Samsung Thrives in Galaxy
Coming out with a strongly branded Galaxy S line of devices with multiple U.S. carriers, the handset manufacturer changes the game.
A year ago at CTIA Wireless, Samsung unveiled Galaxy S, which hit the market in June 2010. Over the next seven months, the company worldwide managed to sell some 10 million of the Androidpowered Galaxy S smartphones.
But perhaps more stunning than the line’s brilliant Super AMOLED screen was the way in which Samsung sold the Galaxy S in the United States. Delivering a similar product to all four of the top nationwide carriers was a remarkable feat considering the U.S. industry has been dominated by operators that want handsets exclusive to their networks. In such a scenario, smaller operators typically are left out in the cold when it comes to the latest and greatest handsets.
Not so with Galaxy S. Samsung made the Galaxy S portfolio available not only to AT&T, Sprint, T-Mobile USA and Verizon Wireless, but also to the regional carriers as well, like U.S. Cellular and Cellular South. Each Galaxy S includes the fourinch Super AMOLED display screen, 1GHz Hummingbird application processor and various entertainment, messaging and social networking apps and features. It’s not just another Android – it’s Samsung’s version, including all the bells and whistles of its Social Hub, library of content and “smart life” strategy.
The Galaxy S and Galaxy Tab premium product families set a new standard in the U.S. mobile industry, with best-in-class hardware optimized for peak performance on the Android OS, along with high-profile features and content that truly changed the way consumers stay connected, entertained and interactive with others, says Dale Sohn, president for Samsung Telecommunications America.
The Samsung Telecommunications America (STA) team, based in Richardson, Texas, knew they had a great product, or “piece of glass,” as head of Strategy Thomas Chun puts it, and they wanted to make it stand out. They were determined to own it and do a great job in presenting it, and that’s what they did.
Throughout the past year, Samsung achieved a number of other notables. The first big handset brand to bring an Androidbased tablet to market, Samsung also made the Galaxy Tab available for sale through multiple carriers. It teamed with Google to build the Nexus S, featuring Android 2.3/Gingerbread and near-field communications (NFC). It’s also supplying some products in the first batch of Android-based devices for Verizon Wireless’ LTE network, including a smartphone, an LTE-enabled Galaxy Tab and mobile hot spot.
But it’s not just a friend to the giant brands. In September, the company, along with carrier partner MetroPCS Communications, announced the commercial launch of the first LTE-enabled, multi-mode CDMA handset, the Samsung Craft. Samsung Mobile also is supplying LTE networking equipment to Cellular South and designing two LTE-enabled smartphones for that carrier’s 700 MHz footprint for launch this year.
Neil Shah, wireless device analyst at Strategy Analytics, says Samsung has been leading in North America for the last couple of years in terms of handset shipments. But it needed to do something in 2010 as Motorola was pushing hard on the Droid strategy at Verizon.
By launching the same family of Galaxy phones across different carriers, Samsung got it right in 2010, he says. Providing the same family of devices to carriers large and small, Samsung benefits by distribution and scale and mitigates the risk of being too closely tied with just one or two carriers. From a scale position, Samsung is better positioned compared with Motorola, he says, and technology-wise, Samsung has more R&D to give it an edge in bringing new handsets and number of models to market faster.
There was a time when Samsung was viewed as a fast market follower, with quick turnaround times on new designs and execution – but that was usually after a competitor launched something in the “wow” category. If you compared devices from, say, Motorola and Samsung, the Samsung model typically would have more memory and a slightly better camera, notes analyst Charles Golvin of Forrester Research. More recently, he adds, it’s shifted to the leading edge of design, i.e., leading rather than following.
“I think they did a really good job of taking that fundamental industrial design and being able to tweak a little so each carrier customer was still able to bring a unique product to the market,” he says. It’s not the same as the iPhone, where two major U.S. carriers are selling essentially the same product.
Analysts point out that rival HTC has effectively supplied products to various carriers as well, but its branding has not been quite as visible. For Samsung to be able to supply at the high end while still delivering feature phones and quick messaging devices is a testament to its efficiency and scale, Golvin says.
Of course, there’s no slowing down for the competition, either. A quarter or so ago, LG might have been considered more of a low-end handset player, but it has upped the ante with 3D display and 4G devices. Shah says he considers it a respectable threat for Samsung, alongside competitors such as Apple and HTC.
There’s no denying that Samsung saw a spectacular year in North America, an increasingly important market for all handset players. In reporting its fourth-quarter and full-year 2010 results, South Korean parent company Samsung Electronics Co. forecast high single-digit sales growth for 2011 overall, driven by the expanding smartphone and tablet segments. The company is targeting smartphone sales of 60 million units for the year, double that of 2010.
In February of this year, Samsung was named the winner in cell phone customer loyalty for the 10th year in a row based on the 2011 Brand Keys Customer Loyalty Engagement Index, one of only eight brands in any category to retain the lead in customer loyalty for a decade. The national survey identifies brands that are best able to engage consumers by meeting or exceeding expectations. In the cell phone category, consumer preferences were based on wireless phone design and performance.
How do you top a year like that? At Mobile World Congress in February, Samsung announced the Galaxy S II, which uses Android 2.3 Gingerbread, the latest version of the fast-growing operating system. It also will be offering the Galaxy Tab 10.1, a Honeycomb tablet coming with a 10.1-inch display, a little bigger than the first Tab. For the North American team, Chun says, the plan is to continue to do what they’re doing, execute well and provide compelling products. Says Sohn: “We are excited for what’s in store from Samsung in 2011 as we prepare to take the success of the Galaxy S and Tab portfolios to the next level.”
If the past year is any indication, 2011 should be out of this world.