Samsung has long ruled the smartphone market. But its dominance is gradually slowing down with new smartphone players joining the market. According to a recent IDC report, Samsung, despite being number one contributor, had lower volumes of shipments, while its latest flagship releases Galaxy S6 and S6 Edge have been underwhelming. Players such as Huawei, Xiaomi and ZTE, on the other hand, had higher shipments. Evidently, Samsung is going downhill, but how badly the company has been hit by changing market dynamics? We may believe Samsung may lag behind in the race at some point, but according to analyst Ben Bajarin, the company is grappling with The Innovator s Dilemma and is predicted to be out from the smartphone business within next five years. Also Read - 5 tips to keep in mind before buying a second-hand smartphoneAlso Read - Samsung Galaxy S21 series cannot update seamlessly like OnePlus, Xiaomi phones
“When you ship the same operating system as your competition you are only as good as their lowest price,” Bajarin says. Also Read - Samsung Galaxy F62, Galaxy M02 support page goes live in India
The Innovator’s Dilemma mainly refers to the situation where early innovators are challenged by the competition who offer much affordable products with similar features. When the market starts to embrace such good enough products, early innovators fail to push their premium innovation as a ‘good enough’ mentality sets in.
According to Ben Bajarin, there are multiple factors that have led to this situation. However, it s primarily new Android players who are offering affordable devices at par with Samsung s. There is absolutely nothing they can do to fix the downturn in their premium handsets. No amount of innovation will save them because the good enough mindset has settled into Android land, he writes.
Another interesting point the analyst makes is that the arrival of low-cost good-enough devices was supposed to impact Apple‘s iPhone but it has hit Samsung instead, mainly because it is offering devices running same operating system (Android) that other budget smartphone makers are offering. He also points out Samsung had already realized this and made attempts to push its Tizen operating system, but evidently didn t succeed.
Android s new premium price point is between $300-$400 and the new mainstream Android smartphone price point is under $300. No other Android OEM, Samsung included, will sell in volume anything above those prices. At those prices, cutting edge innovation will be void, meaning the gap between iPhones and Android will grow, he further writes.
Ben Bajarin s prediction about Samsung s demise in the smartphone market may seem bit far stretched right now. But, look at the trend, once major smartphone brands such as Sony and BlackBerry are headed for the same fate. While Samsung still has a lot of other businesses, do you think Samsung s failure in the smartphone market is inevitable? How can the company pull a turnaround in the near future? Let us know in the comments section below.