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Analyst sees Samsung leaving the smartphone business in five years

Posted: , by Alan F.

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Analyst sees Samsung leaving the smartphone business in five years
Samsung might be the world's largest manufacturer of smartphones at the moment, but according to one analyst, the company will be out of the industry in five years. This is the prediction made by Ben Bajarin, who says that the manufacturer will face The Innovator's Dilemma. This occurs when an early innovator, like Samsung, faces off in the marketplace with rivals making much cheaper products with the same features as the innovator's products carry.

As Bajarin notes, "When you ship the same operating system as your competition, you are only as good as their lowest price." The analyst says that eventually, the competitors' "just good enough" products start selling as the early innovator stops marketing the premium innovations that got it to the top in the first place.

Right now, the analyst says that new Android manufacturers are offering handsets that are even with what Samsung is selling, but at much more affordable prices. And Bajarin says that nothing Samsung can do will change the situation because the "good enough" mentality is now seen in the Android market. Bajarin says that Samsung knows that this is coming, which is why it developed the Tizen OS.

"If you are not familiar with the Innovator’s Dilemma, it is that, as a market matures, the early innovators get disrupted by competitors who come into their space with lower priced products, similar specs (the specs that matter), and eat into the market share of the early innovator in the category. Once the market embraces good enough products, the innovator can no longer push premium innovations as their value is diminished once a good enough mentality sets in. Android devices in the $200-$400 range are good enough for the masses leaving Samsung’s $600 devices and above stranded on an island."-Ben Bajarin

And if your wondering why Apple is immune to this theory, Bajarin points out that Apple would be going through what Samsung is now except for one key factor. Since Apple is the only phone maker using iOS, it doesn't face cheaper rivals making the same phones at lower prices like Samsung does with Android. The analyst says that if Apple licensed iOS to other handset producers, it would be the innovator with the dilemma weighing it down, and it wouldn't be able to sell the huge number of iPhone units at high prices like it currently does.

source: Techpinions via BGR

115 Comments
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posted on 03 Nov 2015, 02:41 39

1. ThePython (Posts: 897; Member since: 08 May 2013)


Bad analyst is bad.

posted on 03 Nov 2015, 02:51 10

9. NoToFanboys (Posts: 1952; Member since: 03 Oct 2015)


analyst is high.
but who knows, look what happened to nokia.

posted on 03 Nov 2015, 03:40 13

30. nuldolor5x.com (unregistered)


Samsung is present in Every phone. Even iphone has Samsung components. What I see is that Samsung will be able to outs other OEMs from the market in the next 5 years if they start selling their hardware phones like the likes of Xaomi.

posted on 03 Nov 2015, 20:42 1

100. BobbyBuster (banned) (Posts: 854; Member since: 13 Jan 2015)


"When you ship the same operating system as your competition, you are only as good as their lowest price."

No one makes money with Android™

posted on 03 Nov 2015, 08:16 2

60. bubbadoes (Posts: 1153; Member since: 03 May 2012)


i predict that also. they are flat out of ideas. other than emulating apple and producing hundreds of models of phones the train that samsung is on will run out of gas. they produce tvs refrigerators dishwashers watches microwaves dvd players and more. all of which are mediocre

posted on 03 Nov 2015, 08:35 10

62. tedkord (Posts: 12242; Member since: 17 Jun 2009)


Please. Everyone, including Apple, has been lifting ideas from Samsung for several years now.

posted on 03 Nov 2015, 08:55 4

67. techandbeers (banned) (Posts: 110; Member since: 02 Nov 2015)


Let's not act like other companies have blatantly copied as much as Samsung does.

posted on 03 Nov 2015, 15:33 2

86. TechieXP1969 (Posts: 10678; Member since: 25 Sep 2013)


They have an more.

Apple especially!

posted on 03 Nov 2015, 15:32 1

85. TechieXP1969 (Posts: 10678; Member since: 25 Sep 2013)


You're stupid!

posted on 04 Nov 2015, 12:56 1

104. TechieXP1969 (Posts: 10678; Member since: 25 Sep 2013)


Really? Can you show me a phone with better features than the Galaxy S/Note?

Oh, good luck!

posted on 03 Nov 2015, 08:25 3

61. techandbeers (banned) (Posts: 110; Member since: 02 Nov 2015)


How does this make him a bad analyst? He's probably right.

Samsung is losing ground everyday, with low cost manufacturing delivering a comparable product. It becoming increasingly difficult to differentiate yourself in the Android game.

Making an educated observation doesn't make an individual a bad analyst. However, providing zero support for your claim makes the orignal post irrelevant.

posted on 03 Nov 2015, 19:00

99. NoToFanboys (Posts: 1952; Member since: 03 Oct 2015)


In what part did I say that he is a bad analyst?

posted on 03 Nov 2015, 09:04 3

68. lyndon420 (Posts: 4559; Member since: 11 Jul 2012)


Nokia teamed up with microsoft...that's where they went wrong.

posted on 03 Nov 2015, 04:20 5

41. HugoBarraCyanogenmod (Posts: 1225; Member since: 06 Jul 2014)


Samsung is capable and afford to exit smartphone when it's not profitable. Share price will skyrocketing when you stop feeding the loss.

