Samsung’s Vision for the Future Will Hit a Chinese Wall (Premium)

Forget the specifics about Samsung’s new smartphones. What Samsung is really selling this week is leadership and its ability to define a new era for mobility. In this way, it hopes to supplant a sagging Apple and the rise of commodity devices from China, many of which already offer the features Samsung is now touting in its latest devices.

It’s not going to work.

Leadership takes many forms. Today, Samsung leads the smartphone market in unit sales, though that’s threatened by Huawei and perhaps Xiaomi. It leads Apple in bringing new technology to market, often by many years. It has innovated in some key areas, most notably in displays. And it has created an ecosystem of software, services, and peripheral devices that is perhaps unparalleled in the market. Indeed, Samsung in many ways undercuts Google by duplicating and replacing features that it provides directly in Android.

When you put this all together, you see a firm that is evolving to meet and surpass the capabilities of its biggest competitors while trying to define something that is unique Samsung and desirable for customers. In the Western world, only Apple has been truly successful at this, so it’s not coincidental that Samsung has copied that strategy where possible, from the designs of its earliest Galaxy S phones a decade ago to its just-announced Galaxy Buds.

That said, Samsung has come a long way since its me-too early Galaxy S designs. And Apple has, well, slowed down quite a bit as well. Samsung has long held the technological edge, and its flagship smartphones typically deliver new features many years before you can find them in any iPhone.

But the rise of Chinese-based smartphone giants is a new kind of challenge that will be hard for Samsung to address. In fact, I’d almost feel bad for Samsung … if it weren’t for the fact that these companies are simply doing to Samsung today what Samsung did previously to Apple: Copy bald-facedly where necessary and then move more quickly to adopt new technologies.

Huawei, in particular, builds handsets that are every bit as impressive as Samsung’s, right down to the curved displays that Apple still hasn’t duplicated. And its flagships delivered features like in-display fingerprint readers even before Samsung did so with the S10, and they provide dramatically better camera systems. They’re also a lot less expensive.

Samsung’s response is, well, classic Samsung. It’s doing more.

Instead of simplifying, Samsung has expanded its S10 lineup to include at least two new models, one of which is 5G-specific and one that is less expensive than its other flagships. That latter device appears to be aimed at the cost-conscious would-be smartphone buyers that scuttled Samsung’s and Apple’s fortunes in late 2018. A better approach, I think, would be to simply lower prices on the existing products, not offer a cut-rate iPhone XR-like handset with a compromised feature-set.

What I am impressed by is Samsung’s growing ecosystem. Unlike Apple’s lock-in strategy, which I’ve described as a “one-way dead-end street,” Samsung has built its own platform on top of a more open system that it has in some cases heavily modified. By sticking within this ecosystem, customers get a better overall experience, a “better together” strategy that fans of Microsoft, Apple, and other companies will easily recognize. That it’s not required is, perhaps, Samsung’s Achilles Heel.

Samsung’s ecosystem has humble roots. It started with a lame “skin” on top of Android but quickly expanded to many apps and services and, most recently, a complete rethinking of the Android user experience that is, in many ways, even cleaner than that which Google offers. It includes a digital personal assistant, Bixby, which was initially created by the inventor of Siri after he grew tired of Apple’s inability to improve the technology, and it’s expanding to be more open, to support new languages and new capabilities, and to be used in smart speakers and other devices. It also includes a growing range of hardware peripherals, the most exciting of which, the Galaxy Buds, is, yes, an Apple rip-off. But one that Samsung’s most loyal customers will be quite happy to buy.

And yet.

As the first of the leading smartphone makers to announce new devices this year, Samsung is in an odd position to be outplayed by later announcements. Its first folding phone, the Galaxy Fold, is both too expensive and surprisingly limited by its postage stamp-sized exterior display. The performance, battery life, and two-way charging capabilities of the Galaxy S10 lineup will no doubt be matched, if not surpassed, by rivals both next week at MWC and later in the year. But I feel that, for Samsung, being first is important to its image. It is literally the reputation on which it is selling its products.

But the future remains uncertain. Samsung may end 2019—or 2020, at least—as the second-biggest smartphone vendor worldwide by volume, not the first, ending a decade of dominance. It can still “lead” from such a position—Apple certainly did just that—but those Chinese smartphone firms are aggressive enough to prevent that from happening. I suspect that, in the future, Samsung’s firsts will become fewer and further apart. And that the firm will find itself in the same position of many one-time tech leaders—from Microsoft to Apple—of finding itself watching the market it once led from the outside.

For now, Samsung can enjoy its moment in the sun, and the successful launch of a great range of new handsets and other devices. But where Samsung sees the start of a new Galaxy decade, it’s equally likely that this is the beginning of the end. And that its role in the market will be diminished going forward.