A January 29th blog from Forbes contributor Ewan Spence highlights that Samsung’s inherent conservatism is leading to tentative decisions that are costing the company market share. Spence highlights the current situation of the firm’s Galaxy S6 and innovative Galaxy Note Edge phablet as a case in point.
Samsung’s tentativeness is starting to have a greater impact on the bottom line. The Korean electronics giant just reported its fourth consecutive quarter with falling earnings and its first annual earnings fall in the last three years. Of particular note, the mobile division only brought in profits of $1.8 billion, a huge drop off from $5 billion in the first quarter of 2014, a year over year decrease of a staggering 64.2%.
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Lack of guidance on Galaxy S6 and other mobile sales
Spence also points out that Samsung did not provide guidance for its mobile sales in 2015, and just generically noted intensified competition in emerging markets, and that public demand was currently focused on its mid- and low-range models.
Her says: “I’m not surprised that Samsung cannot offer guidance. The South Korean company’s strategy is muddy and unclear, the signals it is sending are jumbled, and there is a lack of confidence in its flagship products. Samsung has created its own cloud of fear, uncertainty, and doubt.”
The Galaxy Note Edge fiasco
Samsung’s key smartphones are the soon-to-be-launched Galaxy S6 and the Galaxy Note. The firm launched the Galaxy Note 4 at Berlin’s IFA last fall. The company announced the innovative Galaxy Note Edge at the same event. The cool new phablet featured a bent screen offering a 160 pixel wide ‘spine display’ that curved to integrate into the main screen.
A truly novel new design, the Note Edge offered new usage models and interface options, showing the firm was committed to new form factors and use cases.
Spence comments: “It was a sign that Samsung could think out of the box and could lead from the front, rather than be a fast follower mimicking the style of other companies who had proved that consumers wanted a specific feature.”
Unfortunately, a day later Samsung revealed that the Note Edge would only be available in very limited quantities in South Korea.
Spence argues that Samsung was too “scared to let the ‘Edge’ concept stand alone as a key differentiator.” He says that’s why the “old and venerable design of the Note 4 was used as a safety net for the new concept.”