Samsung Struggling For Smartphone Identity

Seems a strange thing to say about a company doing so well in the smartphone market, but between being squeezed by Chinese and Indian OEMs in the bargain basement market and Apple at the high end, Samsung are struggling to plot a course that maintains its incredible record of success into the future.

It's a stramge thing because wherever you look you'll see Samsung phones - one in three smartphones before the slump, one in four even now. And Samsung has a range of smartphones which really does fill every possible niche. The Galaxy S5 and now the Note 4 are as good as - if not better than - any other smartphone you can buy. It's mid-rangers offer every possible compromise based on hitting a price point. If you can point to a competitor's smartphone you'll find that Samsung almost certainly has an equivalent model in its range.

At the low end Samsung struggles, Android isn't amazing on low end hardware and Huawei and Micromax are starting to make devices as cheap and as good. Nokia too is seeing lots of success with its cheaper handsets too.

Samsung has plotted a new course with both the Galaxy Alpha and Note 4 - more metal for a more premium feel in the hand. Only problem is, I don't think that's what Samsung customers want. Yes,we hear time and time again that the iPhone has a better build quality from the same journalists. The problem is they're wrong, The build quality of Samsung's high end handsets is every bit as good as Apple's. They're really complaining about the choice of materials, but again they're wrong. Metal is a really dumb choice for a phone, it doesn't transmit radio signals well, it wears badly and it's susceptible to damage when dropped or bent. And of course just about every iPhone user puts their phone in a case. As do most HTC One owners.

Whilst there are some outliers (Sony's Xperias and the LG G3 for example) if you want a premium Android phone you're going to be choosing between the Galaxy S5 and Note 4. By trying to win over Apple customer's by changing the way their phones are made, Samsung are chasing a market that just isn't there. In the main Apple owners despise Samsung (check out any pro-Apple blog for a taste of how much) and are never  going to by from the Korean giant.

Samsung needs to concentrate on the things it does well, building the best Android smartphones at all price points, and building it's own platforms for monetising the devices it sells. That means pushing the Galaxy App Store, going global with its Milk music service and better deals with Amazon and others to get customers buying from it's devices. It has even shown what a good job it can do with its software add-ons (just look at how it has extended Android into the Note platform) and needs to carefully build on that foundation for its wider range.

At the moment Samsung is still making substantial profits - US$4bn is not to be sneezed at. The worrying year on year drops in revenue (-10%) and profitd (ca - 60%) don't make comfortable reading. It's all very well on trading on being the anti-Apple, but some time soon Samsung needs to show it's not afraid to take it's own path to success.


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