Tag Archives: Samsung

Sucks to be Samsung

From Bloomberg:

Samsung Electronics Co. may accelerate a push into wearable devices and home appliances that communicate wirelessly after its quarterly profit plunged 60 percent because of stagnating smartphone sales.

Operating profit fell to 4.1 trillion won ($3.8 billion) in the three months ended September from a record 10.2 trillion won a year earlier, the Suwon, South Korea-based company said in a regulatory filing. Sales fell about 20 percent as the biggest smartphone maker ceded share in Chinaand India to local rivals.

Sucks to be Samsung

From engadget:

Samsung’s marketing budget has always been vast, but in the last quarter it was far larger than even the manufacturer itself would have liked. The company admits that it’s been forced to spend extra money on promotions for older and lower-end devices that have been filling up its warehouses due to “weak demand.” This dip in trade, combined with the extra spend on publicity, is causing the company’s recent, gradual profit decline to quicken: it now expects to earn around 24 percent less this quarter than it did a year ago, with underlying sales down by an estimated 8-11 percent.

Samsung claims the main underlying causes are stiffer competition in Europe, especially in the low- and mid-range parts of the market (presumably from the likes of Motorola), as well as a tougher climate in China, where many buyers are choosing to hold out for 4G phones rather than picking up current 3G models. The manufacturer also says that its 7- and 8-inch tablet sales, which have already been suffering from a slow upgrade cycle, are further being cannibalized by sales of 5- and 6-inch phablets.

There is an interesting side-note to the Bloomberg story that broke this news. According to John Gruber, the original Bloomberg headline was “Samsung Profit Misses Estimates as Cheap Phones Struggle,” which you can see if you look at the story’s URL  But if you look at the current headline on the story you see something entirely different: “Samsung Sees Phone Rebound After Earnings Miss Estimates.” Huh?

Meanwhile, AAPL stock is up 24% over the past three months.

Disclosure: I am long AAPL.

Apple v Samsung

Apple announced its first iPhone, in 2007. In the spring of 2010, Samsung reacted by releasing a smartphone unlike any it had produced to date, dubbed the Galaxy S. And Samsung’s new smartphone clearly cloned many of the features of Apple’s iPhone. Samsung’s copying eventually resulted in multiple lawsuits filed by Apple claiming patent infringement on the part of the Korean firm.

Now, Kurt Eichenwald has written a detailed history of the battles between the two companies. And he has uncovered significant evidence that Samsung has long been a serial patent infringer.

Here is an excerpt:

According to various court records and people who have worked with Samsung, ignoring competitors’ patents is not uncommon for the Korean company. And once it’s caught it launches into the same sort of tactics used in the Apple case: countersue, delay, lose, delay, appeal, and then, when defeat is approaching, settle. “They never met a patent they didn’t think they might like to use, no matter who it belongs to,” says Sam Baxter, a patent lawyer who once handled a case for Samsung. “I represented [the Swedish telecommunications company] Ericsson, and they couldn’t lie if their lives depended on it, and I represented Samsung and they couldn’t tell the truth if their lives depended on it.”

* * *

Across Samsung, the message was heard: the company needed to come out with its own “iPhone”—something beautiful and easy to use with just that dollop of “cool”—and fast. Emergency teams were thrown together, and for three months designers and engineers worked under enormous pressure. For some employees, the work was so demanding they got only two to three hours of sleep a night.

By March 2, the company’s Product Engineering Team had completed a feature-by-feature analysis of the iPhone, comparing it to the Samsung smartphone under construction. The group assembled a 132-page report for their bosses, explaining in detail every way the Samsung phone fell short. A total of 126 instances were found where the Apple phone was better.

No feature was too small for comparison. A calculator image could be made bigger on the iPhone by rotating the device in any direction; not so with Samsung’s. On the iPhone, the calendar function for the day’s schedule was legible, the numbers on the image of the phone keypad were easy to see, ending a call was simple, the number of open Web pages was displayed on-screen, Wi-Fi connection was established on a single screen, new-e-mail notices were obvious, and so on. None of these were true for the Samsung phones, the engineers concluded.

