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Is Samsung's Strategy Not As Successful As Expected?

Samsung’s Strategy is Failing
Samsung’s Strategy is Failing
Hassan

2013 was supposed to be a huge year for Samsung. In this year, the company was going to blow away the competition. But, it wasn’t and as far as 2014 is concerned, it is looking to be a soul-searching agent for the company. The Galaxy S4, Samsung’s flagship smartphone, has turned out to be a huge disappointment in every way. The phone had been hyped up to be a world-beater by Samsung, but the Galaxy S4 was simply regarded as a modest improvement over the Galaxy S3. This is a move that’s even regretted by some of the company’s own executives and they are now trying to establish only moderate expectations against the launch of Galaxy S5 this year.

Sales of the S4 were moderate. It may have been the best-selling Android phone of last year, but it was still below the expectations of the company as well as that of the Wall Street analysts. Though the South Korean giant has retained the position of the leader of the smartphone market, but it wasn’t able to gain any market share in 2013, which brought its meteoric rise of the past few years to a halt. This has damaged Samsung’s bottom line and the company announced that in the fourth quarter, for the first time since 2011, its profit fell year-over-year.

Meanwhile, every other smartphone manufacturer was able to come up with a phone that was just as powerful, fast and capable as that of Samsung’s top smartphone, in fact, with better system software and high quality design. Suddenly, there wasn’t much to distinguish Samsung’s flagship phone from the pack. For the first time, Samsung’s mobile strategy has started to show some cracks. Over the past few years, Samsung’s main recipe for mobile success was to release any many profit-margin friendly products as possible. Galaxy-branded phones have been sold by Samsung in every imaginable size and shape.

Some can be termed as good, while others are bad, but none can be called great. In 2010, when Samsung kicked off its smartphone ascension, the company was able to succeed because it was able to manufacture components more cheaply and easily as compared to its competitors. It had better displays, faster chips and more powerful cameras than any other device, except for Apple’s iPhone. Its smartphones couldn’t be called beautiful, but they were inoffensive, light and thin. On the other hand, the company’s weak point had always been its software and services.

They offer an unattractive and clunky experience that's full of gimmicky and useless features. However, Samsung was able to get away with it because of the sheer powers that its phones could deliver and no other company could manage. Last year, however, the specification war came to an end. All smartphones are good enough now and only a limited number of people are concerned with bigger screens. Thus, with superior hardware guts becoming a secondary factor, the Galaxy brand seems to be dangling in mid-air and is looking for something to hang its hat on.

Samsung and Apple, being the two biggest smartphone manufacturers now, have been in a war against each other since the rapid success of Samsung's Galaxy series. Samsung, however, has recently been found guilty of infringing one of Apple's patents. The settlement opportunities between the two giants are expected to be discussed in February.