Samsung lists LatAm obstacles for 2015: Economic recession, fierce competition

South Korean electronics company Samsunghas a clear idea of what it expects to face in the Latin American market this year.

The opening video of the LatAm session at the Samsung Forum 2015, which gathers industry partners, analysts and media and is being held this week in Monaco, lists the obstacles expected for the industry in Latin America this year, including "prolonged economic recession" and "fierce competition".

Questioned by BNamericas about the video at a separate press conference, Mario Lafitte, VP of corporate market for LatAm, said the message did not mean that Samsung was necessarily predicting a recession across the region this year, but was "merely looking to reiterate to partners that the year will be challenging."

Market analysts have recently become more pessimistic about certain LatAm markets, particularly Brazil, where the slowdown in economic activity is adding to concerns over the possibility of water and electric power shortages and the ramifications that the Car Wash corruption probe might have beyond the scope of Petrobras.

"Don't take it literally," Lafitte told journalists. "We were aiming at our partners and not trying to be catastrophic."

According to the executive, 2015 will be more difficult than 2014 for various reasons, including the absence of the World Cup effect, which boosted sales of smart and flat TVs in 2014.

He also pointed to the impact of the appreciation of the US dollar which could be driven, among other factors, by the dismantling of US quantitative easing (QE) policies, which would raise the company's costs.

This effect, he said, would be felt in countries where Samsung has manufacturing sites, such as Brazil, as well as in countries where it does not, such as Chile, due to the fact that it must import the devices.

Asked if these problems would be felt solely by Samsung, the executive replied, "Of course not. This is a situation that affects all [players] equally. The increase in costs traditionally leads to increased end-prices in retail, which might lead to a market retraction."

Also according to the executive, the scenario of "fiscal and economic adjustment" being seen in some countries, namely Brazil, in which the government has raised interest rates to curb stubbornly high inflation, among other measures, may further impact the retail segment.

IoT

At the same press conference, Lafitte stressed that the Internet-of-Things (IoT) will be Samsung's top focus from now on. The trend, he said, should guide the company's entire development of software, hardware (above all wearables) and devices and will be focused on the IoT being human-centric, open-platform and involving collaboration.

Both Google's Android and Samsung's proprietary operating system Tizen will be used as a development platform, Lafitte said.

In Latin America, the executive said he saw prospects for the expansion of the IoT mainly in connected homes and the e-health and m-health segments.