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Analyst thinks Samsung may exit smartphone business in 5 years

This year has brought some good news for Samsung as the company saw its profits rise after seven quarters. However, an analyst thinks that the South Korean smartphone giant may exit the smartphone business in the next five years. According to Ben Bajarin, an industry analyst, Samsung is grappling with “The Innovators Dilemma“, and he wouldn’t be surprised if the company left the smartphone market in the next few years.

The analyst claims “When you ship the same operating system as your competition you are only as good as their lowest price.” An Innovators Dilemma refers to a situation where early innovators are challenged by new competitors who offer good enough products at a much affordable price. When the market starts accepting good enough products, early innovators fail to justify the premium price tag of their products.

There is absolutely nothing they can do to fix the downturn in their premium handsets. No amount of innovation will save them because the “good enough” mindset has settled into Android land,” writes Bajarin. Another point he makes is that low-cost good enough smartphones were supposed to hit Apple, but it hit back Samsung as it used Android, which is used by other low-cost smartphone manufacturers, on its devices.

Android’s new premium price point is between $300-$400 and the new mainstream Android smartphone price point is under $300. No other Android OEM, Samsung included, will sell in volume anything above those prices. At those prices, cutting edge innovation will be void, meaning the gap between iPhones and Android will grow,” he further writes.

This analysis, or we could rather say, prediction would seem quite outrageous right now, but we’ve seen that happen with Nokia. Some popular brands like BlackBerry and Sony are failing to revive their smartphone business right now. However, we know Samsung has a lot of other business, and it doesn’t depend on the smartphone business to survive. It is a force to reckon with in the display panel and semiconductor markets.

We would like to know what the community thinks about this prediction. Is the company’s failure in the smartphone business inevitable? What do you think? Do you think Samsung could be nearly as profitable as Apple in the smartphone business with the future Galaxy S devices? Let us know your thoughts in the comments section below.

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Rdmkr
Rdmkr

Don’t know if this is sacrilege to say on a samsung forum, but I won’t shed any tears if this really does happen. 5 years is a long time for tech to develop. Even those mid range priced flagships will be lightning fast by today’s standards. What’s the point of having UI framerates above 60 fps, or cpu power beyond where network ping times are the bottleneck. I don’t think there will much of a noticeable gap in performance between premium and sub-premium by that time – just perfect vs perfect. I don’t doubt Apple will continue to fleece its… Read more »

Abhimanyu911
Abhimanyu911

It may not exit in 5 years but it might see slow down in number of sales especially low-range and mid-range devices.I used to have Samsung Galaxy Ace (GT-5830) that was really awesome phone of that time after 4 years I had got Samsung Galaxy A7 by having blind faith but some times I regret when it comes to only software department otherwise it is really a good mobile phone.It had recently got Lollipop 5.0.2 which is quite outdated whereas On and J series are enjoying v5.1. Sony maybe not good in terms selling number of phones one thing I… Read more »

lvdubn
lvdubn

In related news Ben Bajarin predicts that Microsoft will pull out of the software business within the next few years.

frankypiama
frankypiama

This guy is taking things overboard. Samsung brand is way to strong to let it go and Samsung Mobile plays a big role in that. Sammy has story about laggy devices and whatnot. Even as recently as the Galaxy S5, but since then it has definitely upped it’s game. It’s hardware has always been top notch and now the software, from the S6 (if note the Note 4), has seen a mayor leap forward. Have you tried the stock browser on the s6? OMG I was so used to chrome and it took me 5minutes to change it. It’s so… Read more »

Abhimanyu911
Abhimanyu911

Dude A series is not doing so well in terms of software.I’m A7 user I had just recently got 5.0.2 whereas J and On series are running on 5.1.1(Except A8) and it doesn’t even have themes store this is really disappointing.

cmackay
cmackay

Five years is a long time in the tech industry and even longer in the mobile phone market. Who knows what or where any of the players will be that far out. I believe Android premium handsets will continue to fall in price (as in most technology) and, eventually, competition will have to put pressure on Apple to de-value their premium handsets. Apple is SO cashed up they would win a price-war any day of the week but what will (and has) hurt Apple’s pride is people buying cheaper and better from their competition. I lead a decent sized organisations… Read more »

vbx
vbx

LOL, isn’t the iPhone made with 50% Samsung parts. Including the so called “best screen ever”.

0x45455844
0x45455844

Samsung’s version of Android is shamefully stupid. I’d be glad for them to jump off competition and provide good technologies instead.

MStuart
MStuart

Nothing wrong with Samsung’s software. It’s superior to stock in many ways (camera, KNOX, multiwindow, customizable toggles, themes…)

Samsung needs to send updates faster and for longer though.

ghedelacruz610
ghedelacruz610

this is just a stupid analysis by an ifan boy. Why would samsung quit their smartphone business if they are miles ahead of the competition? unlike apple, samsung innovates and not imitate. they will definitely continue to go toe-to-toe with apple’s iphones and they are currently producing excellent mid-range or low-budget phones.

this is obviously just a marketing scheme of ifan boy to discourage samsung fans. try harder ifan boy lol.

