Samsung makes a lot of different phones, almost all of them functionally identical Android devices with slight differences. Now, according to remarks made by Samsung head of investor relations Robert Yi reported by the Wall Street Journal, it’s planning to cut its list of current devices by at least a quarter.
Samsung’s shotgun approach to phone development has worked in the past as the Korean giant became the world’s number one mobile phone maker. But it also introduces inventory risk and consumer confusion: After all, what are the salient differences between the Galaxy S5 and the Galaxy S5 Active and the Galaxy Note 4 and the Galaxy Alpha — all high-end devices currently sold in the United States market?
Go overseas or into a less expensive bracket and Samsung’s roster becomes even more muddled, with devices like the Galaxy Mega line and the Galaxy W. For its home market of Korea, Samsung makes flip phones for the elderly as well as supercharged versions of its flagships specifically to take advantage of minor improvements in telecom technology. And what happens when [company]Samsung[/company] has extra crates of a phone that didn’t end up selling particularly well?
Samsung’s bottom line has been taking a beating recently — although its mobile division is still profitable, in the most recent earnings report, profits fell 74 percent from the year-ago quarter. And Chinese companies like Xiaomi (which is now worth $40-$50 billion) are garnering a ton of low-end device sales in Asia. So it’s time for Samsung to change.
Samsung’s earnings have been disappointing because the company has been racing to the bottom, competing with other companies to produce Android phones that are ultimately commodities and killing margins. Will a smaller number of planned devices change that? Maybe, but Samsung must make sure that it’s cutting generic Android devices that can be made by multiple factories in Shenzhen, China, and not innovative products that other companies can’t produce yet — like the Galaxy Note Edge with its audacious curved screen, or the Galaxy Gear, a smartwatch that can make calls.