Is Google's Pixel phone a bigger threat to Samsung than exploding batteries?

Samsung continues to experience problems with Galaxy Note7 batteries overheating, but Google's grand re-entrance into the smartphone market could be a bigger problem.

Image: CNET

When it comes to smartphones, Samsung has a very public problem on its hands. Replacement Galaxy Note7 devices, exchanged for original models that overheated, have also begun catching catching fire and creating a plethora of problems for their users.

In Kentucky, a man claimed that his replacement Galaxy Note7 caught fire while he was sleeping and caused him to seek medical help for smoke inhalation. Another replacement Note7 caught fire on a Southwest Airlines plane (also in Kentucky), which led to an evacuation of the entire flight.

On Monday, Samsung officially confirmed that it would be suspending production of the devices until it could get the battery issue under control. This is after the US government issued its own formal recall of the devices in mid September.

While some have called this issue a nightmare, and some carriers have considered ending sales of the device, a bigger threat to Samsung's dominance in the smartphone market is Google's Pixel Phone.

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Make no mistake, the exploding battery problem is a serious issue, and Samsung must address it properly. However, if they do so, they should be able to survive what it has brought about.

Even in recent history, there are a plethora of examples of major corporations dealing with critical issues brought about by their products. Exxon survived the Valdez oil spill and Ford survived exploding Pintos. Even Apple, one of Samsung's biggest competitors, made it through Antennagate and will likely make it through the controversy caused by its decision to eliminate the traditional headphone jack on the iPhone 7.

According to research firm Gartner's latest numbers, Samsung holds 22.3% of the worldwide market share for smartphones. Since that number includes iOS and Windows, it would likely grow in the context of the Android market exclusively. And despite the problems caused by the Galaxy Note7, Samsung's stock recently hit an all-time high.

Enter the Pixel

A bigger problem in front of Samsung is Google's re-entering the smartphone market with its Google Pixel phone, announced on October 4, 2016. The Pixel phone presents an impressive feature set that could grab the attention of undecided users.

The biggest issue, though, isn't about the hardware specs. Artificial intelligence (AI) could be the deciding factor for which company comes out on top, and the Pixel is predicated on that premise. Google CEO, Sundar Pichai, went as far as to say that the next evolution of computing is moving from "mobile-first to AI-first," with its new Google Assistant.

In giving initial feedback on the Pixel phone to TechRepublic's Brandon Vigliarolo, Gartner's Werner Goertz said that the announcement of the Pixel phone "was not about hardware in isolation, but how the portfolio of hardware devices fits into the delivery of Google Assistant, and this is where Pixel really shines."

Here's the catch: Google may not necessarily be providing Google Assistant to all of its Android OEM partners. And even if it does, update complications may delay their ability to bring Google Assistant to market with their phones. Samsung recently acquired Viv Labs in order to build its own AI-powered conversational interfaces, but only time will tell if they stack up to the Google Assistant.

Some analysts, like Gartner's Tuong Nguyen, have argued that the Pixel phone isn't a threat to Samsung. Google products aren't about selling massive volumes, and the Pixel phone is currently limited to Verizon, Nguyen said. So it may attract some Verizon Note7 users, but there are many other high-end options available right now from companies like LG and Huawei, and even other options from Samsung.

"I don't think threat is the right word for this situation," Nguyen said. "It's one of the many devices that may benefit from Samsung's misfortunes, but it's not the single device/brand that will cause an impact on Samsung's sales/share--the Note 7 did this by itself without 'help' from the competition."

The 3 big takeaways for TechRepublic readers

  1. Samsung Galaxy Note7 replacement devices began overheating recently, sending one man to the hospital and causing the evacuation of a Southwest Airlines plane.
  2. Despite its problems, Samsung maintains a strong market share and its stock price has risen to new heights even with the Galaxy Note7 debacle.
  3. Google's Pixel phone is a greater threat to Samsung's Android dominance because of its integration with Google Assistant and its top-shelf feature set.

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