Bit by bit, the new model for a Samsung smartphone began to look—and function—just like the iPhone. Icons on the home screen had similarly rounded corners, size, and false depth created by a reflective shine across the image. The icon for the phone function went from being a drawing of a keypad to a virtually identical reproduction of the iPhone’s image of a handset. The bezel with the rounded corners, the glass spreading out across the entire face of the phone, the home button at the bottom—all of it almost the same.

In fact, some industry executives worried about the similarities. Earlier, on February 15, a senior designer at Samsung told other employees about such observations from Google executives at a meeting with the Korean company—they suggested that changes be made in certain Galaxy devices, which they thought looked too much like Apple’s iPhone and iPad. The next day, a Samsung designer e-mailed others at the company about the Google comments. “Since it is too similar to Apple, make it noticeably different, starting with the front side,” the message said.

The article most definitely is worth a careful read.  And the shamelessness of Samsung is on display throughout.

Tech quote of the day

While there are probably some people who go out to shop for the best Android phone, I suspect that most people want to know which phone is best of all, whatever operating system it runs. In other words, how does the Galaxy S5 compare to the iPhone 5S, Apple’s six-month-old flagship device and the champion to beat?

The answer: Not very well. I’ve been using the new Samsung for about three weeks, and while I do think it is the best Android phone you can buy, it sure isn’t the best phone on the market. By just about every major measure you’ll care about, from speed to design to ease of use to the quality of its apps, Samsung’s phone ranks behind the iPhone, sometimes far behind. If you’re looking for the best phone on the market right now, I’d recommend going with the iPhone 5S.

* * *

. . . I do fault Samsung for the slipshod manner in which it introduced fingerprint scanning. I’ve been using the iPhone’s fingerprint sensor for the last six months, and it has worked about nine times out of 10 for me. The Galaxy S5’s finger sensor is unusable. It has failed to recognize my finger just about every time I have tried it. It has been so terrible that the sensor feels more like a marketing gimmick than a legitimate feature. And it makes me wonder about Samsung’s capacity to keep up with Apple’s innovations.

– Farhad Manjoo, writing in the New York Times.

It sucks to be Android

And it sucks particularly if your Android device is running version 4.1.1 of the operating system. If so, you are fully exposed to Heartbleed.

Millions of smartphones and tablets running Google Inc. (GOOG)’s Android operating system have the Heartbleed software bug, in a sign of how broadly the flaw extends beyond the Internet and into consumer devices.

While Google said in a blog post on April 9 that all versions of Android are immune to the flaw, it added that the “limited exception” was one version dubbed 4.1.1, which was released in 2012.

Security researchers said that version of Android is still used in millions of smartphones and tablets, including popular models made by Samsung Electronics Co., HTC Corp. and other manufacturers. Google statistics show that 34 percent of Android devices use variations of the 4.1 software and the company has said more than 900 million Android devices have been activated worldwide.

Samsung are dicks (as is David Ortiz)

Everyone has heard about and probably seen the selfie taken by Ellen Degeneres at the Oscars. It was presented as a spontaneous event, but it actually was set up by Samsung in advance, and Samsung was a sponsor of the show. The picture Ellen took was taken on a Samsung phone, but backstage she was using her own phone, an iPhone.

Last week, David Ortiz took a selfie of himself with the President during a visit to the White House. Once again, it came out that it was a publicity stunt set up by Samsung, and Ortiz took the photo pursuant to a contractual arrangement with Samsung.

The effects of all this:

  1. It is now totally clear to all people that Samsung is simply shameless and rude.
  2. The White House does not take kindly to photographs of the President being used by businesses for their own profit.
  3. The White House may now ban all Presidential selfies.

iPhone captures highest market share in US

comScore, Inc. (NASDAQ: SCOR), a leader in measuring the digital world, today released data from comScore MobiLens and Mobile Metrix, reporting key trends in the U.S. smartphone industry for December 2013. Apple ranked as the top smartphone manufacturer with 41.8 percent OEM market share, while Google Android led as the #1 smartphone platform with 51.5 percent platform market share.

