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I'm a full time Android developer. I have to wonder, what % of the slip is Android overall and what % is Samsung specifically. I have to say I'm not pleased wit

I'm a full time Android developer. I have to wonder, what % of the slip is Android overall and what % is Samsung specifically. I have to say I'm not pleased with the quality of the latest Samsung devices. Motorola, LG, and HTC all seem to be making higher quality phones.

MBCook 12y ago
But at this point the other Android manufactures (at least that have a good presence in the US) aren't making any money off Android phones, only Samsung was. If Samsung's profits are falling as an Android manufacturer where does that leave users? It's not like Samsung was selling below cost. Without them the others would have a higher market share but would they actually become profitable? Or is there just a glut of Android devices on the market to the point that no one would have an easy time making a profit in the current environment? Is this just a sign of a shake-up?
- ancientworldnow 12y ago
  On your not making any money comment, HTC has been profitable the past two quarters (https://gigaom.com/2014/10/03/by-managing-costs-htc-sees-another-profitable-quarter/ https://gigaom.com/2014/10/03/by-managing-costs-htc-sees-ano...) and LG has also been profitable in part due to their mobile division (http://www.lgnewsroom.com/newsroom/contents/64590 http://www.lgnewsroom.com/newsroom/contents/64590). Motorola seems to be heading towards profitability as well. Perhaps Samsung's decline has been in part to the success of these other handset manufacturers?
  - MBCook 12y ago
    That's good to know since Samsung used to be eating everyone's lunch and it was becoming a two horse race. As an outsider to this whole thing (Apple guy with little interest in buying an Android phone at this time) it has always seemed like there was a pretty big oversupply unless you only considered the flagship phones (and even then it's still arguable). The market share between the various Android manufacturers starting to even out sounds good to me, but I wonder what it would do for prices and how that would effect Android vs. iOS.
    - lnanek2 12y ago
      Samsung is destroying everyone in terms of market share. However companies like LG and HTC tend to intentionally just make the high price point phones where there is a lot more profit margin.
    - newscracker 12y ago
      The market share may even out in the low end segment, where many local manufacturers in different countries build cheap (and possibly outdated, from a first world perspective) hardware and slap whichever Android version they can accommodate (it may not be the latest). But overall, Samsung still holds a big chunk of Android market share and it would take several years for that to come down to something we can consider as stiff competition. Samsung has a lot of muscle and money to continue its "hardware machine gun" spraying tens of devices to see what sells, which is also aided well by a big marketing budget (probably the largest marketing budget among all, including Apple and Microsoft in the mix). The push to make Samsung more equal to other Android device makers could be from different directions. One is Samsung's desire to go with Tizen and sunset Android. This may not sit very well with the user base since the app market for Tizen needs to be built, and that's one reason why Tizen may likely shine in the nascent wearables segment than in the established smartphone, phablet and tablet segments. The other push is really good devices from HTC and Motorola that come with the latest version of Android and (especially for Motorola, in my knowledge) the ability to easily get updates easily and quickly. If HTC and Motorola survive for a few more years and continue whatever good work they're doing, then they do stand a chance to improve the overall market for the benefit of everyone.
  - megablast 12y ago
    $21 million for HTC isn't much, and doesn't help after the big losses after the last few years. LG looks like it is doing well. Overall, this is much better for Android, rather than having one big company.
    - jamesaguilar 12y ago
      The airlines are proof that wide profit margins are not necessary for massive gains in customer experience. (In the airline case, this experience is in the realm of vastly lower ticket prices, rather than an actual comfortable flying experience. But the point remains that you can fly today for 50% of the real cost of flying thirty years ago.)
- Steko 12y ago
  This is just the return to the natural state of the licensed OS market. Samsung got all that business by using their verticals to undercut everyone by pennies and then turned those carrier deals into profits via scale and by going with more inexpensive components. Quality of low end competitors spiked and these advantages are being eaten away and maybe the carriers have an interest in Samsung not becoming too big.
