Samsung could be in serious trouble

“I am a large pessimist on Samsung (SSNLF) devices, and to be honest no investor should ever want to expose themselves to the risk of owning this company,” Alexander Cho writes for The Motley Fool. “Recently Reuters reported, ‘Analysts say sales momentum for the high-end version of the S4, which became its fastest selling smartphone since its launch in late April, has slowed. “Sales of high-end handsets are lagging behind expectations while low- to mid-end handsets are selling briskly worldwide,’ said Kim Young-chan, an analyst at Shinhan Investment Corp.”

“Samsung’s greatest weakness is that it doesn’t have that much control. It cannot dictate what goes on in the Android operating systems and how the application market is structured,” Cho writes. “The company cannot price itself any higher or lower than its competitors. Lower prices mean lower margins. Higher prices on phones would result in less demand.”

Cho writes, “Going forward it should be safe to assume that Apple will generate unit volume growth through both increasing demand in general, paired with the stolen market share from HTC, Samsung, LG, BlackBerry, and Nokia. Therefore, investors would be sensible to invest into Apple.”

Read more in the full article here.


  1. Finally… Someone gets it. Samsung might sell (ship?) more phones, but I bet most of them are very low end phones that really don’t compare to an iPhone or even the SIII and SIV. Recently travelled with a buddy with a lower end Samsung phone and he had no idea what it could or couldn’t do, he just used it for calls and texting. Doesn’t have email, doesn’t surf the web, has never downloaded an app. He didn’t even know it had the built nav app from Google. I suspect that’s where most of Samsung’s phones are sold. My understanding is that the iPhone 5, iPhone 4S and iPhone 4, consistently place 1 2 and 3 for most carriers, most of the time. Sure Samsung beats them occasionally, but not consistently.

  2. The problem I see for Samsung is it’s very easy to move from one Android manufacture to another. If Samsung at least pushed updates of new OS’s then they would be above the rest but as it is if you want the latest version of Android you’re going to have to purchase a new device. They will try to quell this with the Samsung Galaxy store but I’m not sure the Samsung demographic will buy into this.

    1. I don’t think Apple is earning market share, rather they own the market.

      They innovate like crazy for years then release the first ever true smart phone. They own the smart phone market.

      Then Android comes along and starts stealing market share, Samsung starts stealing market share and design, and a few companies like Microsoft try and earn some market share.

      I don’t care how many androids are pushed into the retail stream, or even how many people buy them – Apple creates a market, and by far the best products in it.

      People who buy the cheap knockoffs are temporary users – cheap build quality, ugly screen colours, the inconsistent and changing UI, slow updates, lack of security etc – all lead to none devoted, Apple potential customers.

  3. One problem is that Samsung and Android and the carriers all have different business models.

    Samsung wants consumers to buy expensive, high margin devices, and have free services without ads.

    Google wants consumers to have cheap devices (as close to free as possible) and make money off ads, while carrier service is also cheap.

    The carriers want devices that aren’t too cheap… just enough to lock people in and want to make money off voice and data plans.

    So… Google will try to undercut Samsung by offering the Nexus on the high end, and making sure Android runs on very low-end cheap devices.

    Samsung, will screw Google by forking Android, which they’re pretty much at that point already.

    Apple only has to deal with the carriers. And the relationship is actually pretty decent despite Apple radically changing a lot of former practices by the carriers. Apple provides carriers with a lock-in version of the iPhone at $0, $99 and the killer-all-out iPhone at substantial subsidy.

    Meanwhile, idiots are buying cheap Android devices and realizing they suck, and then if they get the Samsung Galaxy S4, they’re discovering it’s a total mess of gimmicky features in an incomprehensible environment.

    I’m constantly amazed at how many people get the S3/S4 and then don’t know how to use it and say things like, “ya, these so called smart phones are so confusing, it can do all this stuff, but I can barely make a phone call”.

    Ugg… it’s like Windows all over again.

  4. Doesn’t matter how hard we try to defend for Apple , obviously, Samsung wins the market shares. It hits both low-end and high-end which Apple has not thought about until the reality hit hard. Apple needs to find a practical solutions to win back the Smartphone war.

    1. Samsung is gaining market share. Apple is gaining market share. The only point you may have is that Samsung is gaining market share faster than Apple.

      Regardless, Apple is not losing customers to Samsung but Samsung is losing customers to Apple.

    2. @iSpank
      “Apple needs to find a practical solutions to win back the Smartphone war.

      “win back”!!!? What!? Apple takes more of the profit, not just of smartphones but of ALL cell phones, than ALL OTHER PHONE MAKERS on the planet. And that is not just “more” — it’s about double the profit of ALL OTHERS combined!

  5. I was so disappointed in this article after seeing the title. I was hoping some world patent organisation had decided to stop the serial theft of innovation and put a worldwide ban on every Samsung product. Yup I’m a bit of an optimist…

    1. The domino effect works because of gravity, action and reaction. Any, movement going upwards is a fight against gravity, or a slow process, hence actions and reactions occur slower also. Conclusion, this AAPL grow is gonna take a long time.

  6. Samsung’s attacking only a small part of the consumer need for data and devices.

    Samsung doesn’t have anywhere near the breadth of Apple and I don’t think they will get near Apple because of their lack of OS, software, hardware and integration.

    They can’t differentiate.

  7. There is a great advantage in building your own hardware and software. We saw that during the WWDC Keynote. Apple is always able to pull if such cool demos, of course, they build everything. They imagine a cool feature and then they go out and just build it. No one else can do this.

    Goosung is at a real disadvantage here. U think that Balckberry and in some part Nokia are enjoying the same advantage as Apple with a integrated approach. If they can pull it of they might be able to really capitalise on this in the future.

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