Samsung – Borrowed time

Hardware has made Samsung great but it must now repeat that success in software.

• Samsung’s great talent has always been hardware, but the company is now making attempts to change its stars.
• It is well established in the technology industry that hardware is becoming a commodity and that in the future, it is software where differentiation will be made.
• Apple, Cisco and others have shown that the most money is made when one makes a return on software by selling hardware.
• One can make better margins by selling software alone, but in the vast majority of cases one’s revenues would be much lower meaning that overall, much less profit would be generated.
• Furthermore, by creating both the hardware and the software, one can ensure that they work optimally together.
• Hardware that is designed to run a specific type of software and vice a versa produces better software performance with lower battery drain. This substantially enhances the overall user experience.
• Samsung’s success has been built on taking innovations from elsewhere and making them smaller, cooler, better and cheaper.
• In mobile devices this has also been complimented with real improvements in form factor design and ergonomics.
• Samsung is now the world no 1 in Smartphones, featurephones, televisions, DRAM and NAND which beggars the question: what is next?
• The next stage has to be related to software and looking at recent announcements, this is where a significant amount of investment is going.
• New innovation centres on the east and west coasts of US and substantial venture funds are the beginnings of Samsung’s attempts to bring software into its DNA.
• To date, Samsung has been non-committal when it comes to software opting to use every platform available in order not to miss the boat should one platform really take off.
• This has worked really well when it comes to Android but the problem is that everyone has access to Android making it almost impossible to differentiate in software.
• This is not going to be a problem for a while, as Samsung still has bendable screens up its sleeve but they won’t keep it going forever.
• Samsung’s expertise in software has improved in leaps and bounds over the last 8 years but there is still a long way to go.
• The software on its televisions leaves a huge amount to be desired, and its in-house software platform, Bada, has had nothing like the traction that was targeted.
• Samsung has time and it has money but it must become a software company if it is to avoid Nokia’s fate when the next big thing in technology suddenly leaps into prominence.