Each year Samsung's Chairman, Lee Kun-hee, gives a rousing speech to employees to give them direction for the upcoming year. In this year's speech Mr. Lee highlighted how tough the competition was in 2013, even though Samsung had another record year of sales, and pressed the need to move away from old habits and come up with new ways of thinking. He went on to talk about how Samsung needs to move away from such a strong hardware focus, as they almost always have had, to a more software and innovation-oriented focus. According to the Wall Street Journal Mr. Lee is quoted saying "Research & development center(s) should work around the clock, non-stop" and that Samsung "get rid of business models and strategies from five, ten years ago and hardware-focused ways." This comes after the President of Samsung, Lee Sang-hoon, said just in November that the company needed to focus on software quality, as they were severely lacking in quality software when compared to the competition.
This speech and change of direction comes as Samsung's shares have fallen by 10% in 2013 even though Samsung had record-breaking sales throughout the year. Investors are worried that Samsung's future growth will be stifled by stiff competition and a general lack of innovation on Samsung's part. Many likened the Galaxy S4 as the Galaxy S3s, saying that it just felt like a slightly better version of the Galaxy S III, whereas the Galaxy S III felt like a significant step up from the Galaxy S II and that over the original Galaxy S phone. Samsung's shares dropped another 4.6% since the New Year, signalling the need for change for the South Korean tech giant. Samsung has been plagued over the past few years with patent disputes, primarily from Apple, and this hasn't helped their image with investors either. While Samsung's market share has grown, a general dislike of the company has emerged from certain sectors of the mobile market, and that's something that a complete overhaul of their software could certainly mend quite a bit.
Will we see such an overhaul starting with the Galaxy S5 and Design 3.0? We've already seen hints of a hardware overhaul for Samsung's 2014 flagships, so a software overhaul is very likely going to be in-tow with that. Design 2.0 was ushered in with the Galaxy S III, and brought a fairly significant change in some parts of Samsung's custom version of Android, so the same type of thing is expected with the upcoming Design 3.0 phones as well. We've seen some significant changes in design starting with the release of Android 4.3 on many of Samsung's flagships, and these changes are likely to push further into the rest of the OS with new software updates and flagship releases.