Smartphone Wars: Why Is Samsung Losing Momentum?

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Sept. 3 (Bloomberg) –- Applico CEO Alex Moazed discusses why consumers are souring on Samsung. He speaks on “Market Makers.” (Source: Bloomberg)

Disney.

Let's try to answer that question again.

What is it that samsung is doing wrong?

Not only do they not make as much money on their phones, they are having trouble maintaining the momentum that they once had as apple's archrival in the business.

When you look at samsung versus an apple, it's very difficult to compare the two because apple is really a platform business where they cell phones but they also own the software which is facilitating that connection between developers and consumers.

Samsung is a linear business.

They have been selling a lot of their hardware.

They don't actually own the platform business.

They are a component of the ecosystem rather than being an owner.

Was that apple's secret genius?

They made us believe they were a consumer device company.

Remember the beauty of design, ease of use?

The genius is in the software.

That is really how they have asserted their dominance in a way.

[indiscernible] it is google who snookered samsung.

That's a very good point.

With apple, the software doesn't matter unless you build a great first product.

Apple will never get to the point where they get developers making apps for apple software unless they make a really awesome phone and sell millions of those first year and a half.

If samsung were beat -- were to be successful with the new watch, they have to sell millions of those watches if they're going to get developers interested in developing.

That's very difficult.

You worked with pre-launched samsung and galaxy gear before.

Does it seem premature to be putting these new products out before we can get our hands on them?

I think there is a lot of posturing that goes on in the industry.

There's a lot of money at stake here.

Samsung doesn't want to seem as if it is playing second fiddle to apple.

They still want to be top of mind.

We are talking about them today.

That's true.

However, there isn't much more meat after that.

There isn't much more action you can then take if you want to go by it -- buy it.

Putting yourself out there and not being able to deliver, isn't there a potential downside that you should have stayed quiet until you had the product to begin with?

Uh, yes.

You get out in front with what?

Are you going to want to talk about them when they officially launch?

Maybe the interest will be more tapered because they have started to announce things prematurely.

Now it has become clear that the platform companies, the apples and googles rama google play store, where all the intelligence resides and the power resides, the ability to use the data you harvest from consumer transactions and plain old actions.

What does that mean for a samsung?

That means they are in a position which is highly commoditized.

A lot of people can go and make hardware for smartphones.

There are probably 10 other oem's in a position.

They have become the dell or the hp of the mobile phone world.

It's hard.

They have to continue to innovate with hardware.

That is an extremely difficult position to be in.

I give them credit that they are trying to move in this direction.

They are trying to launch software in an operating system contained within this new watch of theirs.

It is a very difficult path to go down, particularly the utility you may get out of a standalone watch.

Is that really going to sell millions of watches?

It's going to be tough.

I remember when samsung had its own operating system and it wasn't so great.

I remember symbian.

And where's that?

Gone, right?

Steven e lob had a great quote when nokia was really tanking.

He said, we were not just to be to buy products or phones.

We were beat by an entire ecosystem.

They had this burning platform speech of his, this memo that leaked.

He said, we are being defeated by an ecosystem here.

It's not just one phone.

People have come at them with a whole ecosystem that is on apple or google's android.

If samsung goes down this fast, that is what they have to do is engender their own ecosystem with a watch as the central focal point.

What kind of undertaking is that?

That is an undertaking that you can count on one hand the number of companies that have successfully transitioned from hardware.

A partnership with jay-z ain't going to make that happen.

From a consumer's point of view, we want more than two platforms.

We want more than iowa son android.

Who will be there for us?

Facebook is looking at this.

Amazon would probably be a great example of someone who has taken android, branched it and made it their own.

The fire and their new phone -- we have heard a lot about that.

They are a great example of someone who spent years and hundreds of millions of dollars.

They have had to make their own google maps because they can't use google maps from android.

That alone meant they had to license all the map data from nokia.

Totally cheap.

I will give them credit for trying.

That's great.

People should be trying to move in that direction.

I'm giving them an a for effort.

I'm not going to hate on nike for trying out the [indiscernible] they are winning at everything else.

Alex, so good to have you on.

Alex moazed, ceo of applico.

Coming up, home depot will not be the last big company

This text has been automatically generated. It may not be 100% accurate.

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