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Samsung needs more than a new top mobile guy

Matt Hamblen | Nov. 25, 2014
Can a new mobile executive fix the 'unmitigated disaster' of the Galaxy S5?

Since the U.S. market is important to phone makers, including Samsung in the higher-priced segment, Samsung can be hurt by the LG G3 and other comparable models that could cost less than the Galaxy S5. (For example, Verizon Wireless now has the Galaxy S5 on a two-year contract for $200, down from $250, while the LG G3 is now $150, down from $200. )

"There are lots of credible phones out there now from LG and Motorola ... LG has been hurting Samsung in the U.S.," said Jack Gold, an analyst at J. Gold Associates. "Many customers shop on features and price, and when you go to a Verizon or AT&T store where all the phones mostly look alike, but the LG is a few bucks less, which will you buy?"

Even so, the U.S. is just one market and Samsung's biggest volume losses are in emerging markets like China and southeast Asian countries.

If Shin is moved aside as mobile chief at Samsung, he could be replaced by Boo-keun Yoon, another co-CEO who oversees Samsung's consumer electronics business and would reportedly take on the mobile role as well. That move would give Samsung a strategic direction toward combining mobile devices with home electronics products that are Internet-connected.

What Samsung needs to do

A management shift at Samsung won't automatically fix matters.

Samsung needs a big overhaul "to focus on the technologies and experiences that premium phone consumers want," Moorhead said. "They have to stop living in the past when they did have an advantage on Apple. Even their ads are living in the past."

"Samsung needs to dig deep and invent that next technology and experiences that are valuable to consumers and that Apple doesn't have," Moorhead added.

Gold said an even bolder brand-focusing adjustment should be in order for top Samsung managers. "Samsung's challenges are not so much about management as they are about what the brand stands for," Gold said. "In the past, Samsung was the brand to go with if you wanted Android instead of iPhone or BlackBerry. Now, with so many other vendors making credible, quality Android devices, Samsung becomes just another commodity maker of devices. So getting brand back may be partially solved by shuffling the deck of executives, if they can get some execs with strategic vision to right the process.

"But largely Samsung has to reinforce its brand as THE leader in Android, against the iPhone juggernaut and that may be hard to do," Gold added. "Samsung needs to be the 'halo' brand, not the commodity brand."


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