Many have tried and all of them have failed. This is the short story of every Chinese manufacturer that has set its sights on Samsung's utter dominance of the Android smartphone market. The Korean conglomerate has faced intense competition from its Chinese rivals, particularly in lucrative markets across Asia. However, Samsung adapted to the challenging market conditions and came out stronger.
We've seen Samsung revamp its entire device lineup over the past few years. Many low-end lineups were consolidated. The Galaxy M series became the torchbearer for its budget lineup. The Galaxy A series became seriously competitive in both specs and price. Samsung's flagships have always been a class apart. It just raised the bar even higher with flagship smartphones.
There are a couple of reasons why Chinese OEMs like Vivo, Xiaomi, Huawei, ZTE, etc were able to steal market share initially. They opted for an aggressive pricing approach. These companies were willing to reduce margins or even sell devices at a loss to gain market share. It's a common approach that tech companies take. They also spent heavily on marketing to generate as much buzz for their brands as possible.
The strategy did work to an extent but then there was a shift in the market that perhaps even the manufacturers themselves couldn't have predicted. For example, the United States was always a difficult regulatory market for Chinese smartphone manufacturers to crack. When it seemed that perhaps it would finally be open for them, the geopolitical tensions that resulted in the banhammer being dropped on Huawei and ZTE made it clear that the US wouldn't particularly be welcoming.
The US has also been pushing its allies in the West and beyond to adopt a tougher stance on China. The endless rumors and debates about the links of these companies to the Chinese government and concerns about data security are turning people away. They're not as willing to use a device from one of these manufacturers as they were in the past.
Their loss has been Samsung's gain. The company has capitalized on this opportunity to increase its market share but there may yet be an assassin out there with its sights set on Samsung's market share. It's one that most people would least expect, but it certainly has the potential to become a headache for Samsung.
Google's Pixel series is gradually creating a niche for itself. It has a few things going for it. As far as brand recognition goes, there's nothing as universal as the Google brand, so much so that even searching for something online is commonly called “Googling.” The company is tapping into that, running ads on YouTube that start with “Did you know Google makes a phone?”
The Pixel has been positioned as the perfect representation of an Android device. The software is at the heart of the user experience, the obvious advantage here being that Google owns Android and thus better optimize the OS for its hardware. The company has also been building its own chips for Pixel devices, a move that's meant to reassure customers that it's in this for the long haul.
Granted, the Pixel series has a long way to go before it can begin to ship in the volumes that can match let alone exceed what Samsung does. Yet, that doesn't make the threat any less potent. Complacency is what kills incumbents. Remember when the iPhone first came out and senior BlackBerry execs fooled themselves into thinking that nobody would buy a phone without a keyboard? The former is now one of the most sought-after devices and the latter doesn't exist anymore as a smartphone company.
That's got to be concerning for Samsung, particularly since it relies on Google for the Android operating system. If the Pixel emerges as a strong competitor for Samsung, that may also put pressure on its relationship with Google, which has so far been titled in Samsung's favor due to its position as the leading Android device vendor.
This shift in the market could end up making Google the Samsung killer that nobody expected, particularly if the Pixel lineup is expanded in the years to come. There are already rumors about a foldable Pixel smartphone in the works. Customers in the West who don't want to buy a phone from a Chinese OEM may come to see the Pixel as a viable alternative.
The decision may become as simple as if someone doesn't want to buy a Samsung, they buy a Pixel. Samsung needs to prepare itself for this eventuality if it wants to retain its dominant position.
