A NY Times report appearing in print this morning by Eric Pfanner and Brain Chen states that the Chairman of Samsung Electronics, Mr. Lee Kun-hee "is worried about what might be called the fast-follower problem." This is a problem that we noted months ago in our report titled "Samsung Revealing a Sense of Crisis." And it's still haunts them until today and rightfully so.
The NY Times report notes that "Ms. Lee is one of the important actors in the plot to change Samsung's reputation. A stylish former executive at the cosmetics company L'Oreal, she wears colorful eyeglasses and a bobbed haircut. Her English is sharp. She speaks in animated fashion about the future of mobile technology and Samsung's role in that future — sometimes to the point that her public relations aides remind her to be more discreet.
'We will make all the celebrities and important people wear it,' she added, tongue slightly in cheek. 'If you don't wear it, you will be obsolete.'"
The 'Times further noted that "before Samsung assumes that role, though, the company must shake its lingering reputation as a fast follower.
Samsung executives bristle at the notion that its products are imitations. Yet many of them acknowledge that their company followed Apple into smartphones.
Yet legal decisions have underscored that reputation. Apple has successfully argued in one major case in California that Samsung infringed on a series of its patents, and now Samsung must pay Apple $930 million in damages. Both companies are set to go to trial in California again in March, for a case in which Apple accuses Samsung of infringing on a separate set of patents on newer Samsung devices. And it didn't help much either to lose their infringement case against Apple last week on their home turf with a case that Apple stated contained "ridiculous claims."
Samsung is also finding that setting trends like Apple isn't so easy. The report further stated that Samsung "put its full resources behind the watch, making a major marketing push with slick TV ads showing smartwatch-like devices used in movies and television shows by characters like James Bond. But the ads received a far better reception than the device itself. Technology reviewers largely panned it, criticizing its design and software features, and questioned why it existed at all."
Last month we posted a report titled "Samsung's Galaxy Gear Sales Now Prove it's an Epic Flop." Although Samsung tried to counter a damaging claim found in the report the very next day, a keen Korean newspaper scoffed at Samsung's twist of the facts by confirming that regardless of Samsung "shipping 800,000" units, they only "sold 50,000. This very point is echoed once again in the Times report as well.
Ross Rubin, a consumer technology analyst for Reticle Research told the Times that Samsung is "certainly impressive from a technology perspective, and they may even be leading edge, but very often they just seem to be flashy-gimmicky, or technology for technology's sake." This is exactly what Jony Ive, Apple's famed Industrial Designer, stated in their initial iPhone 5 promotional video noted below: "It's the remarkable technology inside the iPhone 5S that sets a new precedent. It's not just rampant technology for technology sake"
Those struggles — along with the intensifying smartphone competition — have disappointed Samsung investors, states the NY Times.
Although we reported on Thursday that "Apple's iPhone 5s is the world's bestselling Smartphone, Again," Samsung gets credited for being a "Volume leader" in the market. Along with that title, the company is suddenly finding the onus is on them to create the next trend.
Chang Sea-jin, author of 'Sony vs. Samsung: The Inside Story of the Electronics Giants' Battle for Global Supremacy," told the New York Times that "If you are on the peak and looking where to go next — this is something new for them. In the past, they didn't need a strategy because they always had somebody to look up to."
Smartphones have been the major driver of Samsung's growth in recent years, and it doesn't take the instincts of Mr. Lee to grasp the fleeting nature of mobile phone leaders. The brands that plunged after reaching the summit are etched in the minds of everyone at the company: Motorola, Ericsson, HTC, Nokia and BlackBerry, reports the Times.
The Times reports that "Mr. Lee is pushing the company to think more boldly. Developing new products is no longer enough; Samsung wants to create devices that define whole new categories." This is something that we noted in our Patent Bolt report this morning concerning flexible and multi-fold display based products. The company's push into this area is moving along very quickly and that Samsung is pushing their engineering teams to have a multi-fold based smartphone out by 2015.
