Here’s How Google’s Pixel Can Benefit From Samsung’s Reputation Loss
As Samsung’s engineers worked overtime to identify the cause behind its exploding Note 7 smartphones, their inability to replicate the explosions in a controlled environment led to the scrapping of the model. Samsung’s announcement that it would stop production of the Galaxy Note 7 could not have come at a better time for Alphabet’s (NASDAQ:GOOG, GOOGL) subsidiary Google. Its newly launched smartphone “Pixel” just lost a major competitor. (Read What Does Google Aim To Accomplish With The Pixel?). Furthermore, a recent survey revealed that 40% of Samsung smartphone owners (of the survey population of 1,000) would not buy another device from the manufacturers, after the recent Note 7 fiasco, impacting its reputation negatively. While Pixel lacks a standout hardware feature that can differentiate it from rival devices and excite customers, Samsung’s reputation loss can lead to consumers flocking towards the “safer” and faster Pixel. We believe that, since the launch of Pixel coincides with the end of Samsung’s Note 7, Google can get a head start in the smartphone market and gain market share from Samsung.
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Attracting Consumers Can Be Easier, Faster Adaption
As smartphone growth slows down globally, with developed nations reaching a saturation point and growth coming mainly from emerging economies, Google had a tough task to establish its presence in this market given the intense competition and lack of a differentiating feature in its Pixel. Samsung is the leading player in this segment with a nearly 23% market share in Q2 2016, ahead of Apple’s 12%. Its Galaxy S7 and Galaxy S7 edge devices are a key to its leading market share. However, with the Note 7 fiasco, Samsung has suffered significant brand damage, which is no doubt leading consumers to seek alternatives. The launch of Google’s Pixel is timely as it competes directly with Samsung’s high end models and can prove to be the right “alternative” for consumers. While it is too early to predict the success of Google’s Pixel, Samsung has definitely made it easier for Google to attract consumers towards its smartphone. The company can market Pixel’s better software compared to Galaxy S7 and its faster processor to attract consumers. Samsung has been in the smartphone market fora long time, but Google’s brand and its unique selling proposition (USP) of integrating a virtual assistant with the smartphone can give it a competitive edge given Samsung’s reputation loss.
We believe the Pixel could be part of Google’s larger strategy to defend its mobile search ad business and create a strong Android alternative to Apple’s iPhone. While Samsung has dominated the Android space, Google’s attempt to improve the overall Android experience with Pixel can now get a larger audience, sooner than anticipated. Samsung’s fiasco has definitely given Google’s Pixel a much better start on which the company can now capitalize and establish itself quickly in the smartphone market
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