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back to article Samsung hauls in chiefs for 'CRISIS awareness' confab – report

Reports have surfaced that Samsung is calling together 600 of its global managerial staff for a "Crisis Awareness" meeting to be held in mid-December. According to an article by ZDNet Korea on Wednesday, the gathering will be divided into two groups, one being Sammy's display and Device Solutions units, the other being a confab …

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Anonymous Coward

Shipped does not translate to profit.

Could also be a double crisis, the S4 and that watch that everyone is supposed to 'need'.

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Samsung are far more vulnerable than Apple and Google. They don't have a sticky ecosystem and their business is all about shipping hardware within a certain price/performance envelope.

Google have an anchor that keeps them high revenue high profit in their search and advertising business. Those revenues are not going away anytime soon.

Apple have an anchor in the way they occupy the high-end and have such a strong base of high-end users bought into their ecosystem. One of the points that is consistently missed about Apple is that the high end, once you have got there, is a readily defendable corner and works so well in terms of ensuring ongoing business. They have built their brand, have a core customer base with integrated devices and have a huge and comprehensive ecosystem. They "own" the software stack (or at least almost everything it is important to own in the software stack).

Samsung are in the middle between the high and the low end. They don't have their own ecosystem or own their own software stack. They do have an anchor in their various component supply businesses and TV manufacture business but they are low margin and it is a highly competitive space. The vast majority of their revenue is now mobile and tablet and they like these relatively new markets very much.

Samsung can't harm Google just by making a better phone and tablet. Samsung can fair better against Apple, but still don't have the control necessary to beat Apple even if they make a better phone and tablet (getting the high end is hard and they can't compete on ecosystem, they would have to not just equal them but best them consistently over two or three generations of product as well as successfully shift their brand to appeal better to high end users - but the strong iPhone 5S release shows they haven't been able to do that).

But both Apple and Google can squeeze Samsung back into the highly competitive low margin TV and component supply business by making better phones and tablets (Google through third parties and through Motorola). Indeed Samsung are squeezed by many manufacturers snapping at their heals from the low-end. They wanted and needed to get ahead of Apple (tech fanboyism apart - I'm talking about general market/brand appeal of their flagship devices here). However where the 5S is a consolidating release for Apple, can the same be said for the Galaxy S4 and recent Galaxy Gear release? The S4 is a very good phone and occupies the ground it needs to occupy, but it isn't outstanding and the Samsung exclusive innovations are a bit wayward and most aficionados much prefer stock Android. It didn't really take a progressive step over the competition in the way the S3 did before it. As a product release it seems to have lost momentum in the market, whereas the iPhone 5S seems to have been, comparatively speaking, consolidating and grounding for Apple.

Samsung employ corporate strategists. They will know their weaknesses and know fading S4 sales are a bellwether indicator, confirming they are losing momentum at a time and in a way that exposes their vulnerability to a squeeze between the high and low end. They have failed to squeeze through the middle and both Apple and Google have their shoulders firmly in front.

They want to be so much more than a white box "rebrander" of Android handsets. But flagging S4 sales show that so far as the customers is concerned, they are going that way. That's one of the reason they send out researchers to study the queues outside Apple stores (whilst at the same time taking the piss). They are attacking Apple's strengths whilst desperate to find a similar x-factor which makes them beyond being a commodity supplier. For a while it looks like they might have made the cut, but with the S4 being luke-warm and then the Galaxy gear being a big "wah-wa-waaaaa" they can feel it all slipping away from them. All the while Xiaomi is looming ever bigger in the rear view mirror, readying themselves for international launch.

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"They want to be so much more than a white box "rebrander" of Android handsets"

Re-reading my own comment, I've realised this is not phrased properly and as phrased, is too harsh. What I meant to say is they want so much to be in a space where they are perceived as offering value that is distinct from and more than what can be offered by a "white box rebrander." They are of course much more than that (they have strength in depth in their supply chain for a start), but that might all be for naught if it doesn't enable them to consistently deliver more than the competition. I suspect they can see competition like the new Nexus 5 and Moto G is going to start to challenge them in a way they were not challenged before. So far their supply chain has given them an advantage, but not sufficiently in terms of innovation, more in terms of ensuring keenly priced and well specked package across the board. Indeed apart from the good specs for the price, the "Samsung exclusive" parts of the package are to many people even a negative, getting in the way of the pure and superior vanilla Android product underneath. They have had success with the Galaxy note, but the S-Pen has only made a mild contribution to the reputation for innovation I suspect they crave. Not owning the software stack, it still has a tacked on feel. There is the sense they are building on branches of a tree and Google controlling the trunk can at any time lop the branch they are on, off, or grow a new better branch that does the same thing.

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@SuccessCase

tl; dr;

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Excuse me SuccessCase - all good stuff, but could you be a bit more concise? I'm a rambler and a half when I get going, but you could have published that lot in three volumes.

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Re: @SuccessCase

@ZR tl; dw; :)

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Re: @SuccessCase

And here's the modern problem - someone puts a well argued case, but because it runs to more than four words, people don't read it.

I despair ...

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Anonymous Coward

Peak Samsung?

