2015 hasn’t been the kindest year to Samsung’s mobile division. Despite two new flagship products – the Galaxy S6 and the S6 Edge – the South Korean tech giant simply couldn’t escape the long shadow of Apple’s iPhone which continues to swallow up 94% of all smartphone profits.
But more than that, profits from Samsung’s mobile division have been far from impressive. During the first quarter of 2015, for example, profits from Samsung’s mobile division fell by an astounding 39% year over year.
Seeking to shed some light on what currently ails the company, Reuters recently spoke to a number of former executives who spoke openly about the more limiting factors of Samsung’s corporate culture.
The problem, in short, rests on the fact that Samsung has no idea what it’s doing with software.
This culture, they say, has stymied many previous efforts to develop software and service platforms to support the smartphone business. In the past year several such services have closed down, at least one of them within a year of being launched.
“There’s a lot of distrust of top executives who can actually implement stuff that is more of a software and services offering,” said one person familiar with the company’s inner workings. “It’s still ‘we know how to sell boxes, we sell boxes’.”
This strategy may have worked well in the past, back when most phone reviews solely focused on specs like speed, performance, and camera quality. Thee mobile landscape in 2015, however, is markedly different. Today, a smartphone is not just measured by hardware, but by the elegance of its software and the utility of its services. It’s hardly a coincidence that Apple is currently preoccupied with fleshing out its selection of software features and services, from iCloud and Apple Music all the way down to 3D Touch.
Samsung may do hardware well, but the company’s lack of sophistication with respect to software, coupled with dysfunctional in-fighting, are seemingly working in unison to hold the company back.
Compounding matters is that Samsung’s ambivalence towards software reportedly emanates from the top of the company downward. As a result, former employees who spoke to Reuters articulated that Samsung, in some regards, tends to treat software “as little more than a marketing tool.”
Indeed, if one runs down some of the more curious software features Samsung has rolled out over the past few years, it’s hard to disagree.