Samsung Electronics Co.’s share price up, intends to cut its smartphone portfolio by 25% to 30% in 2015

Samsung Electronics Co. revealed that it is to cut the number of smartphone models in its portfolio in 2015. The companys decision is part of its strategy to reduce expenses in order to cope with contracting profit. The South-Korea-based company did not officially reveal the exact number of models, which would be affected by the future cuts.

As reported by the Wall Street Journal, one of the executives of the companys mobile division said in October that Samsung will “increase the number of components shared across mid- to low-end models, so that we can further leverage economies of scale”.

As the companys head of investor relations, Robert Yi, said during a presentation that took place in New York, the number of smartphones would be cut by 25% to 30%. One of the companys spokesmen confirmed Mr. Yis statement today.

The Vice President of Samsungs business strategic team, Samsung Display, Lee Chang-hoon, said in a statement, cited by ZDNet: “We will secure production capacity of 30,000 to 40,000 [flexible displays each month] by the end of next year. There will be no company [except Samsung] that has this great production capacity by 2016. We plan to provide consumers with a product that has a flexible display by the end of the year. However, nothing has been decided on the finished product.”

The company also said that it intends to expand its flexible-display smartphone product line especially after its Galaxy Note Edge got a warm welcome. The business strategic team of the smartphone manufacturer – Samsung Display, has been seeking to expand the range and production of its A3 line, which made the curved display the Edge device is equipped with.

Samsungs decision to reduce its large smartphone portfolio comes at a moment when the South Korean company is trying to minimize its expenses in order to become more competitive with cheaper smartphone models, which are provided by its Chinese rivals, such as Xiaomi inc.

According to people with knowledge of the process, Samsung is transferring about 500 employees from its mobile phones business and shifting them mainly towards its initiative of the Internet of things.

Samsung Electronics Co. was up 1.24% to close at KRW 1 220 000 per share today. The company is valued at KRW 198 548.10 billion.