Hayder989
Hayder989

Who is this Ben guy? He doesn’t realise that Samsung is leading in every way. Every company is relaying on Samsung. They have the best storage chips, best processors and displays, they are just building the trust again and that comes with a cost. Next year it will be all about Samsung, mark my words. Make me an analyst if you want. Don’t post any rubbish around here, no one wants to read about someone’s opinion over here, please support Samsung by your trust.

bobsummerwill
bobsummerwill

Actually, having read the original article, I think he might have a point.

Mobile is becoming very mature and might be as boring as commodity PCs are now, in which case an exit for Samsung could make sense.

deardevil
deardevil

yes yes and apple will exit next year…. duhhh just kill this guy ,that doesnt have any clue what hes talking about. is more probable that sony or HTC end the smartphone line then samsung… what a stupid fellow.

Nine54
Nine54

Interesting thought, but it rests on the premise that there won’t be much future demand for Android-based flagships. There will continue to be demand for flagship alternatives to Apple/iOS. And people will continue to demand improvements in things like camera/photo quality, etc. They aren’t suddenly just accepting lower camera quality as “good enough.” Instead, what’s happening is that the Chinese vendors are closing the quality gap with Samsung’s flagships while maintaining a significant pricing/value advantage. If the overall price of non-Apple “flagships” drops because OEMs are able to provide 90% of the value at 50% of the price, then that’s… Read more »

pars1992
pars1992

because of Chinese smartphones that have : good quality , low price , all range of needs that support , good support , more features , nice look & …
but Samsung can change policies and be like them to continue success

Tondern
Tondern

A lot of people and analysts love to use Nokia as prime example of once a giant to really do everything wrong and basically get forced out of the smartphone market. I still think Stephen Elop did what he could to serve Nokia on a silver platter to M$ so I always disregard these examples. I was really having a serious doubt whether to buy a Samsung phone this time around or settle for a good enough phone for half the price. The removable battery is gone and their firmware updates have been lackluster in 2015. So I went phone… Read more »

abodelexus
abodelexus

this isn’t right, samsung will never quit smartphone business, they are leading the android smartphones, if samsung quits it means that other android manufacturers will quit even before it, this won’t happen, even when they sold the S5 and it was a complete failure they started from scratch with the S6 and it’s a great device, in fact it’s the best device this year with it’s big brother the NOTE 5, so i don’t know what you’r talking about…you either an ignorant or an isheep…

MStuart
MStuart

I disagree with the conclusion, but I agree with the reasoning for the most part. Samsung makes outstanding products, way above their Android competitors, but they have neglected their customers leaving them in the dust too many times and have failed to build the brand.

If you’re not loyal to your customers, they won’t be loyal to you and they either will buy cheaper (other droids), or will only pay the extra for the brand (Apple).

xfrgtr
xfrgtr

asifs,a well known samsung hater

Martin R.
Martin R.

This is wrong what you’re saying right here… We have just reposted an article from someone else and this isn’t Asif’s own opinion.

Think before you talk please..

ThaiM
ThaiM

All Samsunk had to do was give us MircoSD storage and removable battery and they would’ve been fine. But they don’t so they continue to fail.

Martin R.
Martin R.

YEs, just ask LG with all those features, right? Seen their sales?? The most people do not care about those things…

preime101
preime101

If you gave LG the same level of marketing and exposure as Samsung they would do very well, so making that comparison is way off the mark.

ThaiM
ThaiM

Their V10 is all the rage. It has everything Samsung no longer offers to Samsung (ex)fans.

bobsummerwill
bobsummerwill

Right, because Android is the only operating system in world, isn’t it?

Hello, Tizen 🙂

return99
return99

no way :d

Lennatron
Lennatron

All I can say is that this “analyst” is retarded. Excuse my improper language but I don’t know how else to explain. Stupidest thing I read all month.

marcdeboer1975
marcdeboer1975

I understand the article and find it logical when I read it. But I think the fan factor and people like me never switch to an Apple product. I see Samsung in a higher segment with Tizen.

DTSManiaC
DTSManiaC

Personally, I’m very happy with my Galaxy Note 4 even it’s the worst flagship sammy ever created. It’s true that sammy started to make well optimized system with S6, but it’s too late. Sammy wasted too much time to produce high-end and budget-friendly devices together. Considering that sammy has most advanced hardware and software in android world, it’s nearly impossible for them to make a flagship about 300-400$ price tag. If this happens, it’ll be huge injustice for older flagship owners who paid 650+ dollars for their device. But honestly, i’m glad that the othrt brands like 1+ and xiaomi… Read more »

preime101
preime101

“When you ship the same operating system as your competition you are only as good as their lowest price” an idiotic statement by another clueless “analyst” who would struggle to predict the correct night day cycle let alone something as complex as the smart phone industry. By that logic Nike would hardly sell any shoes because there are plenty of perfectly adequate trainers out there that cost a fraction. Why buy a BMW when a Kia is good enough? Why spend £2000 on top spec TV when you can get one of the same size for £400? Why spend four… Read more »

Cris B
Cris B

Sounds more like an iFanboy wet dream.