Samsung: Has the anti-Apple lost its way?

“We know what happens to people who stay in the middle of the road. They get run over.”
 Ambrose Bierce

The Apple [AAPL] versus Samsung story takes a new twist next month when the Korean firm attempts to undermine September 10's iPhone launch with its own earlier special event, but has the anti-Apple lost the power to innovate?

You only need to scratch the surface to see signs Samsung has lost its way. In isolation, perhaps, they mean too little to pronounce a death sentence, but together they suggest difficult times ahead.

The OS

Samsung has hitchhiked its way into a leading place in the smartphone industry on the back of an operating system someone else develops.

What's challenging about this decision is that the OS is also available to other vendors, depriving Samsung of any unique selling point and instantly transforming it into a commodity player, rather than a premium marque.

Meanwhile, the company's attempts to develop its own operating systems have failed to gain any significant traction.

Product design

Samsung is embroiled in litigation worldwide, and while it has prevailed on a few occasions it has failed to secure any outright victory by which it can claim complete ownership of its products.

The way its products are designed and their user interface have both seen negative judgments against the firm in the courts -- might this mean it has lost its edge when it comes to creating cutting edge consumer solutions?

The problem the company faces is that many consumers now consider Samsung as little more than a "cheap" alternative that imitates the features and design of other (more expensive) market leading devices.

Can the company sustain this consumer-perception-driven slow but steady descent into being regarded as mundane?

The way it is used

This problem isn't unique to Samsung, but the consistent pattern of most (if not all) mobile device usage surveys shows the Korean firm's devices aren’t as widely used as those made by its nearest big competitor.

This means that while many consumers own a Samsung device, few make use of the Web browser, apps, or other features they have available on their systems -- though its users do seem to consume rather a lot of advertising.

This lack of usage impacts Samsung's brand loyalty. While other platforms and devices offer consumers solutions they use frequently as they become ever more loyal to the product experience, Samsung's customers seem slow to develop a Galaxy addiction.

The direct consequence of this failure is that Samsung's customers are far more prepared to abandon the platform in favor of the nearest competing platform. Many consumers simply settle on a Samsung on their journey to a better-regarded smartphone.

Can Samsung maintain its current popularity if it remains unable to improve user engagement and loyalty levels among its customers?

Security and software upgrades

Samsung does offer one of the most secure Android implementations in the form of its enterprise-focused Knox-branded range; unfortunately those premium smartphones aren't its most popular devices, meaning most of its customers remain exposed to the malware threats that characterize the Android experience.

These malware threats mean the US Department of Justice and the Department of Homeland Security last year warned that 79 percent of malware is designed to attack Android. This figure should logically be seen in contrast to the 0.7 percent of malware designed to attack Samsung's biggest competitor.

The agencies published a memo to police, fire and other emergency personnel in which they warned the two most common malware types include bogus SMS messages and malware pretending to be legitimate apps. It is noteworthy that the Android malware scourge has intensified across the last year -- recent data suggests 92 percent of new malware threats now target Android.

Any responsible vendor would protect against such threats with fast and immediate software upgrades to protect their platform. Unfortunately, Samsung's wide product ranges as well as the lackadaisical approach to security shown by mobile carriers mean most Samsung owners remain exposed to such vulnerabilities, as software updates are not easily made available to them.

With this in mind, is Samsung in position to deal with the PR disaster of any future major malware attack on its Android-based devices? Worse, in the event of such an attack would the company be able to reassure its customers they were protected, given it cannot easily patch the diverse systems that constitute its installed base?

Corporate identity

Samsung has been reticent when it comes to addressing critics of the way it does business.

When it comes to working practices, for example, while other vendors now choose a public and fairly transparent manner in which to attempt to improve the lot of workers, Samsung management has preferred to remain relatively silent in response to such criticism. It also operated a "no union" policy in its factories until relatively recently, though it did identify shortcomings in elements of its supply chain in 2012.

This is a problem of identity. Samsung has executed a strategy of defining itself as the nemesis of its nearest competitor by focusing on the perceived weak points of that competitor within its marketing, but the company has so far failed to deliver a positive message in which it defines its own identity without reference to competitors.

This lack of identity in conjunction with the secretive way in which the company transacts its business inevitably impacts consumer perception as to the integrity of the brand. Can Samsung remain dominant in the world's most vibrant technology sector if it fails to define itself as an entity people can believe in.

Sharp practices

Samsung has also damaged its own reputation with a series of widely publicized poor practices, including:

These poor practices inevitably impact Samsung's corporate credibility, despite its attempts to mitigate the damage such revelations cause.

Innovation

It has been a long, long time since Samsung hit the smartphone market with a product that matches the visceral, life-changing appeal of an Apple iPod.

This failure to innovate is becoming a continuous pattern, and while Samsung is expected to introduce its notions of products the design of which were themselves inspired by months of rumors regarding the plans of its nearest competitor, the company hasn't yet delivered on expectation to change the paradigm.

For a company with the resources and scale of Samsung it would be easy to assume it would be able to develop features more innovative than simply a range of different sized displays -- the firm isn't even developing its own OS, after all.

Unfortunately Samsung hasn't yet matched the level of innovation we once expected from its closest competitor. Has innovation died at the company? Only time will tell.

Meanwhile Samsung continues to lack the kind of articulate and charismatic leadership its closest competitor previously enjoyed.

Conclusion

Samsung has become the world's biggest smartphone vendor, but its position is insecure, given that its biggest competitor continues to win customers across while its corporate identity leaves something to be desired.

Naturally Samsung hopes to make up for its vulnerabilities by making huge investments in marketing, but given Google's support for Motorola it is open to question how long the Korean firm will be permitted to top the Android smartphone tree, given it does not develop the OS.

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