Benner on Tech: Samsung's Woes, Bezos' Enemy No. 1, a Hebdo Rant

Katie Benner is a Bloomberg View columnist who writes about technology, innovation, and the cult and culture of Silicon Valley. She lives in San Francisco.
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People are Talking About…

Samsung, the Korean electronics conglomerate, is getting creamed in smartphone sales. Well, relatively creamed. It’s still sells more mobile devices than anyone else; and it still has a huge global marketshare. BUT, it’s not enough phones to boost earnings. The company’s fourth-quarter operating profit fell 37 percent to 5.2 trillion won ($4.7 billion), but still beat analyst estimates. Sales fell about 12 percent to 52 trillion won.

Apple lovers out there will be inclined to chalk up all of this to the newer, bigger iPhones (6 and 6 Plus). The easy narrative is that Cupertino is chipping away at Seoul’s dominance, one oversized smartphone at a time. And, yes, I’m sure that’s part of what’s going on. Piper Jaffray found that businesses rely on iOS and TechCrunch reports that the Android operating system (which is in a symbiotic relationship with Samsung) lost U.S. marketshare for the first time since September 2013, in part due to iPhone 6 and 6 Plus sales.

But there’s more to the story than Apple. Samsung is in the unenviable position of being all things to all people, with handsets at all price points. The real pressure is coming from companies like Xiaomi and LG that are gunning hard for customers that want low and mid-priced phones and are willing to squeeze margins into oblivion. While Apple sits comfortably atop the premium phone food chain, all of the other competitors that Samsung contends with are pounding each other in a price war.

Samsung also knows that a retail presence, especially in markets for luxury goods, has the potential to be a huge boon to sales. But that strategy is coming along slowly and some of Samsung's “experience” stores have shuttered. Its phones and tablets are completely reliant on Google’s Android operating system, which means that the  most important part of the user experience is out of Samsung’s hands.

In the meantime, Samsung is falling back on its traditional component business for growth, according to Bloomberg news. I also wrote about Samsung's travails and its strategic challenges last September. 

Getting back to basics is a good stopgap measure for Samsung now, but it won’t fuel the sort of growth that it enjoyed just a few years ago. I’m told by employees and former employees that internal strife at the top of Samsung continues and that the company is still figuring out who will run the mobile business. Until that’s sorted once and for all, it’s unlikely that Samsung can execute a strategic turnaround for the division and we can expect the device business to drift.

** If you want a sometimes surprising read: An actual teenager breaks down how teens use social media.

I only know a handful of people (myself included) that believe Snapchat does delete your photos. Everyone else I know believes that Snapchat has some secret database somewhere with all of your photos on it. While I will save that debate for another day, it is safe to say that when photos are “leaked” or when there’s controversy about security on the app, we honestly do not really care. We aren't sending pictures of our Social Security Cards here, we're sending selfies and photos with us having 5 chins.


CommonFloor, an Indian online real estate listing company, got an investment from Google Capital, the Wall Street Journal reports. Details of the deal were not disclosed.

Evernote had its first ever layoffs, the Verge reports, letting go of about 20 people as part of a partial restructuring. The company is competing with Dropbox and (to some extent) Box to store our documents and other bits and bytes in the cloud.

Soylent is raisingjust over $10 million in funding from investors including Andreessen Horowitz at a valuation of more than $100 million, Re/code reports. Soylent makes a gloopy, unappealing meal replacement drink that, as far as I can tell, people only drink to say that they’ve done it. It’s like the bungee jumping of meal replacement drinks.

Xiaomi may be like Apple afterall, Ben Thompson argues in Stratechery.

Startups will continue to crowdfund. Some venture investors think that online funding sites like Indiegogo and Kickstarter will continue to grow in terms of deal flow and successful exits, PE Hub reports.

People and Personnel Moves

Marc Lore is gunning for Jeff Bezos. My Bloomberg Businesweek colleague Brad Stone has a really great, entertaining, informative profile of Marc Lore and his new startup The company aspires to be the world’s go-to online shopping club, like Costco or Sam’s Club. Lore was the founder of the diaper-delivering online retailer Quidsi, which competed bitterly with Amazon for years before it sold itself to its arch rival in Seattle.

