Android Intelligence Analysis

Hey, Google: Maybe it's time to take a lesson from Samsung

Google could stand to learn a few things from Samsung's smartphone strategy — but the lesson has little to do with the devices themselves.

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Android Intelligence Analysis

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Whew! I don't know if you heard, but Samsung held its first super-duper-neato special event of the year on Tuesday, and the company's got a few new phones for us all to ogle.

The devices themselves seem fine enough, in their respective ways. I'll sum 'em up quickly for you, because what I really want to talk about is something a bit deeper. So here's the lowdown:

  • The Galaxy S20 is Samsung's new main 2020 flagship. It comes in three models, all with 5G in the U.S., and they're all about as Samsung as it gets: big screens, small bezels, and All The Specs™ — loads o' numbers that look impressive on paper (108 megapixels! 8K video! 120Hz screens! 16GB of RAM!) but ultimately mean very little when it comes to real-world impact. They're also expensive: $1,000 on the lower end and all the way up to $1,600 for the maxed-out top-of-the-line model.
  • The Galaxy Z Flip is a new horizontally-folding foldable phone — basically a better version of the recently released Motorola Razr, from the looks of it, and an interesting technological advancement but almost certainly something no normal person should actually buy at this point.

That's the ultra-abbreviated version, anyway. The reality is that Samsung's bound to sell a boatload of its Galaxy S20 phones, as it generally does with its primary new flagships — and that's the area I really wanted to explore.

First, a quick pinch of context: Aside from creating appealing devices, Samsung has worked hard over the years to build up brand awareness and loyalty. Initially, that was driven by bold, memorable, and ubiquitous marketing — but then, at least in part, it turned into a bit of a self-propagating cycle. By that, I mean that the longer someone sticks with a particular style of Android phone and the more times they upgrade from one generation of that phone to another, the more likely they are to make that same sort of upgrade the next time the need arises.

Think about it: How many people do you know who bounce between different brands within Android? In my experience, outside of a small subset of enthusiasts, most people don't even entertain the notion. They've had Galaxy phones for the past few cycles, so when the time to upgrade comes around, the only question they consider is which model and style of Galaxy phone they want to get. Just as smartphone platform preference has largely become tribalized, smartphone brand preference within Android seems to have turned into a mostly static quality.

And the effects of that go even deeper: When someone who doesn't yet have a strong brand preference within Android looks to make a buying decision — an average phone-buyer, whether for individual or company-wide purposes — what do they think about first? More often than not, it's what brand they know and see everywhere they look, both in the hands of their colleagues or companions and in the most prominent positions on store shelves. Once that cycle starts, it's difficult to disrupt.

Samsung knows that, and it showed us this week just how carefully it's working to reinforce that cycle — in a way that's almost the polar opposite of what Google does with its Pixel line of phones.

Think about these bigger-picture takeaways from this week's Samsung event and how much of a contrast they illustrate between Samsung's smartphone selling approach and Google's:

1. Samsung revealed that Galaxy S owners are waiting longer than ever to upgrade their devices.

This first one's mostly just for context, but it's important: The average upgrade cycle among Galaxy S owners, specifically, jumped from 22.6 months in 2016 to 26.6 months in 2019 — an increase of 18%, according to Samsung. That mirrors the industry-wide pattern we've been hearing about for a while now, but seeing Samsung acknowledge the same trend specific to Galaxy S owners — and seeing it get stated with the flat-out assumption that those Galaxy S owners are gonna upgrade to a new Galaxy S phone and not any other brand's offering — is pretty telling.

It also leads us directly to our next point:

2. For the first time, Samsung is going to keep producing its previous-generation phone — the Galaxy S10 — and will sell all of those models for $150 less than their original prices.

This is something Apple has long done but most Android device-makers (Google included) have yet to come around to — and by golly, it makes so much sense, it almost hurts.

Yes, Samsung's Galaxy S20 prices may be mildly outrageous, but if you don't want to drop a cool grand or more on a bunch of cutting-edge technology you probably don't need, well, now you can get last year's still-quite-impressive Galaxy S10 phone for a much more palatable $750 price. Heck, you can go as low as $600, if you want to drop down to the still-perfectly-nice S10e model.

Google did this ever so briefly with the Pixel 2 back when the Pixel 3 came out, which gave me hope that it was adopting a similarly smart strategy — one that would be especially sensible with Pixel phones, by the by, being that they're the only Android devices to receive a full three years of guaranteed operating system updates — but it turned out the company was just selling off whatever stock it had left as opposed to continuing to produce the older model as a deliberate, ongoing strategy. Alas.

And then there's the biggest point of all:

3. Samsung is bending over backwards to encourage current Galaxy owners to upgrade.

Sure, the Galaxy S20 might be a thousand bucks — but if you've got a Galaxy S10, you can trade in your old phone and get the new one for a mere $400 (unlocked and off contract). Got a Note 10? Samsung will give you a $700 trade-in credit and sell you the new model for $300.

Even older Galaxy models come with decent trade-in discounts. The Galaxy S9 and Note 9, for instance, give you $300 off the price of a new phone. And if you're coming from a Pixel, the Pixel 4 will net you a $600 credit, bringing the S20's price down to $400. The 2018 Pixel 3 will get you $300 off the S20's starting price. And even the midrange Pixel 3a will get you $200 off the price of a shiny new S20 phone.

Google has its own trade-in program for Pixel phone purchases, too, but it pales in comparison. The company offers a maximum of $265 in credit for a Galaxy S10 — less than half of what Samsung gives for that same device. Even for its own previous-gen Pixel 3, Google provides a maximum trade-in value of $165 toward a Pixel 4, compared to Samsung's $300 credit for that same Google-made phone.

A widely cited adage states that acquiring a new customer costs five times more than retaining an existing customer. Samsung may not provide anywhere near Google's level of post-sales software support — and hell, it even quietly sells its users' data! — but when it comes time to think about a new phone purchase, Samsung clearly knows the value of reinforcing its relationship with existing customers and motivating them to stick with the Galaxy brand. Google, on the other hand, seems to make little more than a token effort.

(And this isn't just on the phone front, either, incidentally: Over on the smart speaker side of things, where Amazon is absolutely slaughtering Google despite having an objectively worse product, Amazon wisely encourages Echo owners to trade in their older devices in order to receive a store credit plus an instant 25% off any new Echo product. Google puts out plenty of new smart speaker models but does absolutely nothing to encourage that same sense of brand loyalty and repeat purchasing among owners of its aging products.)

When I think about all the stuff Samsung announced this week, the phones are certainly everything everyone hoped they would be — eye-catching, technologically impressive, and probably the precise right amount of push forward needed to maintain Samsung's mobile-tech dominance. But the circumstances surrounding those phones seem far more significant to me, especially in that bigger-picture sense of what Samsung's doing to support its technology and reinforce the loyalty it's worked so hard to create.

We can talk endlessly about the ways Google could position its Pixel phones and market them to the masses, but even if it manages to win over new users, it needs to come up with a smarter strategy for maintaining its momentum and creating a self-propagating cycle of customer loyalty. And, as Samsung's reminding us all this week, it doesn't have to look far to find an example of exactly how that oughta be done.

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[Android Intelligence videos at Computerworld]

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