Lately, it just hasn’t been good to be Samsung. While there is no doubt that the company has been on a sort of march to dominate the world, it appears that with time they too can appear vulnerable and weak. Everything that Samsung has done to get themselves to this point of complete and utter domination appears to slowly be drifting away and the company appears to be slipping. While I really like the fact that Samsung gave Apple competition with the Galaxy S3, the truth is that the Galaxy S4 did little to improve upon the S3 beyond incremental upgrades (much like Apple, who they’ve criticized). We won’t even talk about the horrific Galaxy S4 press launch that basically perpetuated a bunch of sexist stereotypes and was so painful to watch that it made Qualcomm’s CES keynote seem smooth.
Now, their troubles in the latter part of this year have really begun to catch up with them and multiply, first with the verdict against Samsung in their trial against Apple where Apple won a $290 million verdict in addition to the already awarded $640 million from previous trials. This was a retrial of Apple’s first trial against Samsung in the United States (in San Jose District Court) which was a reduction from the original verdict of $380 million that the jurors had originally awarded Apple. The judge agreed that this amount was too high and agreed upon a retrial, but with the verdict of the infringement standing and a mere reevaluation of the sum of the fine. Now, this lawsuit only actually covered were the Captivate, Continuum, Droid Charge, Epic 4G, Exhibit 4G, Galaxy Prevail, Galaxy Tab, Gem, Indulge, Infuse 4G, Nexus S 4G, Replenish, and Transform. Apple already has a second lawsuit pending with more recent devices like the Galaxy S3 and related variants already waiting in courts.
Now, as if a major judgement like that wasn’t enough, Samsung was also scolded for having treated a customer incredibly horribly when his USB port caught fire. This isn’t the first report of a Galaxy S4 catching fire, however it is the first time that someone who had it catch on fire reported their dealings with Samsung. The user, Richard Wygand, got a letter from Samsung stating that he had to sign a non-disclosure agreement if they were going to agree to replace his device and that he could never speak of his problem if he wanted to get a replacement. They also requested that he take down his video about the phone catching fire, which would further reduce consumers’ right to know about the device’s potential flaws. This is obviously a very anti-consumer and anti-competitive move and got Samsung a ton of bad PR about their poor handling of the situation.
In addition to completely not getting their consumers, Samsung has been having problems selling and marketing the Galaxy Gear, which is supposed to be their major entry into the wearables market. Recently, Samsung reported to have shipped 800,000 Galaxy Gear smartwatches, however a very small percentage of these were actually sold to consumers and the remainder sat on shelves. Only 50,000 were actually reportedly sold in Korea, Samsung’s strongest market.
While it may be difficult to really find an accurate number, I can tell you from the majority of reviews and overall zeitgeist across the internet that there is no way that Samsung sold 800,000 and that they were doing what Activision did when they claimed 1 million copies shipped in a day to counter GTA’s 1 million sold in 3 days. It is a dirty trick, but realistically it doesn’t change the reality on the ground that the product isn’t selling. Not to mention the fact that when the Galaxy Gear launched, it was only compatible with the Galaxy Note 3 and was later updated with Galaxy S4 support, even so, it would be incredibly difficult to get the numbers that they did with just those two phones being compatible. Samsung clearly made a choice to be early to market than to be ready to market, because launching on only Samsung phones is a pretty poor idea if you actually want to sell the device. Not to mention, it discourages the open nature of the Android operating system as Samsung begins to become more and more closed.
Samsung is having such a hard time actually marketing and selling the gear to consumers at its current iteration and price that they have actually resorted to the worst kind of marketing possible. Below, we have an incredibly cringeworthy and absolutely disconnected from reality advertisement that shows a guy successfully getting a woman because of his Galaxy Gear. So painfully so.
We won’t talk about the blatant gender roles that they perpetuate here, but rather the completely ridiculous and disconnected from reality perspective that the commercial employs. The truth is that this video is so bad that Samsung actually disabled all of the mocking comments and downvotes, which at last check before they disabled them was at 26,000 downvotes and 6,000 upvotes. Samsung clearly doesn’t understand how to market this watch to consumers.
In addition to Samsung’s consumer woes, it appears that Samsung also has some enterprise woes that were recently exposed by some Israeli security researchers. The researchers from Israel’s Ben-Gurion University in the Negev (in the middle of nowhere, literally) were able to discover security flaws in Samsung’s Knox enterprise security platform which was supposed to allow Samsung devices to operate securely within enterprises. This flaw in the Galaxy S4’s Knox implementation resulted in malicious attackers to be able to monitor emails and to record data traffic from a user’s device. Samsung has not confirmed or denied the supposed vulnerability, but they said that they are looking into it. This could be a huge blow to Samsung’s push within the enterprise with features like SAFE and Knox.
Now, as if their woes with consumers and the enterprise weren’t enough there have been murmurings that Samsung has also started to hurt developers. First and foremost, Samsung is involved in the supposedly open source project called Tizen which they adopted as a Linux Foundation project with Intel after Nokia abandoned it (when they went Windows phone). While Tizen is yet another rework of the Linux operating system formerly known as Maemo and Meego, Samsung has been working with Intel to create an alternative operating system. However, it appears that Samsung is trying to push as much of their own proprietary code into the final product as much as they can, leaving a lot of features out of the truely open source version of the operating system for any other device manufacturer. They are effectively developing Tizen as their own proprietary OS as an alternative to Android in the event that they no longer want to be part of the Android ecosystem or it becomes too risky.
Samsung has always had a history of being a multi-OS company with a proprietary OS always being developed on the side. For example, at one point Samsung was an Android, Windows Phone and Bada company, which meant that their own Bada OS was used for entry-level phones and Android used for midrange and high-end. I simply don’t like where Samsung is going with the Tizen project and I’m not sure Intel is interested enough to invest more money and resources into Tizen when they’re already working on Windows and Android. An open source operating system is probably my favorite type, however, they simply haven’t gotten any traction even if they’re the best for developers AND consumers. Samsung’s Tizen phones are yet to be seen, however, it appears that their phone recently just passed through the FCC and will probably be shown at CES 2014 or MWC 2014.
They also have pissed off developers recently by not allowing developers with developer editions of the Galaxy S4 and Note 3 to update themselves to the latest developer build. This effectively makes a device that people pay more for outright essentially useless because it isn’t getting all of the updates before the carrier branded versions like a developer would expect to. Initially, I had similar problems with the HTC One Developer edition, however HTC remedied that with their later updates pushing the updates to the Developer Edition at the same time as the international version.
As if all of that wasn’t enough, Samsung also tried to cheat on benchmarks and various benchmarking companies including Futuremark and Rightware called them out on it. It was originally sparked by Brian Klug’s article on Anandtech addressing the fact that Samsung’s phones were being myseriously ‘optimized’ for benchmarks. Since then we’ve spoken to Futuremark and they’ve built-in a process to delist any devices like the Note 3 that optimize for their benchmarks. Rightware has similarly built their latest Basemark OS benchmark to fundamentally avoid these kinds of problems as well.
All in all, Samsung is full of problems and it is really crazy to think that people are still somehow buying their product. I honestly believe that all of these problems that Samsung is having are going to manifest themselves next year in their sales figures. That is, if they don’t address them directly and work to improve the company’s clearly tarnished image with consumers, enterprise, developers and the press. They’ve basically offended and alienated every group and you simply can’t succeed when you do something like that. Maybe 2014 will be a better year for Samsung, but if it is, they’ll have to work for it.