Samsung (NASDAQOTH:SSNLF)has seen better days.
Stung by a series of recent shortcomings, the South Korean technology titan limped into 2015 with visions of reestablishing itself, alongside nemesis, Apple (NASDAQ:AAPL), as one of the undisputed leaders in the smartphone space.
Samsung has issued invitations for a March 1st event at the Mobile World Congress in which many observers believe the company will unveil the latest generation of its high-end Galaxy smartphones. However, as we learn more about this strategy, I am becoming increasingly skeptical of the potential for a 2015 comeback.
Jack of all trades, master of none
Years ago, Samsung quickly established its Galaxy smartphones as the premium Android alternative to the Apple iPhone. Samsung moved quickly to consolidate this emerging opportunity by releasing a flurry of mid-tier and low-end smartphones as well, quickly becoming the most dominant smartphone OEM by unit volume worldwide.
However, Apple recently shifted to larger-screened iPhones, and the emergence of high-quality, low-cost competitors from companies such as Xiaomi have siphoned away Samsung's smartphone market share. Reeling from fighting this two-front war of attrition and suffering from a bloated product lineup, the company has seen its year-over-year net income fall in each of the four most recent quarters. Heading into 2015, Samsung vowed to fight back, and its strategy for achieving that comeback has finally made itself clear.
A curveball for the competition
The Internet has been flooded with purportedly leaked images of the hardware innards for the Samsung Galaxy S6. As my colleague Ashraf Eassa recently noticed, the main Samsung Galaxy S6 will probably bear a strong resemblance to the Apple iPhone 6. However, it also appears Samsung intends to add a second flagship device to the new Galaxy lineup, one that could truly set the company apart from Apple and the rest of its smartphone competition. According to a number of sources, Samsung plans to release a curve-screened version of the Galaxy S6, the Galaxy S6 Edge.
There are a few important factors to note here. For starters, this is not a new strategy for Samsung -- the company is simply folding the branding for its high-end smartphones under a single umbrella, similar to the way Apple folded its 5s and 5c devices under the iPhone moniker in 2013. Samsung intends to leverage its "wraparound" screen technology as a means of differentiating itself from the hordes of copycat Android OEMs that attacked its market share over the past several years.
The trouble with the curve
While I certainly understand that leveraging its expertise in manufacturing curved displays helps Samsung set itself apart from the crowd, I remain skeptical this will be the silver bullet that management needs.
As I see it, the problems are device-specific, but they both come down to hardware design. I completely agree with my colleague Ashraf that if the standard Galaxy S6 simply amounts to the Android equivalent of the Apple iPhone 6, then Samsung has fallen into a "follow-the-leader" mindset, which certainly has ominous implications for the future course of Samsung's product portfolio.
In the case of the Galaxy S6 Edge, different does not necessarily mean better. Sure, having the on-screen graphics bleed onto the sides of the device looks great. However, Samsung will need to convince developers to build products to leverage this new functionality in order for the technology to actually deliver on its potential.
In both cases, I'm getting the same feeling I had when I saw Samsung unveil the Galaxy S4 in New York two years ago. Although it was clearly a leading high-end Android smartphone, the main points of distinction lay in similarly gimmicky features such as eye-scrolling. Samsung has relied on these one-off features to set itself apart from the competition in recent years. I just do not see these as sufficiently compelling reasons that will allow Samsung to maintain its smartphone leadership position.
Don't get me wrong, I see what Samsung is going for here. I am just not convinced it will produce the results the company and its investors so badly want. Even with the Samsung Galaxy event several weeks off, I am betting that Apple's grip on the smartphone market remains as safe as ever.
Andrew Tonner firmly believes that an Apple a day keeps the doctor away. Andrew also owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.