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Samsung continues to slip as businesses favor Apple iPhone

Businesses haven't warmed to Samsung devices and the company saw its global smartphone market share dip further despite the Galaxy S6 launch.

Samsung's launch of the Galaxy S6 failed to turnaround the company's ailing smartphone segment as analysts say businesses continue to favor Apple over Android. The Korean conglomerate's global smartphone market share dipped 5.3% in Q2 of this year, according to research firm Gartner, Inc., after launching its flagship smartphone in early April.

"The Galaxy S6 did not live up to their expectations as the [sales] numbers are even lower than the Galaxy S5, so that was a disappointment," said Anshul Gupta, research director at Gartner. "It wasn't adding any significant value to the end-users."

The Galaxy S6 featured Samsung's new edge screen that is curved around the side of the device, allowing users to view notifications, frequently used apps and stock tickers. These features aren't enough to differentiate the phone from the rest of the market or the S5, Gupta said. He emphasized that the lack of innovation for the S6 greatly impacted its sales numbers.

"There was no additional value," he said. "That is really important. That is where the Samsung Galaxy S6 really failed to get users to go for this device."

Samsung, which is still the leader in global smartphone market share, shipped over 72 million phones worldwide in the June-quarter for nearly 22% of the worldwide market, down from more than 76.1 million shipments and 26.2% of the market in the year-ago quarter. To put these numbers in perspective, Samsung's market share in Q3 of 2013 was 32.1%, according to Gartner, when the company shipped more than 80.3 million units.

If Samsung were serious about work, they'd have a line of PCs for work.
Patrick MoorheadPresident and Principal Analyst, Moor Insights & Strategy

Samsung is not gaining any presence in the corporate markets as the fragmentation of Android "scares" IT departments from a security perspective, according to Patrick Moorhead, president and principal analyst of Austin, Texas-based research firm, Moor Insights & Strategy.

"It makes it more difficult to manage security and deployment versus iOS, which is not fragmented and keeps getting more secure," he said. "That has impacted Samsung in a big way. While Apple doesn't have a reputation of being a big driver in the enterprise, Samsung has even less. In the eyes of IT, Samsung is not a robust and secure device for the enterprise."

Macs have been in enterprises for decades, Moorhead added. Even though it's a smaller percentage than Windows, Mac OS is still the number-two PC operating system in terms of market share.

"If Samsung were serious about work, they'd have a line of PCs for work," he said. "It's hard to address the enterprise with a point product."

In late July, Samsung reported its Q2 profits fell for the seventh consecutive quarter. The company said its mobile segment saw a 7.3% decline in revenue, largely due to "quite muted" sales of the Galaxy S6.

Last December, Samsung fired several high-ranking executives of its mobile division, including both senior and executive vice presidents, after a down year of mobile sales. This is a year where Samsung launched multiple high-end smartphones, including the Galaxy S5 and the Galaxy Note 4 and Note Edge.

"Samsung was really living off the advantage of having larger screens than Apple," Moorhead said. "Apple came out with the larger screen iPhones, and it made the Galaxy phones less unique and less differentiated. The features that Samsung said made the S6 more unique were not as great as they thought."

As for Samsung's main competitor, Apple's market share soared 36% in Q2, according to Gartner, as it is still benefiting from the September launch of the iPhone 6 and iPhone 6 Plus. The Cupertino, Calif. company shipped over 48 million units in Q2, good for 14.6% of the global market, up from over 35.3 million units in the year-ago quarter, when it had a 12.2% share.

"The iPhone 6 really brought value as it was the first time an iPhone had a larger screen [than Samsung]," said Gupta of Gartner. "It attracted existing iPhone users to upgrade from previous models, as well as Android users who were using Android for the larger screens."

Gartner says the smartphone market overall continued to grow globally in Q2, with over 329.67 million units shipped, up 13.5% from over 290.38 million in the year-ago quarter.

Ramin is a News Writer for TechTarget covering the ever-growing mobile enterprise space. His background consists of reporting on IT news, including mobile and channel news. He got his start as local news and sports reporter for a daily paper out of college.

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