Samsung’s importance in keeping Android together but not the same.

Say what you will about Samsung, it’s strategies or it’s Touchwiz UI but its an undeniable fact that Samsung is the largest smartphone seller and if you’re an android fan, you must be thankful that its on your side.

With Samsung shipping more than two times the smartphones during the second quarter than Apple, it is clear that Android is becoming just as important for marketers as iOS.

If you’ve been keeping up with the tech world, you may know that android just recorded its highest market share ever. But sometimes numbers hide the true story. In the world of smartphones, the volume of Android sales tower over the rival iOS platform. Android accounts for over eighty percent of the market, with iOS a far far distant second. With that measure Android is ‘winning’ but that’s not enough.

There are other numbers which should be considered as important as market share. Profit share is good place to start. Not only does this reverse the position of the two platforms, but gives Apple an even larger section of the market with well over ninety percent of smartphone profits flowing to Cupertino. Income through the app store is another huge win for Tim Cook’s team. When you look at a collection of economic indicators, Android struggles to match iOS.

Apple-dominated-with-91-of-the-profits-in-the-smartphone-industry-last-year (1).jpg

 

Nevertheless Android remains in touch with the top of these tables thanks to a single company.

“The installed base of Android users has risen dramatically within which Samsung Android smartphones have a huge share as Samsung sells more Android phones than many other Android OEMs combined, so marketers cannot afford to ignore this huge and potential total addressable market,” said Neil Shah, senior analyst for the global wireless practice at Strategy Analytics, Newton, MA.

Apple rules the high-end space, Samsung fights the good fight, and everyone else is elsewhere. Imagine Samsung was to disappear from the android camp, most of you would say some other OEM will replace it, but its not as easy how it looks.  If we take away the choice of a Samsung smartphone, one single OEM will not be the next best choice of all the Samsung users and fans. Some would go Huawei, some LG, some here and some there.

Without Samsung, Android would be left with a raft of smaller manufacturers (such as Huawei) providing the occasional point of interest at the high-end, and a fleet of budget handsets running on low-margin hardware bulking up the sales.

Increasingly, the Cupertino company is facing accusations that it has lost its innovative edge, with Samsung frequently named as leading the charge in smartphone innovation.

For Better or Worse, Samsung-led Innovation and Trendsetting helped Shape Android

 

Samsung has been in the driving seat of smartphone innovation for quite a while. Some may criticize their stuff everything and see what sticks approach but regardless, this is what has kept the company afloat. Remember the first Note?

Screenshot from 2016-08-22 10-44-26.png

Image Source : GSMArena

Tech Pandits all over the world claimed it was a rather stupid move to make a smartphone with a 5.3″ display because as Steve Jobs put it, ‘it was too big to be a phone and too small to be a tablet’. Whatever you believe, nobody but Samsung had the guts to try that.

Various OEMs have taken a swing at Samsung’s dominance over the years with really really good devices which were in some ways better than Samsung’s offering for that certain year, claiming to be the ‘best’ of not just android but the best smartphone.

But that is just the occasional interest I’ve mentioned before, that these companies produce in the high-end segment. Take Sony for example, regardless of its flaws and what not, I’ve been a fan of the Xperia smartphones. The understated professional boxy look was something that I have loved and so have other fans of the brand. Sony did make a few very good devices and being the brand Sony is, they generated a lot of interest in the tech world but that did not translate into sales.

Motorola has come closest to challenging Samsung in recent years, with its approach of stock android with ‘useful’ and it garnered a lot of interest followed by consumer success for once but its passage through the hands of a number of parent companies has left it without a coherent story or strategy over the last two years.

Google’s own Nexus devices are shining examples of the best of android sitting at the cutting edge of software design with a cult following among tech enthusiasts and the geekaratis. But outside of that, Nexus is a relatively unknown name.

Strip out Samsung, and Android’s strengths lie in Chinese manufacturers such as Huawei, Oppo, Vivo, Xiaomi and the domination of low-cost budget handsets in BRIC territories. Most of these brands are still struggling for a noticeable presence in the US and European markets which are two very important markets for android. Take out Samsung and these markets will be divided between Apple, LG, HTC, and other more established brands than the Chinese counterparts because they guarantee volume sure, but offer little in the way of profit, image, or consumers willing to spend heavily in the third-party ecosystem to reward developers and advertisers. Things which are important in the mature western market. And it is not difficult to assume that most of that high-end market will be quickly taken over by Apple.

Samsung offers an answer to all these questions, and has done for many years. The South Korean company’s innovation is applied to flagship handsets that sell in numbers equivalent to the iPhone. That drive for innovation is backed up by a marketing budget only Samsung can pull off which keeps these devices in the forefront of the consumers mind when they’re out to buy a new Smartphone. Even Apple finds it hard to match up Samsung’s marketing. Without that, a bulk of these customers looking for a high end best of the class smartphone will be going to Apple stores. (now known as just ‘Apple’)

With the raining Chinese manufacturers and aggressively priced offerings, for two years Samsung’s grip in the market was declining and many were starting to predict it to be the fall of Samsung. The S7 family has almost single handedly arrested that fall, and while the markets still have to see how this works out over the second half of the year, the signs are promising.  Of course Samsung is bulking up sales with its mid- and low-range handsets, but they all benefit from trickle-down marketing of the flagship handsets. A fact I have explained in detail before.

The Android ecosystem should be thankful that Samsung has been able to maintain its dominant role, without it Google’s platform would be far weaker in the face of the focused profit-driven approach from Apple. It is a balanced relationship though…  Samsung needs Android as much as Android needs Samsung. Android provides a commonality to Samsung’s devices, the volume of Android devices in the market guarantees that third-party apps will continue to be developed for Samsung’s handsets, and it gives users confidence when buying a Galaxy (at any price point) that it will do what they want it to do.

This relationship lies at the heart of Android’s success and were it to be diluted, it would hurt, Google, Samsung and Android Fans. Google knows it, Samsung has yet to learnt it.

 

4 thoughts on “Samsung’s importance in keeping Android together but not the same.

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