Top Smartphone OEMs
3 Month Avg. Ending Dec. 2013 vs. 3 Month Avg. Ending Sep. 2013
Total U.S. Smartphone Subscribers Age 13+
Source: comScore MobiLens
Share (%) of Smartphone Subscribers
Sep-13 Dec-13 Point Change
Total Mobile Subscribers 100.0% 100.0% N/A
Apple 40.6% 41.8% 1.2
Samsung 24.9% 26.1% 1.2
Motorola 6.8% 6.7% -0.1
LG 6.6% 6.6% 0.0
HTC 7.1% 5.7% -1.4

Full information here.

Samsung calls “Crisis Awareness” meeting

It appears that Samsung believes that its current marketing efforts are falling short in the mobile space. Therefore, they are increasing the total amount spent on marketing to more than $14 Billion. They have also called for a management team meeting, including 600 employees, to discuss “crisis awareness.”

 

More at Apple Insider.

And one more tidbit to put the pressure on Samsung: in October, 76% of all new smartphones sold in Japan were Apple’s 5S/5C models.

Disclosure: I am long AAPL.

Tech firms indicate interest in Blackberry purchase

Several days ago, I suggested that Apple might want to evaluate making an offer for some or all of the intellectual property owned by Blackberry. Now, it turns out that Cisco, Google, Intel, LG, Samsun and SAP are nosing around Blackberry, presumably kicking the tires and looking for a bargain. No mention of Apple, at this point.

Apple is number 1 in the US

Apple is now the largest mobile phone maker in the United States, according to Strategy Analytics and this article in Bloomberg.

Apple sold 17.7 million mobile phones in the U.S. during the fourth quarter, a 38 percent jump from a year earlier, research firm Strategy Analytics said today in a statement. That gave it 34 percent of the market, topping Samsung, which sold 16.8 million handsets for a 32 percent market share. Total shipments grew 4 percent in the quarter to 52 million phones.

Announcement of the Samsung Galaxy Gear

So, yesterday Samsung previewed the release of it’s so-called “smart watch” named the Galaxy Gear. It will reportedly go on sale in October for $299.

The Gear is neither smart nor attractive. And it is not cheap at a price of $299.

Here is an excerpt from The Verge on their reaction to the Gear:

There are a couple of significant downsides that temper my enthusiasm for the new Gear. First and foremost is the speed and intuitiveness of the user interface — or rather, the lack thereof. There’s a tangible lag to anything you do with the Gear, while the swipe gestures are hard to figure out and do different things depending on where you are in the menus. Additionally, the speaker built into the buckle is too quiet and makes the old sci-fi action of conducting a phone call via your watch a possibility only in quiet areas; it also doesn’t play back any music, it just controls output on your connected device. Most of all, however, I find it hard to justify spending the $299 asking price on an accessory like the Galaxy Gear. It’s too dependent on its parent device for functionality — which will cost you a fair amount too — and, like all other smartwatches, fails to truly live up to the “smart” part of its name.

Also important will be the Galaxy Gear’s battery life. It does use the Bluetooth 4.0 Low Energy standard to communicate, but at 315mAh its battery is decidedly small. Samsung promises “about a day” of endurance from the Gear, but by the end of our briefing with the company, the cameras on most of its demo units were refusing to turn on due to the watches running low on power.

Sam Grobart provides a similar reaction at BloombergBusinessweek:

There is one thing the Gear doesn’t seem to have: a purpose. This is true for all smartwatches, which tend to be liked more in theory than in practice. Ever since Chester Gould created Dick Tracy, our collective consciousness has longed for the day when wrist-borne communicators would appear in real life. But what if Gould was wrong? There have been plenty of attempts at hybrid watches before, combining the capabilities of phones, calculators, and televisions with the time-keeping machines we already wear on our arms. Yet none so far—not the attempts from Sony (SNE), from startups, or even Samsung itself—have cracked the code of making a small computer for your wrist that’s actually appealing.

Here are a few reactions via Twitter:

Market share v. profits

John Kirk has posted a terrific piece describing how large swaths of tech reporters seem unable to focus their “analysis” on anything other than market share. While Android’s world-wide market share is larger than Apple’s iOS, the higher market share is meaningless if the much higher profitability of iOS continues. After all, profits are the goal of businesses.

The article is worth a full read.

Disclosure: I am long AAPL.