For four years Samsung Electronics Co Ltd has basked in the success of its Galaxy smartphones, making billions of dollars competing with Apple Inc in the premium mobile market.
The coming years are set to be more somber for the South Korean tech giant, as it is forced to slash prices and accept lower margins at its mobile division in order to see off competition from rivals including China’s Huawei Technologies Co Ltd and Xiaomi Inc in the mid-to-low end of the market.
Behind Samsung’s reality-check is the fact it is stuck with the same Android operating system used by its low-cost competitors, who are producing increasingly-capable phones of their own.
—Samsung glamour days over as it fights to save mobile market share, Se Young Lee, Reuters
Having Android running on everything from shitty, bottom-of-the-barrel phones to premium devices is great example of democratizing technology: getting it in everyone’s hands, regardless of income. But how do you differentiate your product if you’re an OEM?
You could argue that if Samsung had always just sold premium hardware they might have avoided having to make their current price cuts. The truth is they (and many other OEMs) have always thrown as many price tiers of Android devices to the wall to see what sticks. This has resulted in Android brand doesn’t conjure up thoughts of amazing, premium devices.
It’s as if Ferrari licensed their body panels and frame to other car makers to put whatever engines and electronics they wanted into them. Sure, you could find better/faster Ferrari versions than others but anyone could get a “Ferrari”.