The implicit criticism of Amazon, the company that nearly drove Quidsi out of business but eventually made Lore wealthy, isn’t lost on some outside observers. “There’s definitely a history of folks being acquired by Amazon, living inside it, learning from it, and coming out with a bit of a chip on their shoulder,” says Scot Wingo, who’s CEO of ChannelAdvisor, a company that helps other retailers sell online and has been briefed on Jet. “They go inside, and it creates a bit of animosity when they come out.”



The company has spent the last few months secretly creating a platform for startups, says Re/code’s Jason Del Rey.


** Piper Jaffray surveyed 112 North American CIOs and found that iOS is the default mobile operating system for the enterprise, ZDNet reports.

** Apple’s bigger iPhone 6 and 6 Plus are denting Android phone sales, TechCrunch reports, citing data from research firm Kantar. The most recent 12-week smartphone sales show that Android lost U.S. marketshare for the first time since September 2013.


** The company says that it’s seeing a shift to video content on the site (maybe because some algorithm pushes terrible video content to the top of our news feeds?) and that the number of video posts per person grew by 75 percent globally and 94 percent in the U.S. over the last year.

** The latest app from Facebook Creative Labs, a thing called Rooms, could help to better distribute information on mobile devices, argues entrepreneur Hiten Shah.


The company’s massive share of the search market shrank from 77.5 percent last November to 75.3 percent last month, while Yahoo's search market share rose from 8 percent to 10 percent, Seeking Alpha reports. The shift came after Yahoo replaced Google as the default search engine.


The company’s smartwatch collaboration with Audi was dubbed the most desirable wearable of CES 2015 by Android Central. It runs not on software based on LG's Open webOS, rather than Google’s Android Wear. And the Wall Street Journal says it should ship in early 2016.


The mobile service provider beat its subscriber growth forecast for 2014 thanks to price cuts and promotions, adding 4.9 million net new customers for the year, Bloomberg reports.


Lover her or hate her, I argue in BloombergView that Yahoo would be in exactly the same plight with pretty much the same few strategic choices whether or not Marissa Mayer were at the helm. 


The reviews site says that the Federal Trade Commission ended its “deep inquiry” into whether the company manipulates reviews. No action will be taken.

Cybercrime Blotter

The FBI bolsters the North Korea theory. Director James Comey claims that the Sony Picture hackers accidentally revealed their IP addresses that tied them to North Korea, Wired reports.

Browsing in privacy mode won’t really protect your privacy thanks so-called “super cookies” that track us anyway, Ars Technica reports.

Media Files

In the wake of the shootings at Charlie Hebdo, some media outlets are taking a stand and others are being more cautious, CNN/Money reports. If your editorial team refuses to reprint a Hebdo political cartoon, well, I agree with my Bloomberg View colleague Leonid Bershidsky. The terrorists have won. #jesuischarliehebdo #standwithcharlie. And look at the nice Charlie Hebdo art on this Bloomberg View editorial.

Related: Where’s the outrage over the NAACP bombing? The Colorado Springs, Colorado chapter of the National Association for the Advancement of Colored People was deliberately bombed with a homemade explosive device, reports the Los Angeles Times.

BitTorrent takes another baby step toward legitimacy. Comedian David Cross is releasing his next feature film direct to fans by selling it as a BitTorrent Bundle, the Verge reports. (Musician Thom Yorke made a few million using the service this year.) Cross also plans to raise money on Kickstarter for movie theater distribution.

News and Notes

Still interested in CES? has a day-three recap of the convention’s coolest and weirdest stuff.

Smart air purifiers are among the connected home devices that are oh so popular at this year’s CES. Good thing. The convention is all about super bad air quality, according to Bloomberg’s Mark Milian.

To contact the author on this story:
Katie Benner at

To contact the editor on this story:
Timothy L O'Brien at