[Samsung] will move up the autumn launch of its oversize smartphone lineup by several weeks to mid-August, according to a person familiar with the matter.
The South Korean company’s move is part of a bid to give its Galaxy Note smartphone-tablet hybrids some breathing room before mid-September, when Apple Inc. typically unveils its refreshed iPhone—a product whose popularity has the potential to monopolize media and consumer attention for weeks.
[Last year] Not only did the iPhone 6 Plus’s 5.5-inch screen rival the Galaxy Note 4’s 5.7-inch screen, the new iPhones were unveiled six days after the Galaxy Note 4 was introduced on September 3. The Galaxy Note 4 went on sale just weeks after the new iPhones.
Despite my earlier post about Samsung’s product management, the company has taken several effective actions over the past several years, and this move is a related adjustment.
What prior actions am I referring to?
- It was the first Android OEM to develop a global flagship smartphone, the Galaxy S, in 2010. It took other Android vendors years, in some cases, to realize they couldn’t have their A team work on 40 – 80 different products per year. And that they couldn’t fragment their sales team time and media spend, either.1
- It took inspiration [a euphemism] from the iPhone to a much higher degree than other Android OEMs. It’s not a move I respect but, in retrospect, it was very effective. Court fines were a fraction of what market losses could have been.
- It ramped up its media spend. Good products deserve good marketing (or at least an attempt). It took other OEMs time to realize that if you concentrate your product risk into one product, you need to back that product with media. HTC learned that the hard way.
- Samsung created the phablet. Great move. I don’t know if it was anticipatory or an experiment, but it really doesn’t matter.
- Finally, with both a mainstream flagship (Galaxy S) and a phablet flagship (Galaxy Note), it decided to book-end the iPhone’s annual launch. Each year, it introduced the Galaxy S in the spring and the Galaxy Note in the fall. Its intent was to capture new smartphone users and iPhone-defectors (few) prior to the iPhone’s launch, and then to offer something different (larger display) after the launch, with the Note. In a nutshell, it was a “pre-empt and out-size” tempo.
These actions worked. Samsung was the only smartphone maker to earn a profit, other than Apple. For many quarters, Apple would earn approximately 60% of the profits in the handset industry, and Samsung would earn approximately 40%. (Other companies’ profits were minimal, or negative.)
But then something changed. Apple finally introduced a larger-display smartphone, the iPhone 6 plus. Now, the “out-size” aspect of the tempo no longer makes sense. And Apple’s share of profits has climbed to 92%. So Samsung is focusing on the “pre-empt” aspect, by moving up the launch of the Galaxy Note line.
Will it make a meaningful difference? Perhaps, in a small way. I’m sure Samsung’s done the math; looked at when consumers in the US and other markets are most likely to upgrade their handsets. The August timing might align with that. And, as the smartphone market saturates, many of the late adopters aren’t loyal to particular brand, including Apple. So, an earlier Note launch might attract some of these consumers. But, fundamentally, this is a tactic; it doesn’t change the drivers of Apple’s or Samsung’s fortunes. Apple has excellent hardware and software, and an excellent ecosystem. Samsung just has really good hardware. That’s why Apple is number one in profit, and Samsung is number two. This move won’t change the overall situation.
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1 Samsung, itself, continued launching dozens of product per year, but it had a resource advantage that other OEMs did not.
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Update: I updated the last paragraph of this post to include Apple’s ecosystem, and made several other minor changes. I also added the statement and link about Apple taking 92% of the smartphone industry’s profits.