  - bhouston 12y ago
    > carriers have an interest in Samsung not becoming too big. Unlikely. Carriers care about their margins. And if there are cheaper phones to sell that customers truly want, then the margins for the carriers can be higher as they can take a percentage of the price differences for themselves. Thus carriers want to have as low priced hardware as possible that still work on the high end networks and that customers want so they can sell more service subscriptions -- which is where they make their money.
    - Steko 12y ago
      It stands to reason that in the long run Samsung would get better margins if they are consistently the majority of phones sold on all carriers. All things being equal its to the carriers advantage to have a number of suppliers.
    - Steko 12y ago
      It stands to reason that in the long run Samsung would get better margins if they are consistently the majority of phones sold on all carriers. All things being equal its to the carriers advantage to have a number of suppliers.
- adventured 12y ago
  This fundamental problem is almost identical to the problems PC manufacturers constantly ran into as the market and its margins were in constant turmoil over the late 1980s - mid 2000's. One minute a company would be booming, the next it would be hard times and weak margins. With the understood history being that only a few PC makers survived at all, despite the extreme sales scale of the market.
  - demallien 12y ago
    Not to mention that Apple ended up eating up almost all of the profits of the PC market. It really is starting to feel like history is repeating itself
    - r00fus 12y ago
      With the difference being that, this time, Apple with full control over their entire supply chain (notably not beholden to Motorola/IBM/Intel as chip manufacturers), can outmaneuver their competitors in ways that were simply not possible even a decade ago.
    - ZeroGravitas 12y ago
      Microsoft and Intel, not Apple, ended up eating almost all of the profits in the PC market. Comparing Apple only to the manufacturers who had to deal with those two giant monopsonies who supplied the two basic requirements for a "Wintel" PC is missing the point massively. It also makes things interesting for this time around as Google and ARM have very different business strategies than Windows and Intel did at that time.
      - souldoubt 12y ago
        You're right in terms of the '90s and early aughts, but I believe the commenter is referring to current market conditions. That is, "Apple ended up eating almost all of the profits in the PC market" means since about 2009 or so. Between MacBooks and iPads, Apple claims an outsized portion of the industry profits relative to its market share, as with iPhone. Somebody correct me if I'm wrong: hasn't Apple seen its Mac line market share grow for something like 26 straight quarters? And, since they're high-end / premium devices (> $1,000), the margins (and therefore profit) are higher (again, like iPhone).
- megablast 12y ago
  It is a race to the bottom. Which is strange, since Samsung top of the line are almost as expensive as Apples.
  - simonh 12y ago
    Sales of each individual phone model are a tiny fraction of iPhone model lifetime sales though, so I suspect they don't get anywhere near the same economies of scale. Then of course there are Apple's revenues from licensed accessories, which are highly profitable and sell well.
  - ZeroGravitas 12y ago
    "a race to the bottom" between corporate manufacturers is the very definition of free-market competition. It's very odd to see that talked down as if it was a bad thing on Hacker News as in any story not involving Apple free-market competition would be hailed as the driver of basically all social improvement and technological progress in the last century or so. Also, that's why it's not surprising that in this particular "race to the bottom" that there would still be high-end models being sold by HTC, Samsung etc., though you would expect them to be putting pressure on competitors to be offering more value and/or lower prices across their entire range.
testrun 12y ago
According to the article, there was no slip in Samsung sales. There was a slip in margins.
- staunch 12y ago
  They're being forced to reduce margins to keep sales up, so it's effectively the same thing. They can't make good enough phones for cheap enough.
  - zanny 12y ago
    Or, the inverse, they were first to market (and the S series kind of was as the staple Android competitor to the iPhone for quite a while after Motorola and the Droid line dried up) and saw huge returns on that for a while, until competitors caught up.
- megablast 12y ago
  Samsung sell a range of devices, from cheap low margin product to the high margin Galaxy's. If they have started selling less Galaxy's and more cheap devices, this will have a big impact on their profits.

