x PhoneArena is hiring! Reviewer in the USA
  • Hidden picShow menu
  • Home
  • News
  • Analyst sees Samsung leaving the smartphone business in five years

Analyst sees Samsung leaving the smartphone business in five years

Posted: , by Alan F.

Tags:

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
  • Options
    Close




posted on 03 Nov 2015, 02:41 39

1. ThePython (Posts: 871; Member since: 08 May 2013)


Bad analyst is bad.

posted on 03 Nov 2015, 02:51 10

9. NoToFanboys (Posts: 1129; 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: 815; 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: 10292; 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: 8478; Member since: 25 Sep 2013)


They have an more.

Apple especially!

posted on 03 Nov 2015, 15:32 1

85. TechieXP1969 (Posts: 8478; Member since: 25 Sep 2013)


You're stupid!

posted on 04 Nov 2015, 12:56 1

104. TechieXP1969 (Posts: 8478; 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: 1129; 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: 3878; 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: 1012; 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: 5987; 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: 1507; 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: 50; 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: 62; 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: 341; Member since: 25 Mar 2015)


who said that 10 years ago?

posted on 03 Nov 2015, 16:01 2

92. cheetah2k (Posts: 1507; 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: 5095; 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: 8478; 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: 162; 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 (Posts: 2250; Member since: 16 May 2012)


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: 1150; 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: 1012; 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: 833; 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: 78; 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: 8478; 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: 354; 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

posted on 03 Nov 2015, 02:45 12

3. Zylam (Posts: 663; Member since: 20 Oct 2010)


What on Earth will happen to Sony, HTC and LG? They all need to drop the skin garbage and stop wasting money on random apps. Just make beautiful hardware with stock Android and only have 3 devices: Hugh, mid and low end and support them well.

posted on 03 Nov 2015, 03:41 2

31. itsdeepak4u2000 (Posts: 3717; Member since: 03 Nov 2012)


LG is not on a decline so much, Blackberry fits the list very well though it's non Android OEM except Priv.

posted on 03 Nov 2015, 04:03 3

39. korean411 (Posts: 78; Member since: 04 May 2009)


HTC: they make good phone but the problem is that they don't know how to market their phones. reasons why you don't see advertisements from them.

LG: it really isn't there fault. there only crime is that they don't have as much resources as samsung. basically they are a small company compared to samsung in everyway like marketing, research and development and etc.

Sony: they make good phones but their marketing is terrible. they still market heavily in japan instead of having an effort to market globally.

It isn't the hardware or software they make these company bad because they do make pretty good hardware and decent software. the problem lies in the companies decision on what they should do with their product

posted on 03 Nov 2015, 09:04 1

69. Shocky (Posts: 2250; Member since: 16 May 2012)


HTC haven't made a good phone since the HTC One M7, they got lazy and ignored users and now they're paying the price.

LG make poor design choices, the phablet market has limited appeal and the size will put users off, add to that the slower performance and questionable build quality. (Leather back with plastic build)

Sony continue to use the same boring design, pushing a 4K display on a phone was a poor choice, as well using SN810.

posted on 03 Nov 2015, 06:49 3

55. HouTexan (Posts: 435; Member since: 08 Jan 2012)


That's so stupid. Why would you want 5+ different OEMs running the same, stock Android experience? That is boring as hell, and if that's the case, they all may as well exit if it comes down to that. There's only so much you can do to differentiate yourself in terms of hardware. Stop, dude.

posted on 03 Nov 2015, 12:59

80. Zylam (Posts: 663; Member since: 20 Oct 2010)


Yea because HTC, LG and Sony are making ridiculous amounts of profits from differentiating themselves from skins yea? Everyone knows they run Android and buy them for Android, skins add bloat, reduce preformance, cause inconsistency between Android phones and Android ui and make it harder for the OEM to Support and update their phones, specially these days when so many exploits get discovered.

Stock android has matured more than enough, and there's no shortage of ways to customize Android to your liking OK your own, however going skinned to stock for someone is harder than just adding a custom launcher on stock Android.

