I saw this item Anticipated Sales Decrease
Samsung, LG Increasingly Concerned
Both OEMs are reporting some lackluster sales figures.... and the overall opinion seems to be the S6 and G4 are a sales disappointment... but I see things differently.
A few years ago, the smartphone market was still in a state of rapid evolution. Hardware components were still improving rapidly, and going into that year, by the time a phone hit the market, there was a significantly better one in the pipeline already. The latest components were pricy, but they performed above and beyond the lower level bits. So buyers had a choice: purchase a top of the line flagship, or save money and purchase what amounted to piece of excrement. And buyers most often went with the former... sure they cost more, but they worked.
But the tide changed in 2013.
That was the year we saw the release of several phones that gave a combination of quality and performance the platform had not see up to that point. The Galaxy S4, HTC One M7, LG G2, Nexus 5, Galaxy Note 3, Moto X etc... That generation made a HUGE splash and two years later, we still have yet to replicate its impact. Why? Its not that the OEMs started mailing it in, I just see it as a function of the maturity of the platform. Hardware has improved, but the perceived gains now come in increasingly smaller increments. There is less incentive for buyers to replace their phones as quickly as they once were.
Another by-product of the maturity process is that the mid and low-range phones now can reap the benefits of the hardware improvements made at the high end. Those cheaper phones now can perform well on their own. Sure, they might not be able to win in a spring with the big dogs, but on their own, they provide users with more than enough performance for their needs. Someone can now pick up a smartphone for under $100 and it'll do a pretty decent job. To put that into a little bit of perspective... In late 2012, when the Samsung Galaxy S3 was released, Samsung also released the Galaxy Stellar (here in the US) for the 'budget' segment. The Stellar retailed for $469 (and it was, well, underwhelming)
And lastly, we've also seen the rapid rise of Chinese OEMs. They've been flooding the market with lower priced but decent spec'd devices and they've been quickly carving off huge chunks of the low, mid-tier and imerging markets, where buyers there aren't thrilled about (or able to) spending $600+ for a device when they can spend half as much, or less, and get a pretty good phone in return.
So back to LG and Samsung... I think the market is moving to where those high end, 'halo' phones can't be expected to carry the load and generate the bulk of their sales. As great as the S6 and G4 are (and they are), they are no longer so much better than everything else that buyers will be compelled to purchase them as much as they had previously.
Reading around, it seems as though both the OEMs, and the analysts that cover them, are still stuck in 2013.
Samsung, LG Increasingly Concerned
Both OEMs are reporting some lackluster sales figures.... and the overall opinion seems to be the S6 and G4 are a sales disappointment... but I see things differently.
A few years ago, the smartphone market was still in a state of rapid evolution. Hardware components were still improving rapidly, and going into that year, by the time a phone hit the market, there was a significantly better one in the pipeline already. The latest components were pricy, but they performed above and beyond the lower level bits. So buyers had a choice: purchase a top of the line flagship, or save money and purchase what amounted to piece of excrement. And buyers most often went with the former... sure they cost more, but they worked.
But the tide changed in 2013.
That was the year we saw the release of several phones that gave a combination of quality and performance the platform had not see up to that point. The Galaxy S4, HTC One M7, LG G2, Nexus 5, Galaxy Note 3, Moto X etc... That generation made a HUGE splash and two years later, we still have yet to replicate its impact. Why? Its not that the OEMs started mailing it in, I just see it as a function of the maturity of the platform. Hardware has improved, but the perceived gains now come in increasingly smaller increments. There is less incentive for buyers to replace their phones as quickly as they once were.
Another by-product of the maturity process is that the mid and low-range phones now can reap the benefits of the hardware improvements made at the high end. Those cheaper phones now can perform well on their own. Sure, they might not be able to win in a spring with the big dogs, but on their own, they provide users with more than enough performance for their needs. Someone can now pick up a smartphone for under $100 and it'll do a pretty decent job. To put that into a little bit of perspective... In late 2012, when the Samsung Galaxy S3 was released, Samsung also released the Galaxy Stellar (here in the US) for the 'budget' segment. The Stellar retailed for $469 (and it was, well, underwhelming)
And lastly, we've also seen the rapid rise of Chinese OEMs. They've been flooding the market with lower priced but decent spec'd devices and they've been quickly carving off huge chunks of the low, mid-tier and imerging markets, where buyers there aren't thrilled about (or able to) spending $600+ for a device when they can spend half as much, or less, and get a pretty good phone in return.
So back to LG and Samsung... I think the market is moving to where those high end, 'halo' phones can't be expected to carry the load and generate the bulk of their sales. As great as the S6 and G4 are (and they are), they are no longer so much better than everything else that buyers will be compelled to purchase them as much as they had previously.
Reading around, it seems as though both the OEMs, and the analysts that cover them, are still stuck in 2013.