MBCook 12y ago

But at this point the other Android manufactures (at least that have a good presence in the US) aren't making any money off Android phones, only Samsung was. If Samsung's profits are falling as an Android manufacturer where does that leave users? It's not like Samsung was selling below cost. Without them the others would have a higher market share but would they actually become profitable? Or is there just a glut of Android devices on the market to the point that no one would have an easy time making a profit in the current environment? Is this just a sign of a shake-up?

ancientworldnow 12y ago
On your not making any money comment, HTC has been profitable the past two quarters (https://gigaom.com/2014/10/03/by-managing-costs-htc-sees-another-profitable-quarter/ https://gigaom.com/2014/10/03/by-managing-costs-htc-sees-ano...) and LG has also been profitable in part due to their mobile division (http://www.lgnewsroom.com/newsroom/contents/64590 http://www.lgnewsroom.com/newsroom/contents/64590). Motorola seems to be heading towards profitability as well. Perhaps Samsung's decline has been in part to the success of these other handset manufacturers?
- MBCook 12y ago
  That's good to know since Samsung used to be eating everyone's lunch and it was becoming a two horse race. As an outsider to this whole thing (Apple guy with little interest in buying an Android phone at this time) it has always seemed like there was a pretty big oversupply unless you only considered the flagship phones (and even then it's still arguable). The market share between the various Android manufacturers starting to even out sounds good to me, but I wonder what it would do for prices and how that would effect Android vs. iOS.
  - lnanek2 12y ago
    Samsung is destroying everyone in terms of market share. However companies like LG and HTC tend to intentionally just make the high price point phones where there is a lot more profit margin.
  - newscracker 12y ago
    The market share may even out in the low end segment, where many local manufacturers in different countries build cheap (and possibly outdated, from a first world perspective) hardware and slap whichever Android version they can accommodate (it may not be the latest). But overall, Samsung still holds a big chunk of Android market share and it would take several years for that to come down to something we can consider as stiff competition. Samsung has a lot of muscle and money to continue its "hardware machine gun" spraying tens of devices to see what sells, which is also aided well by a big marketing budget (probably the largest marketing budget among all, including Apple and Microsoft in the mix). The push to make Samsung more equal to other Android device makers could be from different directions. One is Samsung's desire to go with Tizen and sunset Android. This may not sit very well with the user base since the app market for Tizen needs to be built, and that's one reason why Tizen may likely shine in the nascent wearables segment than in the established smartphone, phablet and tablet segments. The other push is really good devices from HTC and Motorola that come with the latest version of Android and (especially for Motorola, in my knowledge) the ability to easily get updates easily and quickly. If HTC and Motorola survive for a few more years and continue whatever good work they're doing, then they do stand a chance to improve the overall market for the benefit of everyone.
- megablast 12y ago
  $21 million for HTC isn't much, and doesn't help after the big losses after the last few years. LG looks like it is doing well. Overall, this is much better for Android, rather than having one big company.
  - jamesaguilar 12y ago
    The airlines are proof that wide profit margins are not necessary for massive gains in customer experience. (In the airline case, this experience is in the realm of vastly lower ticket prices, rather than an actual comfortable flying experience. But the point remains that you can fly today for 50% of the real cost of flying thirty years ago.)
Steko 12y ago
This is just the return to the natural state of the licensed OS market. Samsung got all that business by using their verticals to undercut everyone by pennies and then turned those carrier deals into profits via scale and by going with more inexpensive components. Quality of low end competitors spiked and these advantages are being eaten away and maybe the carriers have an interest in Samsung not becoming too big.
- bhouston 12y ago
  > carriers have an interest in Samsung not becoming too big. Unlikely. Carriers care about their margins. And if there are cheaper phones to sell that customers truly want, then the margins for the carriers can be higher as they can take a percentage of the price differences for themselves. Thus carriers want to have as low priced hardware as possible that still work on the high end networks and that customers want so they can sell more service subscriptions -- which is where they make their money.
  - Steko 12y ago
    It stands to reason that in the long run Samsung would get better margins if they are consistently the majority of phones sold on all carriers. All things being equal its to the carriers advantage to have a number of suppliers.
  - Steko 12y ago
    It stands to reason that in the long run Samsung would get better margins if they are consistently the majority of phones sold on all carriers. All things being equal its to the carriers advantage to have a number of suppliers.
adventured 12y ago
This fundamental problem is almost identical to the problems PC manufacturers constantly ran into as the market and its margins were in constant turmoil over the late 1980s - mid 2000's. One minute a company would be booming, the next it would be hard times and weak margins. With the understood history being that only a few PC makers survived at all, despite the extreme sales scale of the market.
- demallien 12y ago
  Not to mention that Apple ended up eating up almost all of the profits of the PC market. It really is starting to feel like history is repeating itself
  - r00fus 12y ago
    With the difference being that, this time, Apple with full control over their entire supply chain (notably not beholden to Motorola/IBM/Intel as chip manufacturers), can outmaneuver their competitors in ways that were simply not possible even a decade ago.
  - ZeroGravitas 12y ago
    Microsoft and Intel, not Apple, ended up eating almost all of the profits in the PC market. Comparing Apple only to the manufacturers who had to deal with those two giant monopsonies who supplied the two basic requirements for a "Wintel" PC is missing the point massively. It also makes things interesting for this time around as Google and ARM have very different business strategies than Windows and Intel did at that time.
    - souldoubt 12y ago
      You're right in terms of the '90s and early aughts, but I believe the commenter is referring to current market conditions. That is, "Apple ended up eating almost all of the profits in the PC market" means since about 2009 or so. Between MacBooks and iPads, Apple claims an outsized portion of the industry profits relative to its market share, as with iPhone. Somebody correct me if I'm wrong: hasn't Apple seen its Mac line market share grow for something like 26 straight quarters? And, since they're high-end / premium devices (> $1,000), the margins (and therefore profit) are higher (again, like iPhone).
megablast 12y ago
It is a race to the bottom. Which is strange, since Samsung top of the line are almost as expensive as Apples.
- simonh 12y ago
  Sales of each individual phone model are a tiny fraction of iPhone model lifetime sales though, so I suspect they don't get anywhere near the same economies of scale. Then of course there are Apple's revenues from licensed accessories, which are highly profitable and sell well.
- ZeroGravitas 12y ago
  "a race to the bottom" between corporate manufacturers is the very definition of free-market competition. It's very odd to see that talked down as if it was a bad thing on Hacker News as in any story not involving Apple free-market competition would be hailed as the driver of basically all social improvement and technological progress in the last century or so. Also, that's why it's not surprising that in this particular "race to the bottom" that there would still be high-end models being sold by HTC, Samsung etc., though you would expect them to be putting pressure on competitors to be offering more value and/or lower prices across their entire range.

testrun 12y ago

According to the article, there was no slip in Samsung sales. There was a slip in margins.

staunch 12y ago
They're being forced to reduce margins to keep sales up, so it's effectively the same thing. They can't make good enough phones for cheap enough.
- zanny 12y ago
  Or, the inverse, they were first to market (and the S series kind of was as the staple Android competitor to the iPhone for quite a while after Motorola and the Droid line dried up) and saw huge returns on that for a while, until competitors caught up.
megablast 12y ago
Samsung sell a range of devices, from cheap low margin product to the high margin Galaxy's. If they have started selling less Galaxy's and more cheap devices, this will have a big impact on their profits.