Just days before the launch of its new premium Galaxy S26 smartphones, Samsung Australia has conceded that the local smartphone market has weakened — even as the company insists it is tightening its grip on the high-end segment.

Eric Chou, Vice President and Head of Mobile eXperience (MX) at Samsung Electronics Australia, (seen above) acknowledged that the past six months have seen the broader market “go soft.” But he maintained that Samsung has continued to grow in the premium tier.

“We have grown across the board last year, as well as in the high end,” Chou said.

What he did not mention was profitability.

Chou appeared at the recent Federal Senate hearing.

Multiple brands have told ChannelNews that shrinking margins are becoming a serious concern, as aggressive Chinese competitors such as Motorola, Oppo and Xiaomi fight to hold — and expand — their share of the Australian market. Oppo is widely tipped to mount a renewed assault on Samsung’s premium Android dominance in the second half of the year with new flagship models.

While Samsung talks growth, analysts paint a more sobering picture. Counterpoint Research indicates that although the premium segment may have held up, the mid-market is in decline, and the overall Australian smartphone market is forecast to fall by 4.5%.

Chou attributed some of the slowdown to Australia’s 3G network shutdown, which temporarily distorted sales activity. “If you’re looking at the entry or the mid year-on-year, there has been overall decline in the market,” he admitted. Still, he argued that Australia’s total smartphone market performance compares favourably to parts of Europe and Asia.

Margin Pressure Mounts

The competitive landscape is tightening rapidly. Motorola — which positions itself as Australia’s third-largest brand — is facing pressure both locally and overseas. In Europe, Counterpoint data shows Motorola’s share has fallen 6% as consumers shift to rivals Oppo and Xiaomi. Both brands have strengthened their Australian presence, with Oppo establishing its own subsidiary to expand operations.

Samsung, meanwhile, is attempting to lock in high-value customers. Its recently launched “Galaxy Club” is designed to target frequent upgraders — typically buyers at the top end of the pricing spectrum.

Chou conceded the strategy is deliberate. “The people who are actually upgrading more frequently are the ones who are at the high-end of the purchase and price spectrum,” he said.

Retailers, however, tell ChannelNews that immigration-driven population growth is masking underlying weakness. Strip out new arrivals, several claim, and the market is flat or declining.

Samsung’s own internal data suggests the average smartphone replacement cycle sits at roughly 30 months. Premium users, however, are upgrading in less than 24 months — a crucial factor in sustaining high-end sales as mid-tier demand falters.

Carriers Grow “Fussy”

Chou described a market where distribution channels are becoming increasingly selective.

“The competition is more intensive than ever before,” he said. “Samsung is holding our own in that our base of customers who are loyal continues to buy Samsung.”

He noted that carrier channels are gravitating toward trusted, established brands, while open retail channels such as JB Hi-Fi offer broader choice. Optus, for example, experimented with alternative Android brands but ultimately reverted to Samsung as its dominant offering. Its exclusive Motorola arrangement lasted only three to four months.

“The carrier channel is getting more fussy over what brands they carry,” Chou said.

Rising Costs Loom

Adding to the pressure are looming component shortages, particularly memory, which could push device prices higher across the industry.

“Samsung just like every other brand is not immune to the cost increases, which are resulting from shortage of memory,” Chou admitted. While he argued Samsung is better positioned than rivals to secure supply, he acknowledged the issue will be industry-wide.

With competition intensifying, margins tightening and component costs rising, Samsung now faces a delicate balancing act: defend its premium dominance while navigating a cooling market.

Chou conceded the challenge ahead. Rising device costs and broader market pressures, he said, will be issues Samsung must grapple with not just this year — but into 2027.

As the Galaxy S26 prepares to hit shelves, the battle for Australia’s shrinking smartphone dollar is only just beginning.