Samsung gets aggressive as rivals sit in 5G purgatory

With MWC 2020 quickly becoming a dud, Samsung didn’t hang around to unveil three new 5G smartphones, a foldable device and its latest earbuds.

If there was ever a time for Samsung to go big and noisy with a product launch, now is it. Huawei’s smartphone division is sprinting into the realms of irrelevance while Apple is unlikely to make waves until the end of the year. Aside from a few outliers, Samsung effectively has a monopoly on the consumers attention when it comes to tier-one smartphone launches.

At its ‘Unpacked’ event in San Francisco, Samsung released the Galaxy S20 series (S20, S20+ and S20 Ultra), a foldable device known as the Galaxy Z Flip and the new Galaxy Buds+, as well as a number of interesting partnerships.

“Samsung has a huge start over rivals in 5G with a broad range of devices,” said Paolo Pescatore of PP Foresight.

“There has been no better time for Samsung to increase its market share given Huawei’s current woes and Apple yet to release a 5G iPhone. Support for sub-6Ghz, mmWave technology and dynamic spectrum sharing ensures that its 5G devices will appeal globally. This is paramount as mmWave is being positioned as the ‘best’ of 5G, a topic that will emerge as a strong theme throughout 2020 as telcos roll out networks.”

As with many of these launches, there isn’t a huge amount of innovation in the phone aside from incremental change. Sure, it has 5G which is faster than 4G, 8K which is better than 4K, an AI-supercharged camera which is better than a normal one, but it is bells and whistles which would more likely fall into the ‘best in class’ category as opposed to innovation.

That said, you have to give credit where it is due, the team has launched a series of devices which beat rivals to the punch, look good and are generally receiving positive reviews. In the absence of genuine innovation, Samsung seems to have created an excellent product, an adequate substitute.

Looking at the development of the ecosystem, there are a number of interesting announcements, including Netflix and Google.

“In the coming months, Samsung mobile users will have access to a whole host of new and exciting bonus content based on some of your favourite Netflix Originals, accessible through Samsung Daily and Samsung channels,” said Netflix’s Chief Marketing Officer, Jackie Lee-Joe.

“Thanks to 5G, the video calls are higher quality, and that makes you feel more connected to the person you’re talking to,” said Hiroshi Lockheimer, SVP of Platforms and Ecosystems at Google. “Also, with Duo built right into Galaxy’s native apps, we can help people connect much more seamlessly, without interruption.”

Neither of these partnerships will create a buying position alone, but this is all about the incremental gains. An excellent camera, 5G, 8K video, original and unique content, and a better software experience all add-up to make a compelling product. Another interesting element is the focus on gaming.

“Another key emphasis for Samsung on the Galaxy S20 is gaming performance. The new devices are using a display with an extremely high refresh rate of 120Hz with a 240Hz input sensor which, when coupled with 5G, would give gamers the quickest reactions of any mobile gaming solution,” said Daniel Gleeson, Principal Analyst, Consumer Technology at Omdia.

“Samsung is so confident in the gaming capabilities of the new Galaxy S20 that they have announced a partnership with gaming company, Forza Street, with cross play with PC gamers enabled.”

Gaming is quickly becoming mainstream as more immersive and complex titles are moved onto or designed for the mobile platform. The segment is growing rapidly, and OEMs and telcos alike have to be paying much more attention to how experiences can be customised for gaming.

While there are incremental gains to consider across all areas of the device, 5G included, interesting partnerships and a homage to the rising popularity of gaming, this does not appear to be a product launch which is out of the ordinary. We imagine Samsung’s competitors will create a product which is incredibly similar. The difference will be marketing dollars.

The ‘Unpacked’ event is a marketing exercise learned from Apple to cultivate the brand, while Samsung also has an opportunity to capitalise on the Huawei woes and steal Android customers. Xiaomi and OnePlus might have something to say about this, but thanks to an early launch date, Samsung has an excellent opportunity to make a march on market share and consolidate its market leading position. It just has to be clever and bold with marketing campaigns. Money speaks more than innovation currently.

Early 5G smartphone market all about Samsung and Huawei

Research firm Strategy Analytics has been looking at last year’s 5G smartphone shipments and found most of them were accounted for by just two vendors.

SA says there was more demand for 5G smartphones than it expected. It looks like operators jumped on the future-proofing bandwagon, even though any 5G devices they sold would probably only get a 5G connection in their own HQ, and even then only if you were actually sat on a base station. As a consequence SA says around 19 million 5G phones were shipped, with almost three quarters of those made by Samsung or Huawei.

