Have Samsung Changed Their Business Enough For 2015? I Am Not So Sure

AH Samsung Logo Note 3 3.1

Another day, another article discussing Samsung’s woes. Yesterday, Samsung released another poor earnings report that highlighted their profits down 27%, which brings something of a conclusion to their tough 2014. Samsung blamed the fall on slowing smartphone sales; their mobile business has faced competition from all sides. Apple has invented the large screen iPhone, so now competes with the large screened Samsung devices on a more level playing field. Meanwhile a number of Chinese manufacturers have been building devices of at least comparable quality, both hardware and software, for around half the price of Samsung’s Android devices. And it’s true that other Android device manufacturers are also suffering from these inexpensive flagship-breaking devices, but Samsung as the market leader has the most to lose. And lose they appear to be doing so, as smartphone sales between Apple and Samsung were very similar for the last quarter of 2014 (but let’s not forget that Apple sells more of the iPhone following the launch of a new product and I expect Samsung will claw back a little market after their next flagship device is launched in March).

Writing of the Samsung Galaxy S6, we’ve seen rumors that this device is a redesigned device from the ground up, made out of metal, with advanced new generation processors, curved glass and other new features, which some believe is designed to justify the Samsung device cost premium. And as I wrote earlier in the week, new hardware and software features are fine to a point, but lead to “gimmick creep.” Ultimately, the customer has to pay for these features. We’ve seen Samsung claim that they are to consolidate their product line up and reduce the devices released by 25% or so, but almost in the same week we’ve seen two new device ranges, the E-Series and the J-Series. That brings the Samsung Galaxy range to four, the high-end Galaxy S, the “design focused” Galaxy A plus the two newer, more budget focused ranges. I cannot help but feel it will something closer to a disaster for Samsung to realise that consolidation might mean, say, dropping the Android product family down to two; one high end and one mid-range.

We need to give Samsung more time. I like the Galaxy Alpha for its beautiful design and focus on design rather than boasting bleeding edge specification, but would argue that Samsung over designed it by incorporating a too-thin design and a correspondingly too-small battery. If the Galaxy S6 can mimic the same quality of design as the A-Series but incorporate a large-sized battery and, critically, drop the gimmicks, it may be enough to capture the imagination again. However, I suspect that the reforms they’ve implemented are too little to make a big enough difference for 2015 and we’ll have to wait until 2016 before we see something inspirational from the Samsung stable.