Strategy Session: Samsung’s Road to Success—Paved by Connectivity

Strategy Session: Samsung’s Road to Success—Paved by Connectivity

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With the convergence of different devices becoming such an important platform in the digital imaging category, Samsung is in a unique position to capitalize on this emerging trend. I sat down with Ron Gazzola, vice president of Marketing for Digital Imaging, to talk about Samsung’s strategy going forward to capitalize on the next generation of imaging consumers.

JG
: Samsung is such a vibrant company in the CE category. What’s your main strategy as an imaging company?

RG: Whether it’s point and shoot, compact system or our Galaxy Camera, the Samsung brand in the imaging space stands for connectivity and performance. Our primary focus for the last couple of years has been on improving the Wi-Fi capabilities in our digital cameras—and making our Smart technology one of the staple items we offer in our product line. When we look at the traditional imaging space, we’re seeing a lot of change. While there are overall declines in the industry, people are taking more pictures than ever, and they’re sharing them across different devices or uploading them to social network sites. We see that change as an opportunity to revolutionize the imaging space, and therefore our brand represents something a little different than the traditional imaging companies. We offer a great convergence solution across our product portfolio.

To meet this changing market, we are committed to making sure our products are connected, work seamlessly across devices and provide superior image performance and optics.

Given the connectivity story, in some ways the quality may not be as important, because it’s more about sharing and sending than printing.

The average consumer who takes an image and sends it up to Facebook may not always be as focused on quality. But when we’re designing our cameras, we’re putting technology into the camera that enables it to take great pictures. The performance is there if I want to print it or view it on a Samsung Galaxy tablet. The quality of the image remains very important, so we continue to make sure high-quality image capture is a core part of our product offering.

Your connectivity story really resonates now more than ever. Did you anticipate that?

Samsung has been investing in camera connectivity over the last few years, and we have expanded our Smart technology across our entire line. If you look at some of the recent NPD data, about 35% of cameras were Wi-Fi enabled. So other brands are beginning to integrate Wi-Fi more and more. The advantage for Samsung is that we’ve been at it for quite a while, and the benefits of our Wi-Fi feature—what we call our Smart technology—provide consumers with a seamless connected experience across multiple devices or up to the cloud; our workflow is simple for the consumer. It’s not just about having Wi-Fi in the camera; it’s about making it work seamlessly.

When the Samsung Galaxy Camera was introduced, you took on the Galaxy brand name. What was the thinking behind that?

The Samsung Galaxy name in the mobile and tablet space has become a strong brand that resonates with consumers. In the case of the Android-based Galaxy Camera, it was only natural for us to introduce it as part of the Galaxy family. It’s been in the market for around a year now, and results have been fantastic. According to NPD, in the over-$400 compact category, it’s been the number one camera since September. The branding of the Galaxy Camera has allowed us to create and introduce a completely new category in the imaging space. Building on that success, we recently launched the Galaxy NX, which takes all the great benefits that the Galaxy Camera offers in terms of an Android-based OS and connectivity and combines them with our award-winning compact system camera platform to offer a completely new product in the marketplace.

What does Galaxy stand for?

Products that are Android enabled. For consumers who have a Samsung tablet or Samsung smartphone, when they get the Galaxy Camera, there’s an immediate recognition. This “young-minded consumer” is connected. They have smartphones in their pockets and they want to stay in touch, and they are very familiar with the Android operating system, which continues to grow in popularity. It’s a huge audience not really defined by a particular age or demographic, and they’re all candidates for a Samsung camera.

So how do you define your lineup?

You can look at Samsung’s digital camera lineup in three key areas. First, in our point-and-shoot line we’re all about Smart cameras—these are cameras that have Wi-Fi technology. Our feature set and workflow are among the best in the industry. If you use our cameras and e-mail, upload or send an image to Facebook, you’ll find the experience simple and intuitive. The technologies we’ve integrated into our Smart cameras have been adopted very quickly by consumers, largely because this was the missing ingredient in the camera space.

