A Bird in the Hand is worth Two in the Bush

Samsung Galaxy S, image courtesy of WikipediaIn a piece of news that totally illustrates a B2C relationship going awry, Samsung has announced that it won’t be providing additional upgrades to one of its most successful Android smartphones to date, the Galaxy S. That sucks.

If Samsung is not willing to extend the life of its hardware for its customers, won’t those customers be less willing to buy Samsung again? Won’t those customers just be dissatisfied with Samsung? I’ve used customer satisfaction metrics in the past to qualify areas of improvement in live products, and with Samsung’s situation, I would do exactly the same thing. Based on this J.D. Power and Associates report issued only recently, performance and ease of operation were identified as two top customer satisfaction factors. And certainly, both can be addressed by both hardware and software changes.

Samsung probably weighed the ROI of developing new hardware as opposed to the ROI of developing a version of TouchWiz on top of Ice Cream Sandwich. Given that Samsung is supposed to have a competitive advantage in terms of hardware development, I can imagine that they concluded that making a new phone is simply more profitable than investing resources into extending the life of the Galaxy S. To me, that’s a shame since it leaves current customers in the cold.

Although the smartphone industry is still maturing, this move could be interpreted as the inflection point where commodification of Android hardware is simply standard operating procedure, in contrast to the typical Apple iOS hardware lifecycle. Considering that it’s easier and cheaper for consumers to realize value in new software on their existing phones as opposed to setting their apps, preferences, and data on a new phone, I wonder if this will be a hard lesson for Samsung to learn in short order.

When it comes to product development, a customer on your books is worth more than two who are just browsing around. And I’d bet that customer on your books will be more likely to buy from you again, as long as you don’t treat them like dirt.

Comments are closed.