“Efforts to revive its once stellar smartphone fortunes may be doomed if Samsung Electronics cannot overcome its dominant engineering culture, according to serving and former executives and those who have dealt with the company. This culture, they say, has stymied many previous efforts to develop software and service platforms to support the smartphone business. In the past year several such services have closed down, at least one of them within a year of being launched,” Jeremy Wagstaff and Se Young Lee report for Reuters. “‘There’s a lot of distrust of top executives who can actually implement stuff that is more of a software and services offering,’ said one person familiar with the company’s inner workings. ‘It’s still ‘we know how to sell boxes, we sell boxes.'”
“Without its own distinctive software, content and services, Samsung has little to differentiate itself from other Android phone makers selling similar devices at lower prices,” Wagstaff and Lee report. “Interviews with former and serving employees paint a picture of confusion and overlap between competing divisions, where the short-term interests of promoting hardware trump long-term efforts to build platforms that would add value for customers and increase their loyalty to the brand… ‘Samsung’s upper management just inherently doesn’t understand software,’ the former employee said… As a result, critics say, initiatives involving software or services languish and often fail.”
“To be sure, Samsung’s struggles are hardly unique – firms such as HTC Corp, Nokia and BlackBerry also failed in their attempt to develop viable platforms,” Wagstaff and Lee report. “But former and serving executives say Samsung has failed to support innovation within the company, shrinking margins to stay competitive while losing ground to Chinese rivals such as Huawei Technologies Co Ltd. The mobile division’s earnings contribution shrank to 39 percent of January-September operating profit, on track for the lowest contribution since 2010 and down sharply from 68 percent in 2013. Market share is expected to slip below 20 percent this year, from 24.6 percent in 2013, according to research firm Trefis.”
Read more in the full article here.
MacDailyNews Take: It’s too late for Samsung in smartphones now. They had their run (thanks to an inept, antiquated legal system and confused consumers). But, that run is over now. Smartphone buyers have wised up and an entrenched, debilitating culture cannot be turned around on a dime.
All iPhone knockoffs, including Samsung’s, pale in comparison to the real thing.
Beleaguered Samsung to attempt to knock off Apple iPhone’s 3D Touch – December 14, 2015
Beleaguered Samsung names new cellphone head in bid to stem market share losses to Apple iPhone – December 1, 2015
Beleaguered Samsung axed 5,000 employees over last year – with more cuts on the way – November 20, 2015
Apple to close in on Samsung in worldwide smartphone market share in 2016 – researcher – November 20, 2015
Apple’s iPhone: The most absurd dominance ever and it’s getting even more absurd – November 19, 2015
Apple’s iPhone can soon reap 100 percent of world’s smartphone profits – November 17, 2015
Apple’s iPhone owns 94% of smartphone industry’s profits – November 16, 2015
Ben Bajarin: ‘Samsung will be out of the smartphone business within five years’ – November 2, 2015
Huge crowds line up in Samsung’s backyard to get iPhone 6s/Plus in South Korea – October 23, 2015
Struggling Samsung to see first-ever year-over-year drop in smartphone shipments in 2015 – October 15, 2015
Study: iPhone users are smarter and richer than those who settle for Android phones – January 22, 2015
[Thanks to MacDailyNews Reader “Dan K.” for the heads up.]