Linked by Thom Holwerda on Thu 7th Jul 2016 09:50 UTC
PDAs, Cellphones, Wireless

Ben Thompson, 8 July, 2014:

Ultimately, though, Samsung's fundamental problem is that they have no software-based differentiation, which means in the long run all they can do is compete on price. Perhaps they should ask HP or Dell how that goes.

Dan Frommer, 31 July, 2014:

But we've seen this story before. This particular chart shows Nokia's adjusted closing price from the day Apple released the first iPhone, in 2007, to the day in 2013 when Microsoft announced it would acquire Nokia's struggling handset business.

[...]

For Samsung, there's no easy fix.

Se Young Lee (and Ben Thompson again, curiously enough), 4 August, 2015:

The coming years are set to be more somber for the South Korean tech giant, as it is forced to slash prices and accept lower margins at its mobile division in order to see off competition from rivals including China's Huawei Technologies Co Ltd and Xiaomi Inc in the mid-to-low end of the market.

Behind Samsung's reality-check is the fact it is stuck with the same Android operating system used by its low-cost competitors, who are producing increasingly-capable phones of their own.

"The writing has long been on the wall for any premium Android maker: as soon as low end hardware became 'good enough,' there would be no reason to buy a premium brand," said Ben Thompson, an analyst at Stratechery.com in Taipei.

Horace Dediu, 13 October, 2014:

So the short answer is that Samsung needs to create new categories or businesses. The challenge for them is that they need to control the platform and service infrastructure. These are currently out of their control and I’m not quite sure how they can regain that control.

Fast-forward to today:

Samsung Electronics' earnings guidance for the second quarter of 2016 show the company expecting to record its strongest profits in more than two years.

[...]

The results suggest Samsung's best quarterly performance since it made an 8.49 trillion won operating profit in early 2014 before entering a slump that it's only recently started to bounce back from. The figures are preliminary, though Samsung is usually accurate in its forecasting.

Samsung is doomed.

Thread beginning with comment 631453
To read all comments associated with this story, please click here.
Making the hardware people want
by benoitb on Thu 7th Jul 2016 10:37 UTC
benoitb
Member since:
2010-06-29

I don't like Samsung's software.

You still have to admit that they make phones that the end users want: good screen, fast, light, good camera, microSD, removable battery...

They are a hardware company and they do their job quite well. What more do you need to compete ? Some advertising that they seem to get just about right as well.

Reply Score: 8

darknexus Member since:
2008-07-15

Perhaps, though the S6 showed that they were willing to try and sacrifice those hardware advantages. I'd be curious to know what would happen to their profits if carriers, at least in the states, would charge as much for Samsung devices as they do for an Apple device on contract. To buy them full out is about the same price in both cases, yet carriers often give Samsung devices away or charge a nominal $50 or so for them. I do wonder how much the contract system skews the results.
They make pretty good hardware. I can't stand their awful software however.

Reply Parent Score: 2

TheMole Member since:
2015-10-28

Well, you might want to take a look at Europe, where actually buying a phone is quite a bit more common than in the US. Over here, you'll find that Apple only has about 18% of the market (compared to 38% in the US). To me that seems to indicate that hardware subsidies don't really benefit the Android ecosystem disproportionately.

I'd say it's probably the other way around: with the emphasis on subsidized phones in the US, the high end smartphone segment (where all of Apple's phones sit) is likely overrepresented in the market. If subsidies were to go away and people would have to pay their phones outright, I believe a lot of them would opt for cheaper (and therefor non-iOS) phones.

Reply Parent Score: 8

No it isnt Member since:
2005-11-14

The Galaxy S7 has pretty good software. Coming from a Nexus 4, I didn't find the UX all that different -- slightly more powerful, in that it supports split screen, and for some reason the GMail app didn't have Exchange support. The only thing I miss is the rubberised edges of the Nexus. This thing feels slippery. Everything is better, except the less timely updates.

I also own a Galaxy Note 10.1 (2014) tablet, and that thing is a piece of crap, mainly due to the software. But even that has improved, with the recent (!) update to Android 5.1.1.

Reply Parent Score: 2

Yasu Member since:
2014-05-15

You need time to become a brand household name. Which Samsung has. They are famous for making good phones (regardless if it's actually true or not) so people feel comfortable buying one. "If you are unsure, buy a Samsung (or an Iphone)".

It's easy to see why Nokia failed when their own CEO said their phones OS was crap. Really bad move. Why people kept predicting Samsungs demise I don't know. It could have happened for certain but there where no real indicators that it had to happen, like with Nokia. Was it just wishful thinking maybe?

Reply Parent Score: 3