Is Samsung The New Dell?

Gregg Keizer:

Dell last week again blamed Windows 8 for contributing to a decline in PC sales revenue during the quarter that ended May 3. "Windows 8 has been, from our standpoint, not necessarily the catalyst to drive accelerated growth that we had hoped it would be," said Brian Gladden, Dell's CFO, in a call last week with Wall Street analysts to discuss the quarter's financials. Gladden's convoluted syntax aside, this was the second time that Dell pushed Windows 8 under the bus.

Yes, I am sure that Windows 8 hasn't helped Dell at all, but what has Dell done to help Dell? Dell is paying the price for not following the Tim Cook doctrine (The need to own and control the primary technologies behind the products you make). They relied on Microsoft for years to function. It was a nice system for a long time. Dell churned out mediocre PCs running an OS that someone else had to deal with.

At the same time, he also dashed cold water on the near future. "But you look at the recent external data from any of the third-party sources, we would expect to continue to see over the next few quarters year-over-year declines in PC demand," Gladden said, referring to projections by the likes of IDC and Gartner that PC shipments -- and thus sales -- would continue to suffer as consumers and businesses alike buy smartphones and tablets rather than new personal computers.

When you don't own the OS, you will be reliant on someone else to drive innovation. There is only so far hardware can take you. If the OS fails to innovate, there will be less demand for your hardware.

Let's rewrite the above excerpts, but change Dell to Samsung and Windows to Android.

Samsung last week again blamed Android 14 for contributing to a decline in smartphone and tablet sales revenue during the quarter that ended May 3. "Android 14 has been, from our standpoint, not necessarily the catalyst to drive accelerated growth that we had hoped it would be," said Ju-Hwa Yoon, Samsung's CFO, in a call last week with Wall Street analysts to discuss the quarter's financials. Yoon convoluted syntax aside, this was the second time that Samsung pushed Android 14 under the bus.

At the same time, he also dashed cold water on the near future. "But you look at the recent external data from any of the third-party sources, we would expect to continue to see over the next few quarters year-over-year declines in smartphone and tablet demand," Yoon said, referring to projections by the likes of IDC and Gartner that tablet and smartphone shipments -- and thus sales -- would continue to suffer as consumers and businesses alike buy (insert future product category) rather than new smartphones and tablets

Samsung is enjoying a nice ride currently. Google is doing the heavy lighting (making an OS is a really difficult project) and Samsung is reaping the rewards. What are its alternatives if Google fails to innovate in the coming years or moves on to a different product category? Just as Dell has struggled to make software on its on PCs (everyone who knows how immediately uninstalls it), Samsung hasn't proven itself any better. If Samsung can't seem to write decent software, why would we expect more from an OS they might create.

It's quite possible that in 2023, Samsung will be in the same situation that Dell is in today (stuck in a declining industry with no way out).