The only little bit of money left in Android for Oems is the hardware, not software. Every Oem has admitted it's skin is what people dislike the most and usually announce it as a feature when they say they've tonned down the bloat. Unfortunately for the main Oems like HTC, their hardware is being matched by Chinese Oems that are fine with making a tiny profit from hardware and that's the biggest problem in Android for Oems right now.

posted on 03 Nov 2015, 18:57 2

98. avalon2105 (Posts: 235; Member since: 12 Jul 2014)


Yeah, stock Android is so mature it doesn't have a file manager or any sort of multitasking features (2 way, 4 way split screen, small apps, pen features), multimedia formats support (Google Play Music, Google Play Movies and Google Photos are terrible) and every major OEM (Samsung, LG, Sony, HTC) has better and more feature rich multimedia suite. And shoving every website as an app instead of a browser bookmark is a definition of adding bloat. Google Maps, Translate, Drive, Earth, G+, Gmail and Youtube should all be just bookmarks inside Chrome without wasting single MB of storage space. And lets not compare Google Camera to what LG, Sony and Samsung offer (features wise, not image quality wise).

posted on 03 Nov 2015, 02:46 35

4. manojmcn (Posts: 406; Member since: 16 Jul 2015)


Not Samsung, but I think this Analyst is going to exit his profession very soon!

posted on 03 Nov 2015, 04:46 3

43. Tizo101 (Posts: 394; Member since: 05 Jun 2015)


thank you for that comment. It just killed me lol

posted on 03 Nov 2015, 08:38 4

63. tedkord (Posts: 10292; Member since: 17 Jun 2009)


Why? Making silly predictions to generate press is what analysts do.

posted on 03 Nov 2015, 02:48 1

5. yyzamin (Posts: 62; Member since: 26 Aug 2015)


So another words Samsung will start producing Flagship devices on Tizen if they start to loose money and market share on Android?

posted on 03 Nov 2015, 02:48 17

6. megaSUNNY (Posts: 80; Member since: 26 Jun 2012)


Haha...
I'm not a big fan of sammy but i and mostly who have simple mind sense can't even think such huge company moving away that easily. Just a stupid analyst

posted on 03 Nov 2015, 03:04 1

13. Spedez (Posts: 440; Member since: 29 Aug 2014)


It happened to Nokia. HTC will follow soon. Samsung could have the same fate but I think Sony will exit after HTC.

posted on 03 Nov 2015, 03:17 10

17. willywanta (Posts: 206; Member since: 04 Jun 2014)


samsung is smarter, and not as stubborn as nokia or htc.

posted on 03 Nov 2015, 03:43 4

33. ibend (Posts: 3548; Member since: 30 Sep 2014)


or blackberry

posted on 03 Nov 2015, 03:28 5

24. Jason2k13 (Posts: 1150; Member since: 28 Mar 2013)


do you even know what things Samsung sells compared to Nokia?

posted on 03 Nov 2015, 09:07 1

70. Shocky (Posts: 2250; Member since: 16 May 2012)


Samsung is a diverse company, they aren't going anywhere.

posted on 03 Nov 2015, 10:25 1

74. Goldeneye (Posts: 419; Member since: 22 Jan 2011)


Read the article again. The analyst never said that Samsung would disappear as a company, just out of the smartphone business.

posted on 03 Nov 2015, 12:16 1

79. megaSUNNY (Posts: 80; Member since: 26 Jun 2012)


Nokia was a company just in mobile phone areas. Whereas samsung is a hell huge company. It first even matter if they meet with losses in future.
Sony has been in losses since years, but still operates since it has other sources to lead them...

posted on 03 Nov 2015, 02:49 6

8. AlikMalix (Posts: 5095; Member since: 16 Jul 2014)


The only reason Samsung will leave a smartphone business (and that goes to anyone who's in smartphone business) is if they or someone else finds a better solution to smartphones that we have today!!! Even BB assimilated to Android to better their exposure. Samsung is a strong presence - there's no way. There are so many other android mfrs that would leave/die before samsung even considers this... These are probably the same anal-ysts that predict that apple is doomed every time before a new iPhone is released...

posted on 03 Nov 2015, 03:08 1

15. Neros (Posts: 1016; Member since: 19 Dec 2014)


Apple will never be doomed because iphones don't havereal competition. Only smartphones that come with ios are iphones.

posted on 03 Nov 2015, 03:18 3

18. AlikMalix (Posts: 5095; Member since: 16 Jul 2014)


Nothing is impossible... but dont forget apple has good presence now, but they only cater to the wealthy (which is a limited market), Android is getting better and better at being more consumer friendly, and Chinese are undercutting all big guys at their feet with decent phones and easy prices...

