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Galaxy Note 5 Reinforces Samsung's Wrong Direction

 
Leaks are now pointing to the new Galaxy Note 5 mimicking its smaller siblings and dropping both the removable battery and memory expansion slot in favour of a 'premium' build. If further evidence were needed of Samsung's problems this is it.
 
After more than a year of falling sales and profits Samsung's answer was the Galaxy S6, a premium phone answering the criticisms that had been waged against the GS5. Of course the people who were complaining weren't generally GS5 buyers and the only real issue with the GS5 was that Samsung grossly over-estimated demand for a device facing wider and stronger competition in its market segment.
 
I've said before (and I'll probably say it again) the premium Android market is tiny. If you take a subset of smartphone customers who are prepared to pay a premium perhaps as many as 80% of them will only consider an Apple product.
 
Extrapolating from iPhone sales, that leaves the remainder of the premium market up for grabs at about 40 million handsets a year. From that group you need to subtract those buyers who will consider an Android phone but buy an iPhone anyway, premium devices from other Android OEMs and then wonder how much is left over for Samsung.
 
Even if it were to win that whole 40 million phone segment with its premium devices I'd suggest that it wouldn't improve its business position. Most of those buyers want the GS6 Edge, because of its impressive screen, however Samsung doesn't seem to be capable of the volume required. And in an effort to get people to buy the GS6 Samsung are having to resort to 'pricing re-alignment', or discounting to you and me.
 
The limited success of the GS6 should have given Samsung pause for thought and changed its plans for the Note 5. What are the core values Samsung buyers actually desire? On the basis of past performance they value features, flexibility and expandability. Samsung seems intent on ignoring that information in a blind pursuit of Apple.
 
When you're rushing off down a blind alley in the dark it's probably useful to pause and take stock of your direction. Before you run straight into the wall at the end.

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