Market Overview

Is Samsung The Next BlackBerry?

Is Samsung The Next BlackBerry?

SAMSUNG ELECT LTD (OTCMKTS:SSNLF) mobile business declined 74 percent in the third quarter, highlighting the company's ongoing struggle at retail. Is this a sign of things to come?

"In their current shape and form, every indication is that Samsung is going to be the next BlackBerry Ltd (NASDAQ: BBRY) and Nokia," Global Equities Research analyst Trip Chowdhry told Benzinga.

IHS Technology (NYSE: IHS) Senior Analyst Daniel Gleeson said that this is a "danger" that Samsung and other manufacturers need to recognize.

"It's something that's not just affecting Samsung," said Gleeson. "If you look at Sony, HTC, LG -- they're all under fierce, incredible pressure just simply to generate profits and to break even. Samsung has a bit more of a cushion than the others, but it's something that affects all of them because they're being pressured at the top-end from Apple, who has now come out with those larger phones."

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Galaxy S6: More Of The Same?

Samsung is reportedly rethinking its strategy for the Galaxy S6, but a new leak suggests that the device might offer more of the same.

The rumored specs include a 5.5-inch 1,440 x 2,560 pixel display, a 64-bit octa-core processor and a 20MP rear camera. This would provide Samsung with a better display than the iPhone 6 Plus (on paper, at least), but the processor may be playing catch up to Apple's A8 chip.

"In terms of the screen size, I think Samsung is probably limited with what it can do [with the S6] because it must leave space above it for the Note, obviously, so it can't get too big," said Gleeson. "I think we're probably at the limit with all of the flagships next year that they won't increase in size massively."

If nothing else, Gleeson expects Samsung to bring the Edge display (featured in the Galaxy Note Edge) to the Galaxy S6.

"In fact, one of our display analysts thinks that it's going to be curved on both edges instead of just one to really make it stand out," Gleeson said of the display. "I think, realistically, that sort of innovation is what Samsung is best at. They're not the best at software. They do have strengths in their display technology. That's definitely one of the things we very strongly think they should be looking at in terms of [product differentiation]."

Specs Are A 'Recipe For Disaster'

Chowdhry warned that Samsung needs more than upgraded specs if it wants to survive.

"Specs, by itself, is a recipe for a disaster," said Chowdhry. "That is the fundamental problem of Samsung. I don't think you can take specs in isolation."

Instead, Chowdhry thinks that Samsung should focus on software -- but not necessarily the OS.

"Everybody is doing Lollipop, so what is unique?" Chowdhry questioned. "What is Samsung's differentiation? Can you remember the last time you went to the store to buy a phone and asked for technical specifications?"

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.

Posted-In: Daniel Gleeson Galaxy S6 IHS IHS Technology Samsung Trip ChowdhryTech Best of Benzinga


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