Analyst: Samsung will be out of the smartphone market within 5 years
When it comes to Android manufacturers there’s no one bigger than Samsung. The company commands the largest market share of shipped Android smartphones at just over 20%, which is a lot considering Android accounts for more than 80% of market share worldwide.
But one analyst has reason to believe that Samsung will soon be forced out of the market, or — at the very least — backed into a corner that they won’t be able to escape. Creative Strategies researcher Ben Bajarin took to Techpinions with a column about Samsung and how they’re following the Innovator’s Dilemma almost to a T.
If you don’t know, the Innovator’s Dilemma was a book and idea spawned in 1997 which describes a situation in which a leading innovator in technology will eventually fall victim to their own leadership. The thought is that while the early innovations will win early sales, the market will eventually mature to a state where more affordable alternatives become “good enough” for the common consumer.
In Samsung’s case, most folks don’t see a need to shell out $600 to $700 for a phone when there are $300 to $400 alternatives which can do much of the same things. We know those phones can’t match Samsung in every category — like having a heart rate sensor, ubiquitous wireless charging or advanced mobile payments with MST — but as long as the phones have the necessities and a few extra bells and whistles people won’t mind missing out.
As such, the analyst believes Samsung will continue their downward trend, with the only way to stop the bleeding being to play ball with everyone else and lower their prices. It’d be hard for Samsung to do that considering the premium nature of their 2015 handsets, of course, so the company would have to decide whether it’s worth giving up their aspirations of creating a top-shelf product in order to sell at a higher volume.
And you may be wondering why Apple hasn’t suffered such a fate considering they, too, typically lead the market in innovation. Bajarin argues that Apple’s ability to scale and turn more profit each and every quarter is thanks to the fact that there is no other iPhone.
Android phones, on the other hand, all offer pretty much the same software experience, with the only differences coming in user experience and user interface customization. Otherwise, nearly everyone has access to all the same apps through Google Play, and it doesn’t make much difference for most folks to be using something from Motorola vs something from Samsung.
Will all this be enough to scare Samsung out of the market within 5 years? That’s a very hard scenario to envision. They probably won’t command nearly as much of the market share as they do now, but it’s hard to believe they’ll exit the market in a few short years, especially when companies like HTC — which investors are now deeming worthless — are still hanging in there.
One thing’s for sure: it’s becoming increasingly hard to fight off the hordes of companies willing to bring these cheap alternatives to market, and unless Samsung can come up with an innovation that absolutely no one can live without (and that no other company can emulate) then they’ll be struggling in this viciously competitive market for quite some time.