“Global 5G smartphone shipments grew from zero in 2018 to 18.7 million units in 2019,” said Ken Hyers of SA. “Demand for 5G smartphones is higher than many expected. Fierce vendor competition in China and heavy carrier subsidies across South Korea have been the main drivers of 5G demand. Other regions, like the US and Europe, are lagging behind Asia, but we expect them to close the gap later this year.”

“Almost all Huawei’s 5G smartphones were shipped in China, where US sanctions have made relatively less impact,” said Ville-Petteri Ukonaho of SA. “Popular 5G models for Huawei include the Mate 20 X 5G and Mate 30 Pro 5G. Samsung is number two and shipped 6.7 million 5G smartphones worldwide during 2019, capturing a healthy 36 percent marketshare. Samsung’s 5G smartphone shipments are international and span a wide spread of countries, from South Korea to the UK to the United States. Popular 5G models for Samsung include the Note 10 5G and S10 5G.”

“Upcoming 5G models from Apple iPhone and other big brands mean 5G will be the hottest part of the worldwide smartphone market this year,” said Neil Mawston of SA. “However, the recent coronavirus scare is currently restricting trade in some parts of China and this may well cause a slowdown in 5G supply or demand across Asia or worldwide during the first half of 2020. Industry players should be prepared for bumpy 5G sales in some markets.”

A couple more of them piped up too, but we figure you got the message. The presumed launch of 5G iPhones will definitely take 5G hype into the mainstream and will also put pressure on operators to deliver a network and service that offers something more than 4G. These numbers largely follow the broader smartphone market, given Apple’s early absence thanks to its feeble efforts to strong-arm Qualcomm. It is interesting to see how much of a jump Huawei seems to have got in the Chinese market, however.

 

Global 5G Smartphone Shipments by Vendor (Millions of Units) 2018 2019
Huawei 0.0 6.9
Samsung 0.0 6.7
Vivo 0.0 2.0
Xiaomi 0.0 1.2
LG 0.0 0.9
Others 0.0 1.0
Total 0.0 18.7
     
Global 5G Smartphone Marketshare by Vendor (% of Total) 2018 2019
Huawei 0.0% 36.9%
Samsung 0.0% 35.8%
Vivo 0.0% 10.7%
Xiaomi 0.0% 6.4%
LG 0.0% 4.8%
Others 0.0% 5.3%
Total 0.0% 100.0%
     
Source: Strategy Analytics

SK Telecom claims multi-vendor 5G transmission first with Ericsson and Samsung

Korean operator SK Telecom says it has managed the world’s first standalone 5G data session on a multi-vendor commercial 5G network.

Single vendor set-ups are increasingly out of fashion in the telecoms world, with the traditional wariness about vendor lock-in compounded by geopolitical uncertainty that threatens to compel the exclusions of certain vendors that shall remain nameless. So this is an important step for 5G as well as another opportunity for South Korea to virtue-signal about how cutting-edge it is when it comes to 5G.

“With the successful standalone 5G data call on our multi-vendor commercial 5G network, we are now standing on the threshold of launching standalone 5G service, a key enabler of revolutionary changes and innovations in all industries,” said Park Jong-kwan, Head of 5GX Labs at SK Telecom. “SK Telecom will offer the best 5G networks and services to realize a whole new level of customer experience in the 5G era.”

The two vendors in question were Ericsson and Samsung. SKT wasn’t inclined to go into great depth on how this pivotal feat was achieved. We do know it involved applying SA NR radio to existing NSA base stations and, hey presto, it all worked a treat. While it was at it SKT decided to dabble in a spot of network slicing and edge computing, which frankly seems like showing-off, but then again if you’ve got it, flaunt it, innit.

Most smartphone brands are worthless

New research from IHS Markit reveals that, beyond Apple and Samsung, people aren’t loyal to smartphone brands.

This conclusion is based on a multinational survey (US, Brazil, UK, Germany, Japan, and India) conducted last year, in which IHS asked punters how they go about picking a mobile. The most common reason was the hardware, which is reassuring, and on the whole it found that people were less brand loyal ask they earned less money.

A big reason for that last trend will surely be the fact that the brand that attracts the most loyalty is also the most expensive – Apple. The only other brand that HIS found people expressed a large degree of loyalty towards was Samsung. It’s presumably no coincidence that these two companies spend far more money on marketing than any of the others.

