For the first time in a long time, Samsung is hitting a bit of a rough patch.
The company just posted its first year-over-year drop in profits since 2011, Bloomberg reports.
Bloomberg says the problem for Samsung is that its smartphone sales are predicted to stagnate. Apple owns the high end, while Chinese handset makers, which sell phones for $US100 off contract are taking over the low end.
Samsung is stuck in the middle trying to find growth. Sales of its Galaxy phones are cooling, along with the TV market, says Bloomberg.
In the middle of Bloomberg’s story on Samsung, it has two sentences that pretty define the company:
Samsung, which is facing stalling demand for TVs, said today it will release its first set with a bendable screen later this year. Viewers can change the display from flat to curved by touching a button, it said in a statement.
The curved display TVs do nothing for users. CNET’s TV expert
David Katzmaier said of bendable TV displays: “Like a lot of concept demos at CES, the bendable TV is more a novelty with little practical application.”
This is a sort of a Rorschach test for anyone that follows Samsung.
If you’re a Samsung supporter, you see this and shrug. Samsung’s model is to try everything and see what sticks. The Galaxy Note, for instance, was ridiculed at first for being too large, but has since proven to be something people want. If people don’t buy bendable TVs, Samsung will just shelve it. If they do buy bendable TVs, then great.
If you’re a Samsung sceptic, this is the just the latest example of a half-baked gimmick from Samsung thrown out there to see what sticks. If Samsung really wanted to make its TVs better it would focus on developing ground-breaking software interfaces and new user experiences instead of bending the screen for no apparent reason. Samsung does make a line of Smart TVs with a user interface that can help predict what you’d want to watch, but it hasn’t yet nailed a formula to revolutionise TV. (To be fair, no one has.)
Why does this sort of debate matter? With Samsung’s profits dipping for the first time, and its growth engine (smartphones) slowing, it’s up to Samsung to figure out what’s next.
If you believe in Samsung’s model of trying everything and hoping for the best, then you’re probably bullish it stumbles into the next thing. It you don’t believe in Samsung’s model, then you probably think it’s doomed to fall hard.