The second area is the Galaxy Camera, where Samsung has created a totally new category—combining the Android OS with great optics and superior performance. We recently expanded the segment by introducing the Galaxy NX.

And the third area is compact system cameras, which for Samsung is the award-winning NX line that consists now of the NX300 and NX2000. According to NPD, we’ve become the number three player in the CSC category in the last six months, and we’ll look to build on that success. Those two products have solidified themselves by winning numerous performance awards, while also offering our Smart connectivity platform.

Are you surprised that the CSC business has not grown like the industry thought it would?

When you look at what’s happened in the industry, 2013 saw a realignment of the manufacturers in the CSC space. As Samsung continues to bring a clear point of difference to this category—professional-grade image capture with connectivity—we are well positioned for growth in the segment. We see the CSC platform as one of the growth areas in DI, so it will continue to be a big focus for us.

Does it take a bite out of traditional DSLRs, or more out of the bottom?

A little bit of both—that’s what makes the category a bit unique. As consumers consider buying a camera, they can take a good look at compact system cameras and find they get all the benefits of an interchangeable lens—and in the case of Samsung, Wi-Fi connectivity and great performance—so they don’t need to step up to a big, heavy DSLR. But for a very attractive price point, I can step into a camera that gives me far better performance than my smartphone. So we’re drawing on both markets. And with our connectivity solution, we’re not only talking to a traditional imaging consumer but also a mobile and tablet audience, which puts Samsung in a unique position to drive both growth and change in the space.

Can you talk about technologies that Samsung is looking at?

We don’t share our R&D plans, but if you look at what we’ve focused on in the imaging space with connectivity, and what consumers expect their cameras to be able to do in this connected world, you can expect Samsung to continue to make investments to ensure we’re delivering new and exciting products. A great example of our commitment is the Galaxy Camera, where we delivered a completely new and different experience—one that no one else in the market can do—and changed the industry.

When the Galaxy Camera came out it was sold only among the phone carriers, and everyone thought, ‘who’s going to buy a camera in a phone store?’ Overall, what’s your retail strategy?

In the case of the Galaxy Camera, it was launched initially in the carrier channel—Verizon and AT&T—because it had the 4G/LTE chip. Since then, we released a Wi-Fi version into retail, giving us an opportunity to expand the Android-based camera concept beyond the mobile consumer to the traditional camera consumer. We also recently introduced the Galaxy S4 Zoom, a Galaxy S4 Mini smartphone with a 10x optical zoom lens—another new and exciting innovation from Samsung.

What about the photo specialty channel?

The last couple of years we’ve been very focused on that channel, through direct relationships and with the PRO group. Cameras like the NX300 and the Galaxy NX are great cameras for that channel, because they bring new business opportunities. At the core, we have to deliver a great camera, but we also want the channel to see Samsung as a strategic partner helping to create and grow new markets for them.

They’re looking for something new and different?

Connectivity is such an important part; if you’re selling a great camera and part of the story is seamless connectivity, you have a new concept to sell. That’s the growth opportunity—to expand beyond the traditional imaging consumer base and appeal to the tablet owner, the smartphone owner and the high-def television owner. It gives you a new and unique way to sell that camera, because it becomes a devise that fits into the ecosystem of products your customers already have and use every day. That’s the new value proposition for our dealers that other manufacturers can’t really offer.

What about your lens strategy?

We continue to expand the NX ecosystem. We currently have 12 lenses, and we’ll continue to invest as the category grows. The ratings we’ve received on our lenses have been outstanding, proving that consumers value and appreciate our lens technology.

I remember sitting in a presentation a few years ago when it was declared that Samsung would be number one in the imaging category. Is that still the goal?

Definitely. We will expand our camera product lineup and drive our strategy to market. We believe the changing imaging market is a great opportunity for Samsung to win new consumers. Our Smart technologies appeal to the emerging consumer base, and we continue to build toward that number one position. We’ve seen tremendous growth in the past 18 months—not only in the U.S. but globally—and we will continue to grow by leading through innovation. samsung.com

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