Samsung realizes it’s making too many phones, will cut lineup by 30% 1

By Ryan Whitwam on November 18, 2014 at 5:22 pm

The world’s largest maker of smartphones just made an unexpected announcement — Samsung says
it’s going to start making fewer phones. Despite how odd that sounds, this “less-is-more” approach
is probably the safest thing Samsung can do in the face of flagging sales. The company says it’s giving
the axe to as much as 30% of its product lineup for next year, and it’s a big lineup. Even with the 30%
reduction, Samsung will probably make a few dozen different phones.

Samsung enjoyed incredible profits quarter after quarter until earlier this year. In a quarter when it
should have been raking in the dough from sales of the just-released Galaxy S5, its profits actually
decreased, a trend that has since continued. When consumers couldn’t get enough of its devices,
Samsung could afford to make a different phone for every niche, but now? That’d be foolish.

This plan to reduce the number of device it makes is how Samsung intends to stay on top as Chinese
Android OEMs continue their rise. Companies like Huawei, ZTE, and Lenovo have started making
more desirable phones and pushing outside of their traditional Asian markets. In fact, Lenovo just
completed its purchase of Motorola, which is making some of the best Android phones you can get.
That has to make Samsung nervous.

Samsung’s decision to pare down its device offerings mirrors the actions of another Android OEM —
HTC. After taking an early and commanding lead in the Android device ecosystem, HTC fell upon
hard times when it started making too many phones, most of which were mediocre. HTC cut things
down drastically to just a handful of models each year, which has allowed it to focus on reducing
costs and remain afloat. It’s not clear sailing for HTC just yet, and that’s probably the scenario
Samsung wants to avoid by pivoting now. Basically, Samsung doesn’t want to end up like HTC, just
scraping by after being overtaken by the competition.

So far in 2014, Samsung has released 56 smartphones. Some of these you will have heard of like the
Galaxy S5, Galaxy Note 4, and the Galaxy Alpha. But have you ever heard of the Samsung Galaxy Star
2 Plus or the Galaxy Ace Style LTE? Of course not — no one has. The only people who might know
the name of those phones are the engineers who designed them and the handful of people who
bought one because it was cheap.

It’s not just the low end that needs trimming. A niche device like the Galaxy K Zoom is not cheap to
make, but goes against the trends in mobile — and why six different versions of the Galaxy S5?
Samsung spent time and money designing and sourcing parts for phones like these that didn’t have
much of an impact, so why bother? A few entry level devices based on the Galaxy S line would do
the job more cheaply. By working to standardize its internal design and, the company hopes to
reduce its costs even more with better control of its supply chain.

This change in direction won’t mean much for you in the short term. There’s still going to be a
Galaxy S6 and Note 5. If there is a drawback to this, it might be that Samsung won’t take as many
risks with seemingly weird devices. The first Galaxy Note was seen as a wild shot in the dark at the
time, but now Note devices are hugely popular. We can only hope Samsung doesn’t “less-is-more”
itself into obsolescence.

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