Samsung have gone down the scatter gun approach for many of their handset, however your flagship needs to stand out.

From what I've seen your better off buying the S3 as it is a lot cheaper and you don't gain much of any use by getting an S4.

The S4 is going to look like a stelar performa compared to their watch, shows how sh*t their design is when they haven't got anyone to copy :o

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Re: Peak Samsung?

"From what I've seen your better off buying the S3 as it is a lot cheaper and you don't gain much of any use by getting an S4."

Now match that with the launch of the latest Google and Moto products, and you start to see the crisis facing Samsung. If all the loot is made on the top end handsets, and somebody removes the need to buy your fat-margined top end handsets, then suddenly the profitability of the entire mobile handset division disappears. That's what I would call a crisis.

Nokia and landfill android stop Sammy making money from the low end handsets, the Sammy mid range is outshone by the Google/Moto devices at similar price points, and the S4 may be better but can't compete at that price, in which case Samsung have to slice either volume or price and thence margins.

Which I think is what SuccessCase was saying in the posts above at greater length.

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Anonymous Coward

Interesting timing for the report!

The report comes when a fine is imposed on Samsung in US. One of the reasons could be that Samsung is trying to project that its products are not selling as claimed by competitors and hence not affecting the iPhone sales.

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Anonymous Coward

So Samsung are under pressure from Apple with technically superior phones (let's ignore arguments over iOS and Android for now) and everyone else producing cheaper and just as good Android phones. People will pay a premium for Apple products, build and support - people are realising Samsung are just another Android maker signing up customers for Google.

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So many Anonymous Cowards

To see every single comment as AC, that is unusual.

I'd post AC too but I can't be bothered. The S4 is like the iphone 5S and the Nexus 5, slightly better than their predecessors, but not really enough to make the average person care.

Sure they're all nice phones, but hold them next to what they replace and you're hard pushed to find much to care about.

We're definitely in an incremental increase phase for mobile phones at the moment.

(Not commenting on the Win Phone and Blackberries because I've not used either enough to get a proper feel for them)

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Re: So many Anonymous Cowards

That depends, my Nexus 5 is replacing a Nexus 1, so the improvement is real.

And maybe a S4 would be better, but then not enough to pay 50% more, asking 700€ for a phone is plain silly.

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Re: So many Anonymous Cowards

True. The wife recently was due an upgrade. We picked the S3 over the S4 because the older model was 95% of the phone for 50% of the price. My prediction is that exactly the same thing will happen to the next generation of consoles.

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Re: So many Anonymous Cowards

"We're definitely in an incremental increase phase for mobile phones at the moment." Agreed, I made the same comment in another discussion a week or two ago. I really can't see where the next major development in phones is coming from. I like what Nokia are doing with their cameras and Sony with waterproofing, but nothing else recently has got my interest genes twitching.

It seems that phones are very much like PCs/Laptops now, a mature form factor where the differentiators boil down to a matter of favoured OS, build quality, price and taste (colour, size, etc).

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Re: So many Anonymous Cowards

S4. Aud$ 539-569 from kogan.

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Re: So many Anonymous Cowards

The hardware war in the smartphone market is not really a concern any more (especially in the Android landscape as it took a while for to catchup). It's down to software choice and user experience that determines purchases on the mid to high range phones.

If Google are sticking the dagger into Samsung by making vanilla Android much better, then people will go for the cheaper options (Nexus range). As Samsung aren't a Nexus hardware maker, they're going to lose out if the S5 fails to deliver a better experience which is probably more difficult now Google have got Android vanilla in order.

For me, iOS7 wins on that regard as hardware specs are too similar for anyone to win in that field (unless it drastically improves the user experience within the software domain - i.e. Apple's TouchID).

Camera pixels, screen resolutions, CPU/Memory, storage are reaching slow improvements.

The Blackberry 10 OS is pants and full of bugs having used the Z10 for 6 months from launch. Apps became too important to me when they were slow to appear and major devs were lazy to implement native apps. Windows Phone... I'd probably like if it was a smaller screen estate rather than the 4.5" phones it's hosted on.

Best thing to do is for Samsung to rip up Android and do it themselves by taking themselves out of the OHA. Do the brave thing and stand out by reworking Android themselves by forking it.

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Re: So many Anonymous Cowards

Yeah I got an S4 recently, switched from an iPhone 4S. I really like it, but it doesn't seem much different to my friend's S3. He certainly sees no difference and no reason to upgrade. Most of the new features (e.g. eye scrolling) only work in Samsung's own apps and are patchy at best. I think this is now a trend in the smartphone market as it has been in the PC and laptop market. Incremental upgrades aren't going to spur the kind of sales growth we've seen to date...

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'get your kit out for the lads' ain't cool anymore

Apparently cheap to make low resolution screens and smaller chips inside are now in.

Price stays the same. Its cool to donate and we don't need mega tech from our spend money.

Fancy that?

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Anonymous Coward

Sammy are following Apple and Wintels model..

Pumping the same looking devices year after year, only difference been some are slightly smaller whilst some are exceptionally larger.. but they all look the sames and they are shipped with the same-substandard UI...

