What you need to know
- Samsung's vice chairman of Samsung Electronics' DS Division, Jeon Young-hyun, issued a rare apology for the company's failure to innovate.
- The release comes after Samsung's most recent phones, the Galaxy Z Fold 6 and Galaxy Z Flip 6, reportedly aren't selling well.
- Additionally, recent reports from International Data Corporation show that Samsung is losing smartphone market share while its competitors are gaining it.
It's rare to see one of the biggest tech companies in the world admit that it's facing a significant problem. Well, that's exactly what Samsung's vice chairman of Samsung Electronics' DS Division, Jeon Young-hyun, did in a press release this week. Young-hyun acknowledged that outsiders are viewing the company's current situation as a "crisis" and vowed to make changes and improvements that will benefit investors, customers, and employees alike.
"To our customers, investors, and employees who have always loved Samsung Electronics, Today, we, the management of Samsung Electronics, would like to first apologize to you," the press release, translated to English, read.
"The performance that fell short of market expectations has raised concerns about the fundamental technological competitiveness and the future of the company. Many people are talking about Samsung’s crisis," the statement continued. "All of this responsibility lies with us who are leading the business."
The past two years haven't gone smoothly for the South Korean tech giant. First, financial results and earnings started to slip in 2023 after encouraging post-pandemic figures. The release of the Samsung Galaxy S24 series didn't seem to markedly improve things, with Samsung losing market share to its competitors throughout 2024.
The turmoil also drew attention to Samsung in less-than-favorable ways. In April 2024, Samsung initiated a six-day workweek for executives to create "a sense of crisis" among the company's leadership team.
Following the criticism of new Galaxy wearables, which many viewed as Apple design knockoffs, it was reported that the Samung MX Division's chairman, Lee Jae-yong, was "angry" at the team's design. Of course, this left us wondering why a Samsung chairman was only finding about the products' designs after they released.
That leads us to now, when Young-hyun is publicly apologizing for the company's lack of innovation.
"Samsung has a history of challenge, innovation, and overcoming that has always turned crises into opportunities. We will definitely make the serious situation we are currently facing into an opportunity for a leap forward," the statement read.
"Above all, we will restore the fundamental competitiveness of technology. Technology and quality are our lifeblood," Young-hyun wrote. "It is Samsung Electronics’ pride that we can never compromise on. Rather than short-term solutions, we will secure fundamental competitiveness."
Despite Samsung's efforts in April 2024 to rectify things, the so-called "crisis" seems to be getting worse before it gets better. The newly-launched Samsung Galaxy Z Fold 6 sold less than 300,000 units in its first two weeks of availability, according to leaker Ice Universe on X (formerly Twitter), who has a solid track record. That's fewer units than the Galaxy Z Fold 5 sold last year, per the report, and seemingly continues Samsung's regression.
Samsung Galaxy Z Fold6 is worse than Fold5... It seems that AI alone cannot save Samsung.Globally, only 270,000 units were sold in the first two weeks.August 28, 2024
Official estimations from International Data Corporation (IDC) confirm that Samsung has lost smartphone market share as of Q2 2024 compared to the same quarter in 2023. IDC reports that although Samsung moved over 53 million smartphone units in the second quarter, its market share dipped to 18.4 percent — down from 20 percent at the same point last year. Meanwhile, competitors Xiaomi and Vivo expanded their market share year-over-year.
For what it's worth, Samsung did ship more phones in Q2 2024 than anyone else. However, it might not be a coincidence that Xiaomi and Vivo — which are both pushing the boundaries of smartphone technology outside North America — are gaining on Samsung as it, by its own admissions, isn't innovating like it should be.
All the ways Samsung has stagnated with recent releases
As someone who has closely followed Samsung product launches and financial results for the past few years, it's not particularly surprising to me that sales are suffering. The company is releasing new devices, but they're not pushing the boundaries in a competitive smartphone market.
Take the standard Galaxy S24, which still packs the same camera system as the Galaxy S22. There's no reason we should be going three generations between camera upgrades. That's especially true while Apple and Google continue improving the camera systems on their base-model flagships. In all, the Galaxy S24's best feature was arguably Galaxy AI, which made its way to the Galaxy S23 series eventually.
The worst offender is the Galaxy Z Fold 6, which shares the same rear main camera as the base Galaxy S24. That's despite the fact that the Galaxy Z Fold 6 costs over $1,000 more than the Galaxy S24 — and that it's really the same camera sensor as the nearly three-year-old Galaxy S22. I've spent weeks with the Galaxy Z Fold 6 and the Google Pixel 9 Pro, and it's Google's foldable that feels more innovative and exciting. There's no doubt about it.
It's hard to accept Samsung's apology as a reporter and reviewer that's closely followed the company's incremental updates for years, and watched brands like Pixel, OnePlus, Oppo, Vivo, Xiaomi, and Honor trounce Samsung in terms of innovation. With that being said, it takes courage to acknowledge the elephant in the room, especially if you're a company as large as Samsung. Here's to hoping things improve starting with the upcoming Galaxy S25 series next year.
