The signs for Samsung Electronics' mobile division are not good: Five quarters of profit decline coupled with a two-thirds fall in its yearly profit and decreasing market share finally took its toll last week as the company enacted a salary freeze; not exactly the move of a company on the rise.
The Korean giant is feeling the heat on two fronts -- from above, with the highly successful iPhone 6 family and the arrival of the Apple Watch, and from below, with pressure with most major Android handset manufacturers upping their shipments over the past year. In this atmosphere of intense competition, it is an extraordinary situation where the biggest player in terms of mobile handsets shipped is requiring its employees to forgo a bump in pay, and making its executives return a quarter of their bonuses, all while the company is yet to record a loss.
Carrying the fortunes of the company is its new line of products unveiled at Mobile World Congress in Barcelona, and, in particular, the sixth addition to its Galaxy line: The S6 and S6 Edge.
Mobile world congress 2016
Only a couple of years ago, the launch of a new pair of the flagship Galaxy devices would have had many gadget fans' mouths watering at the prospect -- but those were the days of Apple and Samsung racing to be more "retina" than the other, and Samsung was taking advantage of being the first company to really put its weight behind handset screen sizes that at the time seemed ridiculous.
Nowadays, the industry has caught up to what Samsung was offering.
While its displays are hardly a differentiator any longer, thankfully for the company, its semiconductor division has continued plugging away, increasing its profits, and may have a few hardware tricks up its sleeve.
But taking full advantage of any new hardware is problematic, as Samsung is hampered by the cadence of Android. Whereas Apple is able to create software features to simultaneously take advantage of hardware advances, beyond simply having the handset run faster, Samsung needs to brew up its own software and shoehorn it into the operating system. And history has shown that when it comes to software, Samsung is far from the greatest executioner: Its TouchWiz customisations were often more hindrance than help, and the operating system that it does have full control of, Tizen, is sidelined into lower-performance handsets and wearables.
With Samsung moving away from many of its speciality customisations, apps, and content stores on Android, coupled with the S6 line being without an SD card slot and a removable battery -- two features that Samsung was renowned for -- it raises the question of what it is exactly that Samsung thinks it offers.
Even compared to its Android competitors, there are phones that are better looking, phones that are better built, phones that run a better take on Android, phones that have better cameras, and phones that cost less.
In response to its falling fortunes, Samsung seems to believe that the solutions to its woes are metal casing, ditching its waterproofing process, and moving to a display that has curves on its vertical edges. Samsung will be crossing its fingers that it is ushering in a new era and shape in displays, rather than a gimmick to win back customers.
To get an idea of how Samsung will fare over the next year, keep an eye this week on the Chinese handset makers: Lenovo/Motorola, Xiaomi, and Huawei.
A couple of years ago, China was providing a fertile hunting ground for the Korean giant, but the rise of local players has really hit it hard, as Samsung has had to accept a dose of its own medicine. If the Chinese manufacturers are able to provide good enough competition, it's going to become even harder for Samsung to compete and stay on top.
Not to mention how much more difficult it will be for Samsung if Chinese companies overtake it, as Huawei's new smartwatch over the weekend showed they are certainly more than capable of.
Over recent years, it's been possible for casual observers to interchangeably use Samsung and Android as bywords for each other, and if Samsung wants to remain the vanguard of non-Apple handsets, it needs to provide features above and beyond those of its cheaper competition.
Unless Samsung has been able to keep a warren of rabbits in a spare hat that it didn't show us this weekend, it looks like 2015 will continue to see Samsung fall back to the field. And if one of the Chinese manufacturers can crack it big outside of mainland China, then Samsung mobile's star may fall as swiftly as it rose.
Previously on Monday Morning Opener: