samsung-galaxy-s6-1-300x278.jpgA fairly long analysis by Ben Bajarin, shared recently, predicts that: “Samsung will be out of the smartphone business within five years.” That rather drastic analysis is driven by Samsung’s quarterly earnings numbers, with buyers still underimpressed by their new models, and by the “innovator’s dilemma.” Bajarin locates the problem in the Android ecosystem. “When you ship the same operating system as your competition you are only as good as their lowest price.” In his view, this is where Apple wins out, with no competition whatsoever inside its walled garden.

Others, needless to say, don’t agree. And I happen to feel that the prediction of Samsung’s demise is overly drastic. However, it does make a sound point, as it probably was intended to. Samsung isn’t able to capture the same value premium as Apple for its top-end handsets. It hasn’t been able to create a unique enough proposition to get people shelling out the extra when other Android handsets can offer 99 percent of the same functionality at a much lower price in an almost identical form factor. It just doesn’t have the unique brand value.

Is that a matter of the OS, as Bajarin argues? I suspect it’s more Apple’s brand cachet, design and consumer-focused smarts, that have built its unassailable reputation. A Samsung simply doesn’t say bling like an iPhone. To me, any Samsung still looks like a handset built by a company of engineers, not of stylists. Bajarin’s critics argue that Samsung does get away with charging more for its offerings. Perhaps, but it still captures a shrinking share of the Android pie. And anyone wanting the absolute best Android experience will probably go for Google’s own Nexus handsets, built with a series of partners, rather than for a Samsung. By loading not-so-persuasive unique selling points, such as its own front end and physical screen button on its Android devices, Samsung has simply made things fussier for consumers without creating truly outstanding value. That’s not going far enough down the Apple route, perhaps, but it is very much the kind of decision you’d expect a company of engineers to make.

For what it’s worth, I don’t think that Samsung will be out of the smartphone business in the next five years. But I do think it will have an ever-shrinking market share, while the likes of Huawei steal its tech mantle. And it will stay the course for exactly the kind of reasons that a company of engineers would stay in the game: corporate pride.


The TeleRead community values your civil and thoughtful comments. We use a cache, so expect a delay. Problems? E-mail