Apple and Samsung combined claimed a customer loyalty rate of 69%, while all the rest could only manage 33%. When two thirds of your customer base are disloyal, it’s fair to say your brand is essentially worthless in that context, especially since a lot of brand loyalty can simply be attributed to inertia.

“Apple and Samsung have worked diligently over many years to build their brands, spending heavily on marketing and advertising to maintain a strong following among consumers,” said James Allison, Analyst at IHS. “As a result, these two companies have been able to erect competitive bulwarks that insulate them from the pressures faced by other brands. For companies not named Apple or Samsung, conditions in the smartphone business are intensely competitive, as companies battle over a few percentage points of market share without the benefit of a leading brand name.”

IHS didn’t give specific brand loyalty numbers for Apple and Samsung but it seems safe to assume Apple’s is higher. How much of this is down to brand alone, however, is debatable, since IHS seems to consider upgrading from a phone of the same brand to be evidence of brand loyalty. Since Apple uses a different OS and content ecosystem from all other smartphone makers, for many of its customers moving away from it is just too much hassle, so their ‘loyalty’ is more a matter of pragmatism than sentiment.

Samsung claims the 5G lead after 6.7 million shipments

It might be nothing more than a symbolic milestone for the moment, though Samsung us claiming it is leading the way for 5G device shipments at the close of 2019.

After claiming to have sold 2 million devices at IFA in September, Samsung seemingly romped through the final three months with a total of 6.7 million 5G device shipments for 2019. The figure eclipses the 4 million target the firm set itself, though as its main Android competitor (Huawei) is being stifled by political friction, it is hardly surprising Samsung has stormed into the lead.

What is worth noting is this is nothing more than a bit of posturing. 6.7 million devices is simply a drop in the ocean of potential and could be dwarfed by an aggressive campaign by Apple in the US or Huawei in China. That said, you cannot argue with the figures; in the absence of main competitors, Samsung is maintaining its leadership position in the 5G segment as well as 4G.

“Consumers can’t wait to experience 5G and we are proud to offer a diverse portfolio of devices that deliver the best 5G experience possible,” said TM Roh, President of the IT & Mobile Communications Division.

“For Samsung, 2020 will be the year of Galaxy 5G and we are excited to bring 5G to even more device categories and introduce people to mobile experiences they never thought possible.”

While many analysts do not share Samsung’s belief that the consumer is clawing at the walls for 5G connectivity, there are likely to be more sales across the year. Firstly, geographical coverage will improve to whet the appetite, and secondly, 5G will come as standard on device; device shipments will most likely organically increase.

What will be worth keeping an eye on is the choices made by device manufacturers over the coming months as flagship models are pumped and hyped at industry conferences. Perhaps the most interesting element will be the ways and means by which the OEMs work with Qualcomm.

It has become widely accepted that the latest Qualcomm chipset features in the majority of flagship smartphone devices throughout the year. However, this year some OEMs will have a choice to make; to integrate or not to integrate?

Over the next few months Qualcomm will begin shipping both the Snapdragon 865 and Snapdragon 765 chipsets. The Snapdragon 865 is more powerful, though 5G is on a separate modem, potentially decreasing the power efficiency of devices. The Snapdragon 765 has 5G connectivity integrated, though is notably less powerful. Whichever chipset OEMs elect for, there will be a trade-off to stomach.

Looking at the rumours spreading through the press, it does appear many of the smartphone manufacturers are electing for the Snapdragon 865 and a paired 5G modem in the device. Samsung’s Galaxy S11, Sony Xperia 2 and the Google Pixel 5 are only some of the launches suggested to feature the Snapdragon 865 as opposed to its 5G integrated sister chipset.

5G might not have gotten off to the blistering start some in the industry would have been hoping for, but there is still plenty to come. With Mobile World Congress kicking-off in just over two months, there is amble opportunity for new devices to be launched prior, during and just after the event, while the iLifers will have all eyes cast towards September for Apple’s launch.

Samsung had three quarters of 5G shipments in Q3 – IHS

While the 5G smartphone market is in its infancy, Samsung has been the most proactive vendor and accounted for a quarter of shipments in Q3 as a consequence.

Research firm HIS Markit reckons a total of 4.3 million 5G smartphones were shipped in the third quarter of this year and 3.2 million of those were Samsung ones. This was more than double Samsung’s Q2 total of 1.5 million units, when it accounted for 83% of all shipments. Surprisingly the only other s% smartphone vendors of significance right now are LG and Vivo.

