MWC 2018: Why Samsung could lose smartphone share this year again

Samsung Galaxy S9 at MWC 2018
IHS Markit analysts Gerrit Schneemann and Wayne Lam, warn that Samsung could lose smartphone share this year again.

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The success in the flagship pricing tier will be critical for Samsung in 2018. Unless Samsung changes its product strategy, Samsung’s smartphone shipments will decline by 2.6 percent in 2018 compared with overall market growth of 3.9 percent.

The main issues with Samsung’s Galaxy S9 and S9+ smartphones are the product design and lack of innovations. They are almost identical to the previous S8 and S8 Plus versions, having a similar physical size with use of the minimal-bezel ‘Infinity Display’ and no physical home button.

Samsung designers have relocated the fingerprint reader to below the camera on the rear of the handset, which makes better sense and also indicates a further wait for the inclusion of an on-screen fingerprint sensor.

Samsung engineers have fitted a single camera for the Galaxy S9 and 12MP dual camera setup for S9+.

ALSO READ: Samsung’s latest smartphones lack innovation

Both phones come with a technology that rivals the iPhone X’s Face ID, called Intelligent Scan combining iris scanning and facial recognition. Samsung engineers have upgraded the hardware in both phones. Qualcomm Snapdragon 845 or one of its own Exynos 9 Series 9810 processors will be equipped with a Cat. 18 LTE modem will power these phones.

David McQueen, research director at ABI Research, said: “For Samsung to keep competing with Apple and other rivals, it needs to keep differentiating its core features and services, closely integrating hardware, software, and services, but this is getting harder and harder to achieve in the smartphone market.”

Samsung’s rivals are already using new features such as edge-to-edge displays, biometrics, and AI.

Apple has managed to integrate a facial recognition solution into its offering without creating any sort of user learning curve. This will be a fundamental requirement for Samsung and one it must emulate and achieve with features like “Intelligent scan” if it is to stay competitive, ABI Research said.

While Samsung has caught up with its rivals with a dual-camera set-up in its Galaxy S flagship, key messages about the benefits of the set-up need to be explained and why it differs or is better than those dual camera set-ups on competing models.

Cameras are again becoming a highly competitive point of differentiation at the high end, though this time it is not about pixel count, but taking images in low light, super slo-mo capture, 4K HDR capture, OIS, wide angle lenses, quality partner brands (e.g. Zeiss, Leica) etc.

ABI Research suggests that Samsung needs to decide what it wants to do about Bixby, as it’s nowhere close to being the best voice assistant on Android, let alone the market. The company has got to improve it drastically, and quickly – or consider ditching it altogether.

IHS Markit analysts Gerrit Schneemann and Wayne Lam said Samsung is banking on its design language from 2017 to continue to match buyer preferences, while Samsung adds enough new features to justify upgrades.

Samsung is packing its main innovative push into the cameras of its latest flagship Galaxy S devices. All major handset brands bar Sony, Google, and HTC have deployed dual camera set ups broadly. These are the first Galaxy S models to feature a dual main camera design. Dual camera on its own is no longer a smartphone differentiator.

The decision to have dual camera capability on the Plus model does speak to a larger industry trend to offer premium features at premium pricing. The fact that the Galaxy S9+ price has pushed past the $900 mark signals top name OEMs’ ambition to capture more value at an increasing maturing smartphone market.

Samsung needs Galaxy S9 series to set the pace for 2018, after the company saw shipments decline by 2.2 percent year-over-year in Q4 2017, from 76m units in Q4 2016 to 74.3m units. While Apple also saw slight decline in shipment numbers, the company was able to raise its average selling price, by shipping more of its super premium devices, like iPhone 8 Plus and iPhone X.

Samsung hopes the Galaxy S9 and S9 Plus to ship in greater numbers than last year’s models. In the first full quarter of availability (Q2 2017), Galaxy S8 shipped 9.3 million units and 9.4 million units for Galaxy S8 Plus, but shipments declined to 5.4 million and 3.7 million units in next quarter, IHS Markit Smartphone Intelligence Service said.

Samsung will benefit from the timing of the competition’s market launches this year. Huawei and LG will not release their next flagship devices in the first quarter, IHS Markit said.