The Times further noted that Samsung wants to develop the software that makes their mobile devices work, because up until today "the vast majority of Samsung's phones run on Android, Google's operating system. That has been great for Samsung so far, but the downside is that the company has become more and more reliant on Google's software. As Samsung rode to the top of the mobile phone industry strapped to Android, the company sacrificed a degree of control over its mobile destiny.
The Times also noted that "The combination of seamless hardware and software has been a crucial part of Apple's success. Once a user is dialed into Apple's system, it is hard to leave it for something else. Switching to an Android phone from an iPhone results in losing access to Apple's exclusive software, like its free text-messaging service, iMessage, or the plethora of third-party apps made only for iPhones.
This gives Apple the advantage of what some analysts call "lock-in" — an advantage that Samsung doesn't enjoy with Android, because Samsung users can always switch to another Android phone, like one made by Motorola, and get many of the same features."
"Last year, Samsung began to work with an industry project called Tizen," states the NY Times. Patently Apple began covering this development as far backs as February of this year. We also noted last month that Samsung's smartphone code named TRATS2 running the Tizen OS had passed its first certification stage in Korea. Samsung is hoping to release Tizen OS sometime in the first half of 2014 beginning with a smartphone.
A former Samsung executive who insisted on anonymity to protect business relationships told the NY Times that "I don't think they can be a dominant smartphone operating system in the near term. But it's an important step for Samsung to take at the moment. If they want a new success story, they will have to focus on the software side of things."
Mocking Apple Backfired
On that note, Samsung began to develop their own software to provide the Galaxy S4 with more of a unique experience and decided to mock Apple with one of its key new features about "tap to share" photos. In a Samsung ad called the "Grad Pool Party," which aired in May, Samsung was out to mock Apple's iPhone with a so-called "advanced software feature."
Specifically during the 32 and 40 second marks of the ad, a grad takes a photo of two parents attending the party. The grad wants to share the photo with a fellow grad and so they tap their Samsung Galaxy S4 phones together as noted in the photo below. At the 47 second mark of the video of that segment continued. The older parent asks the grad "So some smartphones are smarter than other smartphones?" The Grad says, "Exactly." The parent with the iPhone then looks to his wife and says, "What are we doing with these phones?" – Of course insinuating that the not-so-smartphone was the iPhone.
The mockery was a good jab at Apple, but Craig Federighi, Apple's Senior VP of Software Engineering had a jab of his own prepared for Samsung during their World Wide Developer Conference (WWDC) held just a month after the ad first ran; a powerful jab that would turn the tables on Samsung.
Federighi: "Airdrop is absolutely the easiest way to share with the people right around you. So now when you're in any app that supports a share sheet, you bring up the share sheet and your friends all around you just show up right there. You tap on one and they're going to get a panel right on their display and can accept what it is you shared (see "1 Photo Selected" in graphic). If they accept it they're taken right into the app.
Federighi added that "If you want to share with multiple people, you just tap, tap, tap (tapping on the photos of your friends in iOS 7 using AirDrop). Then with Federighi smirking he stated that there's "No need to wander around the room bumping your phone with others (to great laughter)." Yes, Federighi openly mocked Samsung's Galaxy S4 feature with sheer delight. The Samsung ad never ran again.
Samsung's so-called cool software feature mocking Apple's alleged feeble iPhone backfired on Samsung big time. And the WWDC crowd let out a roar of laughter. Yes, Samsung trying to laugh at Apple over software was funny indeed and so it's back to the drawing board for Samsung, again.
We began our report by quoting the NY Times report which stated that Mr. Lee Kun-hee was worried about what might be called the fast-follower problem. Well, Mr. Kun-hee, don't worry about being branded a fast follower because what you really are is a copycat; a word that you still can't get yourself to verbalize yet. But that's okay, we knew what you meant.
At the end of the day, in order for Samsung to shake off that negative branding of being called a copycat, they'll have to delivery a lot more than simple childish gimmickry that they're marketing team is still trying to pass off as true innovation. Will we see original ideas from Samsung in 2014? Only time will tell. Just don't hold your breath too long.