“Samsung has come out of the gate running in the initial stage of the 5G smartphone business,” said Gerrit Schneemann of IHS Markit Technology.  “The company successfully capitalized on its home-field advantage in the fast-developing South Korean market to rapidly ramp up shipments. Samsung also has moved quickly to fill out its 5G smartphone line, giving it the largest portfolio of any brand.

“5G devices enable smartphone OEMs, carriers and service providers to offer new handsets with a feature set that is not backwards compatible as existing 4G devices will not be able to connect to 5G networks. Here lies an opportunity for the entire ecosystem to reverse user behaviour, from increasing device lifecycles to delivering an upgraded mobile experience.”

The slow start from Huawei observed by HIS is at odds with the Strategy Analytics view of the 5G smartphone market. In its recent forecast SA gave Huawei a 30% share of the market going into 2020, for the two firms’ numbers to align Huawei is going to have to seriously raise its game in Q4 of this year.

SK Telecom and Samsung give 5G remote-controlled ships a go

Korea is looking to lead the way on autonomous shipping following the development of a 5G-based test platform by SK Telecom and Samsung Heavy Industries.

The new platform even includes a 3.3-meter-long test ship made by Samsung, which is equipped with with 5G-based LiDAR, a cloud-based IoT platform and T Live Caster, SK Telecom’s real-time video monitoring solution. Its maiden voyage took place in a shipyard that is covered by SK Telecom’s 5G network, enabling it to be remote controlled from 250 km away and to remotely keep an eye on its autonomous decisions.

“Today’s successful test marks a meaningful step towards commercialization of technologies for autonomous navigation of ships powered by 5G,” said Choi Il-gyu, Head of the B2B Office of SK Telecom. “SK Telecom will continue to drive innovations in the manufacturing sector with the world’s best 5G network and technologies.”

“We have now secured an optimal research environment to make a leap in the area of autonomous navigation ship technologies by combining Samsung Heavy Industries’ autonomous and remote navigation system and SK Telecom’s 5G communication technologies,” said Shim, Yong-Lae, VP of the SHI Ship & Offshore Research Institute.

While the thought of a supertanker cruising around the place thinking for itself is pretty alarming and dystopian, the companies involved insist this kind of technology actually improves safety, especially in narrow or shoreline environments, thanks to the ability to monitor the movements of other ships in real time. So long as the technology also ensures a human can step in if needed then that does sound plausible, if still a bit scary.

Google and Samsung camera app vulnerabilities exposed

Research by application security specialist Checkmarx has revealed that the camera apps on Google and Samsung smartphones can be hacked.

The findings were published in a blog post by the company, having previously been shared with Google and Samsung to give them a chance to patch the vulnerabilities before the whole world found out about them. So while this isn’t sensational news, because the vulnerability no longer exists, it’s still good PR for Checkmarx and a general Android security wake up call.

“We appreciate Checkmarx bringing this to our attention and working with Google and Android partners to coordinate disclosure,” said a statement from Google in the blog. “The issue was addressed on impacted Google devices via a Play Store update to the Google Camera Application in July 2019. A patch has also been made available to all partners.” The Indian government must have been disappointed.

Specifically it was found that third party apps could exploit the app permission system, through which new apps ask for your permission to access certain smartphone functions. A loophole allowed apps, once they had got permission to access the camera, to give remote control of the camera to baddies, thus allowing them to record what you’re up to.

“In doing so, our researchers determined a way to enable a rogue application to force the camera apps to take photos and record video, even if the phone is locked or the screen is turned off,” said the blog. “Our researchers could do the same even when a user was is in the middle of a voice call… Of course, a video also contains sound. It was interesting to prove that a video could be initiated during a voice call. We could easily record the receiver’s voice during the call and we could record the caller’s voice as well.”

Samsung smartphone recovery overshadowed by semiconductor gloom

Samsung’s Q3 2019 numbers show improved performance in the smartphone business, but the semiconductor sector remains weak, which contributed to the 56% decrease in corporate level operating profit.

Overall the company has delivered sequential improvement over Q2. Total revenues stood at KRW 62 trillion ($53 billion), representing a 10% QoQ improvement despite being 5% lower than the same quarter a year ago. The corporate level operating profit of KRW 7.78 trillion ($6.7 billion) was 56% lower than a year ago, albeit registering a growth of 18% over the previous quarter.

