Samsung really took their eye off the ball by obsessing about all things Apple -- copying them, bashing them, and now flooding the market with barely functional wearables in anticipation of what they think Apple might do next. In the meantime, they got lazy with their smartphone designs -- resorting to benchmark cheats, spec bumps, and loading up their phones with useless and poorly implemented gimmicks. This has allowed their more established rivals to come in with better designed high end Android alternatives and post modest gains at Samsung's expense.
And on their backside, Samsung completely missed the threat represented by Chinese Android OEMs. The Chinese competitors have rapidly upped the ante, probably a lot faster than Samsung anticipated; and they seem content to scrape by with considerably lower margins, which Samsung cannot do if they don't want their stock to collapse. Because they share a common platform, these Chinese Android OEMs are a far greater threat to Samsung than Apple.
Of course, try convincing an analyst or tech blogger of that. They share the same myopic view of the market that Samsung seems to have. Focusing on perceived threats from Apple, rather than the far more real ones from their Android brethren.
By doing the heavy lifting with building their own platform, media content distribution, and closed loop app ecosystem, Apple has insulated themselves from the bloodletting in progress with the established Android OEMs. This affords them the freedom to play the long game, and take a more strategic approach with the platform and product roadmap. Stuff like laying the groundwork for 64-bit migration, scaling up the use of exotic materials like sapphire and Liquidmetal alloys, designing their own GPUs and basebands, secure payments, and various approaches to things such as real time map data and augmented reality that they have patented and may or may not introduce in future products. Because they don't share a common platform with their competitors, they don't have to implement a feature or follow the collapsing price points just because others are doing so.
Samsung does not have that luxury, and having these kinds of steep year-over-year declines in the introductory quarter for the Galaxy S5 is an indication that their market position has eroded considerably. They tried to hold things off as long as they could by stuffing the channel and flooding the market with BOGO and other promotions right out of the gate. But, high inventory levels and depressed margins seem to indicate that those efforts failed, and Samsung's now paying the price.
Edited by Woochifer - 7/31/14 at 2:57pm