All handset makers are facing challenges in today's volatile market. FierceWireless associate editor Phil Goldstein recently talked with Omar Khan, Samsung's senior vice president of strategy, about the company's inroads in North America, the latest in phone features and what he thinks will be the key factors to staying competitive in 2009.
FierceWireless: Samsung reportedly passed Motorola as the top U.S. handset maker in terms of market share in third quarter. What steps is Samsung taking to maintain that position?
Khan: I think there are a few facets to the answer. We don't specifically claim No.1. in terms of our press releases, we go by third party market ratings. I think you're referring to both Gartner and Strategy Analytics. Those firms rated us No. 1 in terms of both sell-in and sell-through in Q3 of last year. So we obviously endorsed those studies and we appreciate them recognizing us as No. 1.
Our strategy was to sense the market in terms of where it was going from a segmentation perspective and reacting to it with the right handsets with the right capability, in terms of hardware and in software that enabled those experiences on those devices.
One example is the QWERTY devices that we introduced that enabled mass adoption of messaging. Our core strategy is to understand what consumer experiences are going to drive widespread adoption and cause consumers to want to replace their handsets. Eighty-six percent of the U.S. market is replacement at this point, based on a compilation of third party data. In order for us to convince a consumer to come in we've got to understand experiences we want to enable on those devices. And so for us to figure out what it is that's compelling for a user to come in both from a hardware and a UI, user experience, application and service perspective, that's really the work that Samsung is going into.
FierceWireless: What kind of features will be emphasized in 2009 that weren't as heavily emphasized in 2008, or will be continued from 2008 into 2009?
Khan: We like to think that the touchscreen really took off when we introduced the Instinct in June 2008 and Apple continued the momentum. [Laughter] That's sort of the way we try to think about it here. Obviously, we have to give them credit where credit is due. [Apple has] done a great job of popularizing the touchscreen. We've got a bunch of touchscreen devices out there that we launched in 2008, starting with Instinct, with Behold, with Eternity, with Delve, and obviously we had Glide out there that we launched Verizon, and Omnia, so we've got a very rich portfolio of touchscreen devices. We see the experiences that have been popularized in some of our high-end devices, specifically touch and messaging, really coming down into mass, approachable tiers, where the average consumer and the entry consumer can really afford to buy those handsets.
People talk a lot about social networking. It's very complex to deliver true social networking. If you are a social networker...you know that in order to do true social networking, the desktop experience or the PC experience is still the ideal social networking experience. You have your IM conversations going on in one corner of your desktop, you've got all of your pictures, your videos, all of your content, and you've got three or four browser screens maybe open. You're on Flickr, you're on YouTube, you're on MySpace, you're on Facebook, and you're creating your stories and uploading them. There's a lot of work being done right now to figure out how you bring that desktop experience that people have really gotten used to in an uncompromised way down to a handset.
I think that we haven't seen that yet. There's Facebook apps, there's MySpace apps, mostly people are updating status, uploading photos, discreet sort of transactions or discreet steps. To create the full experience of being on a trip, being on your vacation, and on your trip back from your hotel to the airport, while you're waiting for your flight, to basically do what you would have done when you got home and sat down on your laptop or your PC back at home, that's what we're trying to figure out how to deliver. And there's a lot of work from a UI perspective, from an applications and back-end service integration perspective that goes into enabling that type of experience.
FierceWireless: You're talking about incorporating the touchscreen experience in mass market devices. Are we talking about price points that are significantly lower than something like the Omnia or the Delve?
Khan: Yes, absolutely. It sort of will bridge between the high end of the feature phone and where touch sort of fits today.
FierceWireless: Is the launch of an Android-based phone on track?
Khan: Obviously, you've seen announcements that talk about Samsung's partnership with the [Open Handset Alliance]. We are an active member of the OHA. Android is under development as one of the operating systems that Samsung supports internally on our devices. We will have Android devices coming out in the U.S. marketplace. But our strategy is to co-announce with our carrier partners. We try not to announce devices too far before they're going to be commercially available. But it's fair to say that Samsung will have Android devices in the U.S. marketplace.
FierceWireless: Is it true that your carrier partners for Android devices will be with Sprint Nextel and T-Mobile USA?
Khan: I can't comment on that, unfortunately. But I'm sure you have many good sources for that information.
FierceWireless: How does Samsung anticipate its relationships with U.S. carriers changing in 2009?
Khan: We don't. Our core values are really supporting our carrier partners' strategy and their services in terms of how they want to go to market. So our strategy is to really collaborate closely on their roadmaps of network services, network enhancements, consumer services, consumer enhancements, marketing, channel strategies. And, from an end-to-end strategy perspective, we try to roll that into our plans and our roadmaps and how we will support those carriers from a handset and from a marketing plan perspective. We believe that we will enhance and expand those relationships here in 2009 based on the close collaboration we have them here in 2009, and even go longer term, if you will.
FierceWireless: Are there any plans right now to develop and launch dual-mode WiMAX-EV-DO devices?
Khan: We have a WiMAX roadmap of devices that span everything from data cards up to MIDs, and obviously everything in between, which includes handsets. We're working with the new Clear to make sure that those devices meet their requirements. We've announced our data card and our UMPC up until now, both of which have been announced as single-mode devices right now. But we do have dual-mode devices on our roadmap as well.
FierceWireless: Motorola is having an incredibly tough time right now. Sony Ericsson and LG just posted losses. Nokia's sales are down. What do you see as the biggest business challenges for Samsung in the U.S. in 2009?
Khan: It's going to be an increasingly competitive market in 2009, given what all of the competition is going through. So we do see increased competition in the U.S. market in 2009. Obviously, consumers and consumer behavior will drive a lot of what actually happens in the U.S. marketplace in 2009.
Right now it's tough for any of us to predict accurately consumer behaviors. If jobless numbers come out, and they're a surprise, or if something happens in the capital markets that's a surprise, I think all of us continue to learn on a daily basis where the marketplace is going. I think our ability to forecast the marketplace for an entire year is going to be severely limited.
So I would say we have to be very nimble. We've identified our core categories of devices that we're going to go after, which includes some of the devices that I've talked to you about, in terms of QWERTY devices, messaging devices, touch devices that really enable our multimedia and information consumption experiences, as well as our smart, open-OS devices. And we will have those devices at every single price point from a consumer tiering perspective at the point of retail. Our goal is to be able to have as many of those bullets in our gun so we can reach in the marketplace to changing consumer needs and demands. It's going to be about flexibility. It's going to be about, how nimble can we be in reaction to where the consumers are going and what they're willing to spend their money on. Anybody who's trying to plan for an entire year right now and lock down their entire strategy, their investment plans and everything of that nature, and then not have the flexibility will be severely limited in 2009. I think the key to competition in 2009 is going to be nimbleness and flexibility.