Samsung profits fall as iPhone trumps Galaxy

Samsung makes beautiful hardware and sells more phones than any other company. All it needs to do now is to figure out how to make the business profitable.

This week the company posted its biggest drop in quarterly profit since  2009. According to Bloomberg, that happened despite selling more phones because the average selling price was lower and the company needed to spend more on marketing.

Bloomberg’s report suggests Samsung lost its edge to Apple when the American-based company started selling larger screen iPhones. This was an area where Samsung previously dominated. Now Samsung says it will soon launch new models, including the Galaxy Note 4, to help it compete.

Incremental

Sure that will help, but only a little. The Samsung Galaxy Note 4 is unlikely to be more than an incremental update to the company’s large format phone. Samsung needs more than that to compete with the iPhone.

Apart from anything else, Samsung needs to simplify its sales message. The last two Samsung product launches I’ve endured — and that word only goes part way to describe the full horror — have been a confused mess with complex, unclear signals and focus on dull apps or content-bundling deals that only apply in certain markets.

Giving customers in, say, the US, exclusive rights to a range of material, does nothing to help sales in Europe. And yet Samsung dedicated most of its recent product launch to going through these deals in minute detail.

Frankly, Samsung would do better by dumping all the bloatware loaded on its products, dropping the software overlays and using the money saved to cut prices. Its phones could do with better cameras and improved battery life. It either needs to cut free from Google’s Android operating system by building its own OS or embracing Android more enthusiastically. Either will work.