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For the past few years, ii companies take deemed for nigh every flake of profit in the smartphone business: Apple and Samsung. Even this comparison, however, is misleading, since information technology implies that the ii companies split the market more than-or-less as. In reality, Apple captures the overwhelming majority of the turn a profit. Now, one analyst is predicting that slumping sales at Samsung could lead it to abandon the Android market altogether.

The argument is straightforward: Because Samsung doesn't own its own operating system, information technology tin can't preclude third-party manufacturers from slipping in and cutting prices while offering equivalent products. It besides explains why Samsung attempted to create its own Tizen OS, even though that didn't work out in the end. Regardless, this creates a race-to-the-lesser mentality that favors depression-toll Chinese manufacturers like Huawei and Xiaomi over the likes of Samsung. Non coincidentally, information technology too favors companies like MediaTek and Rockchip, and we've seen SoC sales from these vendors boom in contempo years, as the carriers that employ them gain market place share worldwide.

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Samsung dominated for years, but has lost market share to upstart manufacturers

Once the market has decided that "skilful enough" devices are actually good plenty, the thinking goes, Samsung can no longer maintain margins and the value proffer for Android collapses. I don't think the writer is entirely wrong — just pinning all of Samsung'southward issues on the fact that it doesn't control Android is simplistic.

First, Samsung manufacturers dozens of devices, and while some of these devices share chassis and components, information technology's inevitably going to incur overhead as a event. Each device requires its own updates and its own testing, which is 1 reason why it takes carriers and so long to release their own Bone updates, and why security patching so oftentimes falls through the cracks. Every Android device requires its own commuter stack and hardware certification because even like phones may use different components, and those components require their own drivers and software to work optimally. Part of the reason the company finds itself having difficulty competing is because it'southward chosen (or forced, depending on carrier pressure for "exclusives") to blanket the Android handset market with dozens of devices a year, even when the performance of that hardware is poorly differentiated and unexplained.

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Android fragmentation. Every blue box is a Samsung device.

Compare the list of devices Samsung makes available on AT&T'due south network if you search past carrier confronting the equivalent Apple nautical chart.

Samsung has a grid of several dozen smartphones (I stopped counting later on 18) ranging from the relatively new Annotation 5 and S6 Edge+ to the ancient S4 and S4 Zoom. Autonomously from storage options, the devices aren't meaningfully differentiated in any mode. Every phone is listed as a virtually-perfect star rating. In that location's no meaningful way to sort phones by capabilities and no meaningful information is displayed in the filigree format.

Now, compare that to what Apple offers in its "Cull which iPhone is correct for y'all" link:

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Apple tree'due south presentation isn't perfect, but it blows Samsung out of the water.

Very, very few buyers will consult an exhaustive list of Samsung or Apple products earlier making a determination, but the sheer number of Samsung devices on the market place make information technology incredibly hard to know which devices to recommend. I work in tech for a living, and I regularly find AT&T offering Samsung smartphones I've never heard of. A little Googling typically proves that these are niche products with an extra feature or two, just the sheer volume of hardware makes it less likely that anyone working in a prison cell phone store is going to be able to guide customers straight to the "correct" product for them.

I'd argue part of the reason Samsung is losing the high-terminate market is because Samsung offers a ridiculous volume of high-end hardware. Over at AT&T's own website, there are v new iPhones for sale. The iPhone 6S Plus starts at $749, while the old iPhone 5S is now $449. Samsung's Galaxy S6 Edge+ starts at $815 and none of the S6 family is less than $585 off-contract. AT&T doesn't offer a Samsung Galaxy device for $500, though the Galaxy S5 at $519 is shut.

Samsung's other trouble, nevertheless, is that it has failed to differentiate either its Android software or hardware. UI skins similar TouchWiz tend to be loathed more cheered. The Galaxy S6 came closer to offering custom Samsung hardware than any previous smartphone the company has offered, thanks to an early jump to 14nm, simply information technology'due south still running a stock ARM CPU core. Apple tree chose to begin investing in its ain CPU architecture when it bought PA Semi; Samsung is years behind offering its ain take on ARM (and therefore years backside on being able to differentiate its products with its own hardware).

Samsung is far from the offset hardware vendor to be terrible at building software, just is it strictly Android's fault that the only visitor actually making a profit in the Android phone business organisation hasn't managed to create its own customized software versions that its customers really desire to use? Equally a major hardware vendor, Samsung has ties to companies like Imagination Technologies and Qualcomm. If it wanted to adopt specific GPU technologies and showcase their operation in Milky way devices, information technology'southward got the cash to do so. Heck, it's got the greenbacks to create Samsung-optimized versions of popular mobile titles as a mode of showcasing its own hardware and software.

The recent surge of interest in privacy-focused Android devices from the Blackphone to the Blackberry Priv is evidence that consumers are interested in premium Android devices that offer unique features. Whether that involvement is enough to create a sustainable marketplace is anyone'south guess (I don't think Blackberry is exactly winning polls these days), but at the very least, there's interest in unique features provided around the Android operating organization.

Samsung, in other words, isn't just being pushed out of the market because Android is a modular operating system that invites handset manufacturers to compete. It has besides fabricated some long-term strategic mistakes on price and features that diminish its ability to marketplace its own hardware as distinctive. Saturation-bombing markets with hardware is conspicuously no longer working and it's fourth dimension for a new strategy.