Samsung is undoubtedly one of the major players in the global mobile market but despite what most people see on the outside, all is not well with the company. In a market where innovation drives everything, Samsung has managed to leave a blazing trail but the truth remains that the company has struggles of its own.
Competition isn’t the only factor killing the company. China is one of the largest markets in the world and Samsung’s place has been taken by competitors. The low-end market in China is ruled by Xiaomi and even the high end market which Samsung dominated is being threatened by companies like the same Xiaomi, Huawei, Asus and many others.
Declining mobile division profit
Samsung is a pretty large company and the mobile division used to be the most profitable. In 2013, Samsung’s mobile division contributed 68% of the company’s total profit. Between January to September this year, the mobile division was only able to contribute 39% of the company’s total profit. Competition has forced the company to drop prices and of course, Samsung global market share is expected to fall below 20% from the 24.6% it enjoyed in 2013.
It is not actually an overstatement to say Samsung is indeed struggling.
However, tough competition isn’t the only problem Samsung has; there are problems buried deep within the structure of it’s mode of operation.
Too much focus on hardware
According to a report on
Reuters, some serving executives in Samsung and a number of those who have worked with the company before revealed a major reason why the company is facing a decline.
Samsung has failed to build a viable software platform that’s scalable. They revealed that Samsung’s lack of expertise in software development is a major cause of the company’s woes. A former employee of the company who chose to be anonymous said:
“ Samsung’s upper management just inherently doesn’t understand software. They get hardware – in fact, they get hardware better than anyone else. But software is a completely different ballgame.
It is said that Samsung fails to support innovation even within the company. A certain source told Reuters:
‘ There’s a lot of distrust of top executives who can actually implement stuff that is more of a software and services offering.
Samsung has a Milk video steaming service which was shut down. ChatOn too is gone and this sort of validates these revelations.
Despite this, the company seems to be getting a few things right. Samsung Pay is becoming more accepted in Korea and the US. Other software solutions too like Tizen OS are slowly getting more popular.
It should be noted that Samsung still remains one of the most prominent companies in the mobile industry right now and the decline its mobile division is facing presently is not enough to totally collapse the company.
Source : Geek NG
Posted by tboixy
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