Samsung Ativ S: A Missed Opportunity?

Posted: February 3, 2014 in Mobile Phones & Tablets

The Samsung Ativ S. A phone that had the potential to be a game changer. For a start it was pretty much a Samsung Galaxy S3 in terms of hardware and looks. They both had a 4.8″ HD screen, they both had a 1.9MP front and 8MP rear camera, they both had a MicroSD memory card slot for expandable storage and both had the same build materials. Even in the design they were very similar with only where the camera and back button is located (due to the different operating systems) being the biggest difference. However, this wasn’t a bad thing. The S3 was the best selling phone in 2012 and had award-winning specifications that are still impressive today. Also the Ativ S was the 1st phone to be announced with Microsoft’s new Windows Phone 8 software back in August 2012. WP8 was a complete overhaul on WP7 and was designed to work with not only much more powerful phones like the Ativ S but also have a better correlation with other Microsoft services like Windows 8 for PC’s, Office, Skype and Xbox. This gave Samsung a head start on rivals HTC and Nokia with the aim to become the best selling Windows Phone manufacturer.

It would look like Samsung wanted complete mobile domination by becoming the market leader on all software types that’s available (iOS and BlackBerry 10 are only available to their respective owners). It overtook HTC in 2010 to be the biggest smartphone manufacturer for Android even though HTC was one of the founders of the operating system and it looked to do the same with Windows Phone. However 18 months after it was unveiled, even with brand new software and the internals of a phone that sold over 50 million worldwide, the Ativ S failed to capitalise. When interviewed in March 2013, Samsung’s mobile chief J.K. Chin even said that;

Smartphones and tablets based on Microsoft’s Windows operating system aren’t selling very well. There is a preference in the market for Android. In Europe, we’re also seeing lackluster demand for Windows-based products

As a result, as of January 2014 Samsung’s market share on the WP8 platform stands at 1.5% – at the end of November 2012 it was at 9%. Also with only 1 handset released so far on WP8, you could even question whether they were committed to the Windows Phone  platform throughout 2013 – they already pulled the plug on Windows RT tablets (before Microsoft themselves discontinued it). So what went wrong?

1) Promotion Problems

No matter how good a product or service is, if no-one has heard of it then it will not get notice and therefore won’t sell. Samsung is famous for its Galaxy series and use of Android but the same cannot be said for the Ativ series and use of Windows Phone software. During 2012 and 2013 it was very aggressive in its promotion of Galaxy mobile phones, even comparing its headsets to Apple’s iPhone. With the release of the iPhone 5 back in 2012, Samsung released a number of posters and videos mocking Apple and its customers with captions such as “it doesn’t take a genius” and making it seem that choosing between the iPhone and Galaxy headsets was a no-brainer.  This continued into the next year with Samsung even going as far as making the iPhone seem “they make you suffer terribly” with more advertisements for the successor to the S3 – the S4.

 

Samsung was very aggressive against its competition

Samsung was very aggressive against its competition

In 2013, Samsung was reported to have spent $14bn on just advertising and marketing (£8.52bn) – which is 5.4% of its annual revenue generated (compared to Apple’s 0.6%). $4.3bn (£2.62bn) was spent on ads alone but despite all this cost on promotion, there was hardly any ads at all on Samsung’s only WP8 phone to date compared to its Android-powered siblings after it was unveiled at the IFA 2012. Only those with a genuine interest in mobile phone technology would have any idea what the Ativ S is which resulted in these poor sales.

2) Operator Obstacles

Even though Samsung is the world’s biggest manufacturer from 2012 onwards, its first WP8 phone failed to attract all the main mobile network operators in the UK.  When it was in stores in early 2013 it was only available on O2 and Vodafone at launch. The other big operators EE and 3 never sold the Ativ S on a contract when it was released which made things more difficult for Samsung. In February 2013, EE and 3 had over half the 3G mobile spectrum of 57% – 39% and 18% respectively. What makes matters worse is that the remaining 43% from O2 and Vodafone (20% and 23% respectively) included the MVNO’s (Mobile Virtual Network Operator) Tesco Mobile and Giffgaff and the MVNO’s did not sell the Ativ S on their own networks. Also since thiss only for the 3G mobile spectrum, it didn’t include those who had already switched to EE and its 4G services which launched 5 months previously.  Bearing all this in mind it shows that where was a very limited amount of people could get your hands on the Ativ S. Of course, those who really wanted the handset without switching networks could always buy it sim-free, but with a cost of over £400 at launch it wasn’t cheap. With limited availability for the phone this further restricted Samsung and resulted in these poor sales.

 
3) Substandard Software

Although Windows Phone 8 is fairly praised by reviewers, it still has a long way to go if Microsoft wants to make the current two-way battle (Apple’s iOS vs. Google’s Android) into a three-way war. By the end of 2013, iOS and Android have a combined total of 87.1% of all the operating systems in Europe – which is nearly 7 in 8 phones on the continent. Windows Phone is only 10.3% and not increasing at the same rate as it was previously. One of the main issues why the WP8 OS is only 10% and not going up is the lack of applications at the marketplace. For example, popular apps such as BBM (BlackBerry Messenger) is still missing – BlackBerry said there’s a lack of consumer demand even though it’s the 5th most requested suggestion for Windows Phone. Also the photo-sharing network Instagram didn’t have an official app on the Windows Phone market until 2 years after the Android version and as of 02/02/2014 it still doesn’t have all the features. The only advantage Windows Phones have in terms of apps is Microsoft Office built in, rather than an app that requires an subscription. The problem is those who would want to view, edit and save their documents on the go already have alternatives from Apple and Google for their iOS and Android handsets.

Instagram for Windows Phone is still a work in progress

Instagram for Windows Phone is still a working progress

If the Ativ S was marketed as a mid-range or a budget phone then this wouldn’t be such an issue. Judging from their raw data, Adduplex reports that 1 in 3 phones on the Windows Phone software is a Nokia Lumia 520 (and 521) – at 34.6%, and the Nokia is marketed as a budget phone priced at around £100. As stated earlier in the article, the Ativ S was £400 at launch because it was marketed as a premium phone since it shared the same internals of a Galaxy S3. WP8 didn’t have the premium apps and features that most users would expect with a phone of this price which resulted in poor sales.

Are Samsung Going To Try Again?

A lot has changed since the Ativ S was unveiled 18 months ago. As stated earlier, the market share has risen to 10% and more apps are being added to the marketplace all the time. Recent additions include a new Three app and a new Barclays Mobile Banking app. This might of persuaded Samsung to try again to break into the Windows Phone market. There’s been reports that there’s a successor to the Ativ S to be announced later in 2014. Though not confirmed, the report says that Microsoft’s Internet Explorer will be the default internet browser which is a massive clue. Other reports suggests that it will share specifications as the upcoming Galaxy s5 – similar to how the Ativ S was to the S3 with a 5″ Full HD display and 4G LTE support. If this turns out to be true, let’s just hope it doesn’t fail like the Ativ S did…

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