I love the spec of Sammy devices, but for the love of good, please give them some variety!

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The S4 is utter junk

So I remember the fanfare during the launch then they actually launch the product but only release 16GB versions of and 32GB versions in APAC, a very odd decision.

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Unhappy

Advert

Dear Register: I don't run any ad blockers 'cos I realise what your revenue stream is.

That's my side of the deal: your side: NO embedded streaming adverts.

If it happens again, the blocker will be activated.

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Samsung Galaxy S5

The reason they are having a crisis meeting is because they need to figure out how they can implement a finger print sensor on the Galaxy S5 when it has a rectangular button... And I own an S4

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Anonymous Coward

Im also sure a lot of the reason why people didn't get the S4 was down to a good majority of android fans i know had mostly upgraded to the S3 and are still on a 2 year contract as a result they couldn't reasonably get a S4 unless they paid though the teeth.

Personally im very interested to see with google do with moto, give me a phone with decent specs, sd card slot and a removable / upgradeable battery around the same time as the S5 ships and you might get my attention.

I dont have any major gripes with my S3, just samsungs failed promises of future updates that never came or came and then got yanked.

HTC lost the plot and appearer to have focused on making ishiney style phones, so im open to suggestions, i dont hate samsung enough yet to leave out of principle, but i could be tempted for the right device.

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Pulled upgrades...

... are great. I upgraded my S3 to Android 4.3 three weeks ago, since when it's been near useless - laggy and crashy when waking (it, not me), 10hr battery life (it was near 30hrs on ave), can't play music without glitches. No response from Samsung other than "bear with us".

As a result, I won't be buying an S4. Or an S5, come to that. Gits.

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bep

Re: Pulled upgrades...

I agree that the long-term Android experience can be rather poor. That doesn't encourage anyone to buy a new Android handset from the same manufacturer, regardless of the specs. That's why it's important for the manufacturers to make sure their upgrades on current handsets are bullet-proof. Most punters aren't interested in custom ROMs.

Samsung also have a fairly bewildering range of handsets at different price points. Some of the bigger phones are a lot cheaper that the S4. So I think they may be canabalising their own sales. Meanwhile Sony have a much simpler product line, although I don't think they are doing so great at the moment either.

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The Nexus 5 is a really nice phone

Samsung may be feeling a little pressure from the vast array of non-TouchWiz, non-shovelware phones in the market right now. They give an amazing experience. Since smart phones have come to be the vast bulk of revenue and profits they are disproportionately sensitive to any friction in this area. Their response will probably be to improve the experience.

Remember, to the Samsung development team the Nexus 5 is not their competitor. The Nexus 5 2015 is. It takes that long to go from design to shelf and if they don't aim for where the puck is going to be they will fail.

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Anonymous Coward

Crisis as they realise that they have to make the phone bigger as the faster they make it the bigger battery it needs (whereas Apple went and made it faster and more efficient). The problem is the next phone will actually be a tablet and soon after it will need to be the size of a desk and that brings issues with portability.

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As a Samsung Galaxy S3 owner...

I'm indifferent about the S4.

I was going to upgrade to it, but then Sony launched the Z1.

That doesn't mean that the S4 is bad. Only it and the Z1 are even in the running, as I want a microSD card slot on my phone. Waterproofing just nudged it into the lead.

But most of all, I just fancied a change. My last phone was HTC, my current one is Samsung, my next looks like it'll be a Sony. After that, who knows? If LG or Motorola launches a phone that meets my requirements, I'd happily look at those too.

Why would I have brand loyalty to manufacturers when I'm on Android? Whoever makes the best phone for my needs will get my money. I happen to need different things to many other people, so I have a more limited choice.

I suspect Samsung are confused right now. In brand terms, they want to be more like Apple. In market terms, they're not and never will be.

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Re: but then Sony launched the Z1

As far as I'm concerned, Sony can put the very best, most flexible and wonderful piece of computing equipment on sale, I won't buy because it's Sony and there will be broken, draconian DRM and unacceptable limitations embedded in it.

But that's just me, surely.

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Re: but then Sony launched the Z1

Not quite just you. After the music CD rootkit debacle, I also swore off Sony.

However, I can't swear off a company forever if they seem to have improved. And Sony have somewhat improved. They're still not perfect - their motion picture side is as nutty as the rest of the industry - but they seem to have given their consumer electronics side a *little* more autonomy, and are less and less in the "everything in a Sony stack" mode. (Memory Stick? No thanks!)

I did some basic research on the Z1, checking for issues with DRM etc - nothing came up.

I think that's one area that Android has had some success in which people overlook - the Android platform is so much richer than a desktop platform in the APIs it provides, and pretty much stops some forms of lock in.

So for example you could go off and write your own music library code, but there's not much of a point - other apps want access to the music library as well. If you go your own way, then you're just going to have people complain that their exercise app or game can't see playlists.

So I do feel a little protected against Classic Sony Dickery by Android...

And Sony seem to be leading the pack in build quality and specs at the moment, which is why they're in the lead. That having been said, I'm sure I saw something about a new HTC One model with an SD card slot. That could complicate matters! ;-)

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