The IT & Mobile communications group, which includes the smartphone and mobile network businesses, now the biggest revenue generator of the company, delivered the strongest recovery. Total income from mobile handsets, predominantly smartphones, amounted to KRW 28.1 trillion ($24 billion), a 17% increase over a year ago, and 16% over last quarter.

More impressive was the profit growth: operating profit at the business group level grew by 31.5% year-on-year, and 87% quarter-on-quarter. The company attributed the profit improvement to “a product mix improvement and cost reduction after a lineup transition” including contributing from the new phablet Note 10 as well as the entry level A series. The “extended technology leadership via launch of Galaxy Fold and additional 5G models” also helped. At the last IFA show in September Samsung announced it had already shipped 2 million 5G phones and expected the volume to exceed 4 million by the end of 2019. Samsung is believed to have increased its smartphone market share to 21%, retaining the global leadership.

In contrast to the smartphone business’s recovery was the continued depressed performance of the Device Solutions group, which includes the semiconductors and display panel businesses, and is by far Samsung’s biggest profit generator. To illustrate the importance of this group to Samsung’s overall performance, the group level revenue, KRW 26.64 trillion ($23 billion), represented 43% of the company’s total revenue, but the operating profit, KRW 4.24 trillion ($3.6 billion), accounted for 55% of the total operating profit of Samsung Electronics, at a 16% operating margin. In comparison, the IT & Mobile group’s operating margin was at less than 10%.

The memory chip sector was particularly weak, where the revenues went down by 37% from a year ago to reach $13.26 trillion ($11 billion) although it was an 8% improvement from last quarter. The operating profit collapsed to KRW 3.05 trillion ($2.6 billion), a mere 22% of the level a year ago, and also more than 10% drop from an already weak Q2. This indicated increased demand for shipment but at depressed price levels.

Looking at Q4 and 2020, Samsung believes 5G will have a big impact on the company’s performance. It foresees that the profitability of the smartphone business will continue to be a challenge in Q4 “due to weaker mix from dissipating new model effects of Note 10 and increased marketing cost under strong seasonality”. For 2020 this group will “enhance competitiveness throughout entire lineup and by addressing growing 5G demand; strengthen foundation for further sales growth, mainly driven by foldable; expand sales of premium models and optimize operations for low-end to mid-range models to improve profitability.”

For the semiconductor sector, Samsung expects the demand for memory chips to be solid in Q4 as clients are replenishing inventory again, although it does note “uncertainties likely to linger due to issues in the external environment.” The system large-scale integration (S.LSI) business expects growth in “shipments of 5G 1-Chip SoC and 64Mp & 108Mp high-resolution image sensors”.

Global smartphone market returns to growth, driven entirely by Samsung and Huawei

Shipments in the global smartphone industry returned to growth for the first time in two years according to the latest numbers from Strategy Analytics.

A total of 366 million smartphones were shipped in Q3 2019, which is 2% up on the year-ago number. Only two vendors experienced growth themselves, however, with market leader Samsung up 8% and second-placed Huawei up 29%. Huawei has doubled its share of the global smartphone market in the past three years, largely at the expense of the long tail, with once prominent brands like Sony, HTC and Alcatel being swallowed up.

“Samsung shipped 78.2 million smartphones worldwide in Q3 2019, jumping 8 percent annually from 72.3 million units in Q3 2018,” said Neil Mawston of SA. “Samsung has lifted its global smartphone marketshare from 20 percent to 21 percent in the past year. Strong sales of the premium Galaxy Note 10 and mass-market A Series models boosted Samsung’s smartphone shipments and profit during the quarter.

“Huawei once again surprised everyone and grew its global smartphone shipments by an impressive 29 percent annually from 51.8 million during Q3 2018 to 66.7 million in Q3 2019. Huawei captured a record 18 percent global smartphone marketshare in Q3 2019, up sharply from 14 percent a year ago. Huawei surged at home in China during the quarter, as the firm sought to offset regulatory uncertainty in other major regions such as North America and Western Europe.”

That’s an understatement if we compare SA’s global numbers with Canalys’s China ones from yesterday. Canalys has Huawei’s shipments in China alone increasing by 16.5 million units, while SA has its global shipments increasing by 12.5 million. In other words Huawei shipments to everywhere except china decreased by 4 million, which is considerable.

There’s something odd about those Huawei China numbers. To suddenly grab 18 points of market share in such an incredibly competitive market stretches the limits of plausibility. But even if we assume the numbers are legit, Huawei must have made some pretty exceptional business moves to pull them off and we have to question how sustainable they are.