking pre-orders this month.

Requested if the plan is on monitor, Samsung mentioned particulars might be decided after discussions with the IOC and DoCoMo.

Reporting by Hyunjoo Jin; Further reporting by Sam Nussey in Tokyo; Enhancing by Jonathan Weber and Edwina Gibbs

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