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Samsung: Unpacking its 2020 Strategy
At its Samsung: Unpacked event, the company unveiled 3 new premium devices, and in doing so pointed towards its strategy for 2020 and beyond. With the Galaxy Z Flip, an upgrade to its foldable phone line up, the S20 range - a refresh of its premium handset offering and new true wireless Galaxy Buds+, Samsung has again positioned itself for a strong year from a hardware perspective. When its partnerships with Microsoft (for cloud gaming) and Netflix (for optimised video content) is added to the mix, the event gives Samsung a good foundation for the year ahead.
Perhaps the biggest announcement at the show surrounds its true wireless headphones. With this form factor expected to experience explosive growth in the coming years, Samsung’s decision to remove the headphone jack from its S20 range will be a major boost to this category. It’s a rise that Samsung hope to be a part of with its own true wireless headphones, as it seeks to compete with Apple in yet another consumer electronics category. Samsung are already offering its Buds+ as a soft bundle for consumers who order an S20+ or S20 Ultra, and it is clear that the vendor see’s true wireless headphones as an essential part of its wider personal ecosystem of devices.
Of course, the cornerstone of Samsung’s success is its smartphones. The company has again revisited foldable phones and will hope to have solved the issues that dogged the Galaxy Fold back in 2019. The Z Flip follows a different form factor, relying on a clamshell approach more in line with typical flip phones and uses foldable glass as opposed to plastic. At $1380, the Z Flip is significantly cheaper than the $1980 of the Galaxy Fold when it was released, and signals that this form factor is beginning to see downward price pressure as a result of increasing competition. Foldable phones still command a premium price, but Samsung’s pricing here is more in line with consumer expectations of premium handsets.
Besides the Z Flip, Samsung’s traditional flagship range has been updated, with the S20, S20+ and S20 Ultra driving Samsung’s presence in the premium smartphone segment. The primary focus for these devices, in line with trends present in the smartphone industry for the last few years, is the camera. In particular, the S20 range will all have the ability to shoot 8K quality content videos, which marks an industry first and highlights that smartphones are increasingly posing a threat to the professional camera market. Of course, 8K remains niche within entertainment content creation, distribution and consumption, and poses a range of other challenges to the smartphone, not least of which is the memory demands of 8K videos. Nevertheless, with 5G rollout worldwide accelerating, and entertainment content in high resolutions one of the key consumer use cases for this new network technology, Samsung clearly view this as an important development moving into the 5G era.
The final announcement worth considering is its partnerships with Microsoft and Netflix. The optimised video content with Netflix, and access to bonus content, again reinforces the notion that entertainment consumption is a key use case for smartphones and will remain so moving forward. This has been expanded with the cloud gaming partnership with Microsoft. This again is a feature designed to leverage 5G connectivity, bringing AAA gaming titles from the Xbox library to the smartphone, with Forza being a flagship title driving this service forward. Samsung’s move into content and services is particularly interesting when compared to Apple’s strategy in this space. While Apple are aiming to keep a closed ecosystem with its proprietary SVoD and gaming services in Apple TV+ and Apple Arcade respectively, Samsung are looking to create and utilise partnerships with well-known brands and vendors to supplement its hardware ecosystem. This is something we could see more of moving forward.
Overall, Samsung’s event pointed towards some interesting strategic trends within the company and having enjoyed growth in its smartphone business in 2019, it will hope to do so again this year. Having avoided the tumult of the US-China trade war, the company does face supply-side pressures as a consequence of the South Korea-Japan trade dispute, but the vendor remains in a good position for 2020.
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