Comeback trail

  • Samsung is still the largest smartphone maker in the world, but its share fell from about 31 per cent to less than 25 per cent between 2013 and 2014, Gartner reported.

Samsung’s internal code name for its latest top-of-the-line smartphones, the Galaxy S6 and S6 Edge, is “Project Zero,” signalling what Samsung calls “a return to fundamentals”.

The code name also suggests that Samsung finally seems to understand the many criticisms that have long been levelled at its phones: the plastic hardware looked cheap, the most promoted features were mostly useless and the software was too complicated.

Samsung, according to Samsung, has realised the errors of its ways.

The realisation was born out of necessity. Samsung’s market share and profits in the smartphone business have plummeted over the last year. The company, which is based in South Korea, is in the unenviable position of getting squeezed from the bottom by the affordable phones made by Chinese upstarts like Xiaomi and at the top by Apple’s powerhouse line of iPhones.

The elegant new Galaxy phones, which went on sale in the US last week, are aiming to pull Samsung out of that pickle. But while the phones are magnificent to look at, they are most likely not quite enough to fix what ails the company.

Despite improved hardware, the S6 and S6 Edge still lack compelling software. Unlike Apple, Samsung has never managed to create a built-in suite of software and services to keep people hooked to its own phones. And there are few obvious ways for Samsung to address this glaring flaw.

“You can argue that they are in phase one of fixing their software, which is getting rid of a lot of the junk,” said Jan Dawson, an independent technology analyst who anticipated Samsung’s recent troubles. “But we haven’t really seen phase two, which would be building its own stuff. We haven’t really seen much of that so far.”

The question of what Samsung can do to differentiate its phones is urgent. Samsung became the most popular smartphone maker in the world by producing alternatives to the iPhone at attractive prices and by outspending all of its rivals on marketing. More than any other company, Samsung developed phones with big screens, a surprising hit with consumers.

But last year, Apple produced its own big phones. They were also a hit, and Samsung’s spiral accelerated.

The holidays were particularly brutal. Samsung’s smartphone sales in the last quarter of 2014 declined from the year before, while the overall market grew, according to the research firm Gartner. By some estimates Apple claimed more than 90 per cent of the profit in the smartphone industry during the holidays.

Samsung is still the largest smartphone maker in the world, but its share fell from about 31 per cent to less than 25 per cent between 2013 and 2014, Gartner reported. And in China, widely considered the big growth market for phones, Samsung was ranked fifth behind Xiaomi, Apple, Huawei and Lenovo during the last quarter, according to the research firm IDC.

The new S6 and S6 Edge, which are nearly identical to each other except that the Edge’s screen curves intriguingly, though mostly uselessly, on its left and right side, are at least an answer to critics who say Samsung’s devices look cheap.

The S6 phones are made out of aluminium and glass rather than the plastic in Samsung’s older phones. Both the S6 and S6 Edge strongly resemble Apple’s iPhone. The S6 in particular looks like Apple’s brother from another mother. Samsung has also co-opted many of the design ideas for which its fans have long criticised Apple. The new Galaxys no longer offer a removable battery, for example, or a slot for add-on storage cards, and unlike the Galaxy S5, the S6s are not waterproof.

Samsung goes far in checking off every other hardware box: The S6 and S6 Edge are blazingly fast, their cameras are excellent, their fingerprint sensors work very well, and—with an add-on charging pad—they can be recharged wirelessly.

But if the new phones are beautiful and functional, they are still something of a pain to use. The S6 and S6 Edge run Samsung’s modified version of Google’s Android operating system. Despite Samsung’s engineers’ efforts to clean up the software, the phone’s interface is a hodgepodge of odd design decisions and overly complicated functions.

In the international market for phones, Samsung’s Galaxys are relatively expensive. They sell for about the same price as Apple’s latest devices, $199 and up with a two-year contract, or more than $650 without a contract. But powerful phones made by low-priced Chinese sellers, like the OnePlus One, often sell for less than half the price of high-end Samsung and Apple devices.

If you pay the premium price to Apple, you get a phone with a well-designed operating system, no overlapping preloaded apps, and a host of services that often work very well, like iMessage, Apple Pay and expanding compatibilities with Apple’s personal computers and devices like the Apple TV and, soon, the Apple Watch. You can criticise Apple’s sticky ecosystem as a form of consumer lock-in, but Apple sure has built a luxurious prison, and customers are willing to pay extra for it.

Samsung’s long history of sub-par software might not inspire droves of customers to buy into its world. What’s more, since Samsung’s phones are based on Google’s operating system, customers are better off buying into that company’s services because they are usually better designed and will work on most other Android phones.

“The reality is that Samsung doesn’t have anything that’s better than Google’s services in most categories, so from the consumer’s perspective it’s not clear that there’s any benefit for Samsung to make its own stuff,” Dawson said.

Hence the catastrophic question for Samsung: If lots of other, cheaper, almost-as-good phones run Android, why pay extra for a Samsung?

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Topics : #Samsung

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