Even as a fan, I can tell you, Apple cannot be on top forever - no one can. If anyone can take that spot - Samsung sure can...

posted on 03 Nov 2015, 03:42

32. korean411 (Posts: 78; Member since: 04 May 2009)


i agree samsung can surely has the resources to take the spot back the only thing standing in the way is how they are going to make their future smartphone better. i agree with your statement eventually apple will be in the same position as samsung is in now while another company will take the top spot in that category

posted on 03 Nov 2015, 03:39

29. korean411 (Posts: 78; Member since: 04 May 2009)


the thing is that while there is no direct ios competition against apple, they are competing against all the other smartphones.eventually apple will not be at the top spot and would need to reinvent their product in the coming future in order to grab it back.

posted on 03 Nov 2015, 03:58

37. AlikMalix (Posts: 5095; Member since: 16 Jul 2014)


Exactly... I also think that Apple may licence iOS at some point to select manufacturers (with a very short leash) if it gets critical.

As much as I love to point to Apple's success especially in more wealthy regions - I would love for apple to drop to BB or WP level, just to see what they can do under real pressure.

posted on 03 Nov 2015, 16:00

90. TechieXP1969 (Posts: 8478; Member since: 25 Sep 2013)


Apple will never licenses out iOS. Because A: no one is going to take iOS with a leash like yup can't have better or more features than we offer, or whatever you ad to your phone we get to add to ours.

Nah, it ain't gonna happen. Apple would never reduce itself to just making software for others.

Because first off, they wouldn't be able to offer IOS to just one company of their choice, that would be anti-competitive and the DOJ would be all over it. It would have to stay exclusive to Apple, or be available equally to all vendors.

posted on 03 Nov 2015, 15:58

89. TechieXP1969 (Posts: 8478; Member since: 25 Sep 2013)


You think? I think otherwise. Mac OS was only available on the Mac, so what happened to Apple after Jobs left? Scully licensed out the Mac OS to try to get money which didnt help. Jobs came back, bought all those licenses back. But Apple would never have survived on only mac sales. If it wasn't for the iPod and its siblings the iPhone and iPad, Apple would be gone already.

Apple has all their eggs in one basket. iPhone. if the iPhone sales dropped 50%, Apple would be in trouble. Sure they have the cash to keep going, but that cash reserve would go down quick considering the staff they have and properties they own.

posted on 03 Nov 2015, 15:55

88. TechieXP1969 (Posts: 8478; Member since: 25 Sep 2013)


Agreed. 100%

The problem is, Samsung is the top selling Android OEM. Even though they are struggling, they are struggling far less than others.

The fact is, when names like LG, HTC and Sony fall out the game do to bad sales, those buyers would need an option. One option could be that one company from China. Hauwei or however it is spelled. But that company can't rep[lace 200M phones that Samsung already sells in those other countries.

This company just sold their first phone in the USA under Google Nexus. They have no presence on other countries. So who is going to buy them? Also considering Samsung has already established themselves in other countries and this new company has not.

If the other guys fall, Samsung would gain at least 50% of those sales because they would be the only option in many areas where those phones are sold.

posted on 03 Nov 2015, 02:53 2

11. Baracus (Posts: 223; Member since: 15 Sep 2012)


People will inevitably point to Nokia as example of going from the king to death in a matter of years but Samsung are different because they have their fingers in many pots of the technology world so phone sales wouldn't be that important to their survival.
So I think they'll keep at least some footing in the smartphone world even if it isn't profitable just so they can get products with the Samsung name out there.

posted on 03 Nov 2015, 02:56 1

12. Neros (Posts: 1016; Member since: 19 Dec 2014)


This actually happens as we speak. The sales of samsung's flagships aren't what they used to be. The problem is that back in the day you needed a flagship to make a smartphone run properly. Nowadays even a low-end runs reasonably well. This is why a lot of folks have gone for the cheaper alternative. Having said that, there's still no android smartphone that can match the performance and quality of the galaxy s/note phones. Samsung could always make a lot of money by selling oled panels, exynos cpu chips, and so on. The android market is so oversaturated, it's crazy. Most likely it will be htc, sony, and lg who will leave the market before samsung. They make silly profits on android. Htc and sony generate loses for quite some time while lg makes a few cents on a phone. I believe that cheap Chinese brands are to blame for the current state.

Want to comment? Please login or register.

Latest stories