Samsung Note 9 needs to go more mainstream, leverage S Pen to win vs. Apple, Android rivals

Samsung moved up the Galaxy Note 9 launch to bolster sales and get a jump on Apple's iPhone update. More worrisome for Samsung is low-cost Android rivals and maintaining premium prices in the smartphone market.
Written by Larry Dignan, Contributor

Video: What to expect from Samsung Galaxy Note 9

Samsung's Galaxy Note 9 launch will add improved specs, camera updates and additional features as well as potential storage of 1TB, but it's unclear whether the device can win a multi-front battle against Apple as well as lower-priced Android devices.

One thing is certain: Samsung has a lot riding on the Note 9. The company pushed up the launch of the Note 9, which is best known for its S Pen stylus, because sales of its Galaxy 9 were slipping.

In a leaked video from Samsung New Zealand (dutifully copied by AndroidAre), the following Note 9 details have emerged:

  • An "all new powerful S Pen"
  • All-day battery
  • S Pens with various colors
  • 1 TB of memory with 512 GB microSD card

The Note 9 is likely to be a great device (and one widely leaked already). I'm a loyal Note customer but my use cases are decidedly tweener. It's unclear whether the Note 9 is a flagship for the masses, business productivity powerhouse or some combination of both. I happen to need both and like the S Pen. Most folks think I could be a quirky person with a quirky device.

Also: Samsung Galaxy Note 9: Design, features, and everything we know so far | New and upcoming phones: Galaxy Note 9 and others we're expecting in 2018 | Samsung S Pen reflections: A differentiator in a saturated smartphone market

Samsung is going to need the Note 9 to become more of a mass appeal device. Samsung is struggling to hold its premium price for the Note 9 and its Galaxy devices.

Will an S Pen with Bluetooth connectivity and the ability to control the camera and music help the Note 9 go mainstream? Maybe. Will better battery life and a fingerprint sensor moved away from the camera help? Probably not. Preloaded Fortnite from Epic Games on Android may be a small victory if not a selling point.

The common storyline is that Samsung and Apple compete directly in the premium smartphone space, but that narrative isn't exactly true. The two companies are apples and oranges.

Yes, in the premium space Samsung wants to be Apple. Samsung executives during the company's recent earnings conference call talked about new features -- triple cameras on deck -- as well as reasonable pricing. These same execs also talked about how Samsung would market to grow services such as Samsung Pay.

Also: Samsung Galaxy Watch: Rumors, features, price, and release date | Samsung begins taking reservations for the Note 9, will arrive by August 24

A few days after Samsung's quarterly report, Apple dazzled Wall Street and became the first company with a $1 trillion market capitalization. Here's a quick compare and contrast:

Apple's quarter was driven by the iPhone X and average selling prices that held and even gained. CEO Tim Cook noted that the iPhone X was Apple's best-selling device in the quarter.

Samsung's Kyeong-Tae Lee, head of the company's mobile business, said that demand was choppy in the premium smartphone market. He also said that pricing has to be reasonable even as more features are added. "Offering more sophisticated specs throughout our lineup will make it difficult to maintain profitability," he said.

Apple Pay expanded in the June quarter and processed more than 1 billion transactions, said Cook.

Lee said Samsung is still working to monetize Samsung Pay. "We will improve user satisfaction via personalized services and amplify synergies with the services such as Bixby and Samsung Pay, laying the foundation for the monetization of our services business," he said.

Apple's services business has surged. There's no need for Cook comments on services when the numbers tell the tale. June quarter revenue for Apple services was $9.55 billion. In other words, Apple's services unit -- is going to be on a $40 billion annual run rate -- real soon.

But don't cry for Samsung. Samsung also makes chips, screens and other components. Many of these components are sold to Apple.

With the Apple-Samsung storyline partially debunked it's worth outlining another reason why Samsung needs the Note 9 to be huge.

The Android competition is coming out with devices that have increasingly strong specifications, an operating system without bloat and prices that are in some cases half what Samsung charges.

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IDC noted that Huawei, Oppo and Xiaomi are giving both Apple and Samsung fits. But Apple only has to worry about Huawei in China. Samsung has to worry about the whole Android gang in India, China as well as the U.S.

And don't forget Lenovo's Moto devices and Nokia also have strong entries that can compete with Samsung on specs and undercut the company's premium devices.

Also: Galaxy Note 9: All the rumors on specs, price, Aug. 24 sale date and Fortnite game CNET

It's no wonder that Samsung's Lee talks about defending the low-end of the market on price. Samsung doesn't have a choice.

Where can the Note 9 win?

  • Moving the fingerprint sensor may make it less awkward to use. Better yet would be dropping the fingerprint sensor, reader and scanner into the screen.
  • The S Pen is the most differentiating thing on the Note 9. Samsung has to make the S Pen stylus do more than be a writing tool for the device to go mainstream and justify a premium price.
  • Stick to what works. The headphone jack is still handy to most people. It makes sense to keep it. Ditto for the micro SD card.
  • Camera improvements. Samsung has to keep moving the needle on the front-facing camera as well as other camera effects.
  • Battery life. Samsung has teased all-day battery life and has to deliver.
  • Display. Samsung's super AMOLED and AMOLED display is already strong, but the company needs to continue to advance on screen technology to command a premium price.

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