It’s also interesting that Samsung had a much smoother launch with the S5 than Apple did with both iOS 8 and the iPhone 6. Bendgate, bugs that destroyed the ability of some devices to connect to any sort of mobile or Wi-Fi signal. These are all problems that Apple has seen this year, while Samsung has enjoyed impressive, if under-target, sales. Could the issues of this year have an impact next year?
And while there are hard questions being asked of Samsung’s management, a recent conversation I had with Samsung’s President of the UK and Ireland Andy Griffiths told me that the S5 slowdown was inevitable to some extent, and the future for Samsung will lie in its new ideas, and R&D. Devices like the Note 4, which Gordon Kelly and I both love, along with the Note Edge are where growth lies for Samsung.I asked Andy Griffiths why he thought it was that the Note 4 had larger pre-order numbers than the S5, and he replied: “What do you do with a mature market? It’s great that you have full ubiquity, a huge market size that’s reached its peak, and you always go through this transition year by the way, any product sector I’ve worked in over many years it gets to the point where that sales trajectory ends because it [the product] is adopted and you have that transition into a replacement and upgrade market”.
So clearly it is understood within Samsung that the growth is in the Note range, rather than the Galaxy S5. Griffiths then explained it in relation to TVs, something that has had its own growth challenges recently.”To motivate people to upgrade and replace, they want something different. In TVs for example, the second flat panel TV had to be bigger, it had to be better, people really follow the upgrade path very naturally, but their first experience, they want it [the next purchase] enhanced”.
And specifically on the success of the Note 4, Griffiths said “[it] kind of answers more of those questions, whereas S5 was more ‘you know this kind of product, here’s the latest one, it’s great’ but without stating something completely new”. And he finished his response by saying of the Note 4 that it “motivates people to come back to the market”.
While I’m sure Samsung would rather not have a lot of unsold S5s, I also can’t see a situation where it won’t sell its existing stock. The S5 will likely remain popular, and perhaps the next move Samsung should make is to change the Galaxy S6 so radically, that it enthuses the market in the way the Note seems to.