This is why I never support diversified company. They just quit when unable to make money, rather further innovate

posted on 03 Nov 2015, 13:43 7

82. jroc74 (Posts: 6015; Member since: 30 Dec 2010)


I could understand if he said Sony....but Samsung?

posted on 03 Nov 2015, 16:00 2

91. cheetah2k (Posts: 1596; Member since: 16 Jan 2011)


WTF, this article is utter Bull5h1t.

For one, Samsung has Tizen, which they are slowly developing as an OS so they are not locked into Android.

Idiots would write this crap. Not worth the e-paper its written on

posted on 03 Nov 2015, 02:43 29

2. Shubham1221 (Posts: 81; Member since: 29 Jul 2015)


Samsung is not going anywhere.U can see Samsung selling smartphones even after 20 years:)

posted on 03 Nov 2015, 02:49 9

7. yyzamin (Posts: 166; Member since: 26 Aug 2015)


That's what people said about Nokia 10 years ago!

posted on 03 Nov 2015, 02:51 18

10. keithtae (Posts: 442; Member since: 25 Mar 2015)


who said that 10 years ago?

posted on 03 Nov 2015, 16:01 2

92. cheetah2k (Posts: 1596; Member since: 16 Jan 2011)


Is this the same analyst that said Blackberry would stop making phones in 5 years, 10 years ago?

posted on 03 Nov 2015, 03:07 4

14. AlikMalix (Posts: 6289; Member since: 16 Jul 2014)


Imagine where Nokia would have been if they went with Android, or beat Google to the touchscreen with their own mobile OS after Apple released their first iPhone.

I'm actually rooting for Samsung to go all-in on Tizen. They will steal half of Android in first 2 years.... And who knows without the fragmentation, there would be a good alternative for iOS for me...

posted on 04 Nov 2015, 12:58

105. TechieXP1969 (Posts: 10678; Member since: 25 Sep 2013)


Nokia wasn't going to beat Google. But yes, I do agree if Nokia had chosen Android for most of its phones and maybe just had the Lumia with Windows for an option, they would have been still around, and Samsung and Nokia would be the top selling Android. Samsung could stop making cheap phones and just sell the S/Note

posted on 10 Nov 2015, 16:12 1

112. jontaylor07 (Posts: 169; Member since: 12 Oct 2015)


If Nokia had made good decisions, they would have done better, whether with WP, Android, or their own OSes which were praised at the time. Nokia made a lot of mistakes, and Samsung could do the same. It's not like Android is that profitable anyway.

posted on 03 Nov 2015, 03:22 9

21. Shocky (unregistered)


This is from a so called analyst, well it may be true anything could happen the chances are very low, analysts are meant to predict things that I likely to happen based on evidence and there is nothing to support this.

So this analyst has failed.

posted on 03 Nov 2015, 03:27 12

23. Jason2k13 (Posts: 1217; Member since: 28 Mar 2013)


Theres a big difference between Samsung and Nokia, you see Nokia just sold phones to make most of their profit, while Samsung makes everything from phones, Fridges, TV's and even airplane parts. In short Samsung will always have brand recognition and has many ways to survive while Nokia just relied on their phone division.

PS: this analyst is drunk.

posted on 03 Nov 2015, 04:25 3

42. HugoBarraCyanogenmod (Posts: 1225; Member since: 06 Jul 2014)


Because Samsung capable to sell others, if xiaomi Huawei and Lenovo able to sell 4GB ram 2k display with 6000MAH smartphone with $50, I bet Samsung is smart enough to ditch the smartphone rather further compete and bleeding the money that can invest in exynos chip industry.

posted on 03 Nov 2015, 07:06

59. bur60 (Posts: 853; Member since: 07 Jul 2014)


You dont understand the bigger picture. Because of that reason, it would be more likely for Sammy. If Samsung drops phones, their profits would skyrocket right now. Nokia had the opposite problem.

posted on 03 Nov 2015, 03:31 4

26. korean411 (Posts: 79; Member since: 04 May 2009)


but nokia didn't produce parts to their competitors. samsung is. samsung will be in the business at least for another 10 years because of that. if samsung goes out of the business like the analyst says the exact same thing can be said for apple but i hardly doubbt that is going to happen. what i think samsung is going to do in the next couple of years is invent another category in which their competitors are having difficulties with and excel in that. basically the same thing they did with note.

posted on 03 Nov 2015, 15:49 4

87. TechieXP1969 (Posts: 10678; Member since: 25 Sep 2013)


Nokia killed themselves off by selling out to Microsoft instead of being an Android OEM. Samsung isn't that stupid.

Samsung has too many carriers and countries that depend on their phones. I can see them having more difficulty selling phones in China, but not anywhere else.

In 5 years Samsung will still be the top selling Android OEM. That's a lot of money for Samsung to give up in just 5 years. This analyst is stupid.

posted on 10 Nov 2015, 14:55

110. chenski (Posts: 447; Member since: 22 Mar 2015)


They are already having difficulties in china, when chinese manufacturers become more recognised globally, their cheaper phones will push samsung out

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