Summary Bullets:
• Samsung’s bold announcement of $160 billion investment in the future missed an opportunity to highlight its 5G mobile access infrastructure capabilities.
• At this crucial inflection point in the run-up to the 5G era, Samsung’s longtime-underdog RAN business shouldn’t take a back seat in high-level messaging.
Samsung this week announced sweeping plans to invest a total of KRW 180 trillion (or about $160 billion) over the next three years in future growth areas including artificial intelligence (AI), 5G, automotive electronics components, and biopharmaceuticals.
Given the intended impact of the announcement, it’s surprising that Samsung didn’t take the opportunity to make a stronger statement about its role in 5G mobile access infrastructure. True, the release does state that the Korea-based tech giant “will also invest aggressively to become a global player in the advanced markets for 5G chipsets and related devices and equipment.” If that last word can be read to include mobile networking gear, then at least part of a single word in the 820-word message was aimed at capturing 5G networking mind share – not exactly a ringing bell.
Samsung should be pushing harder in this area. The company has been slugging away at the global mobile access infrastructure market for years, only to achieve a distant fifth place market share position as consumer electronics and mobile devices dominated its priorities. As far back as 2012, it publicly touted goals of becoming a top-three LTE infrastructure vendor, but it never achieved that goal, even after one of the top four players in its way (Alcatel-Lucent) was taken out of the game.
5G offers a long-awaited crucial inflection point in Samsung’s RAN ambitions, a chance to use 5G vendor selections to win new operator relationships and gain market share. And at a critical juncture in the run-up to the 5G operator-spending wave, Samsung was given a very unusual gift: The world’s fourth-largest RAN vendor, facing potentially life-threatening regulatory action, suspended operations. For months, it wasn’t clear if, or to what extent, ZTE would survive. Presumably, Samsung has been active in leveraging those circumstances by targeting ZTE’s customers, as we know some RAN vendors have. In fact, Samsung’s release this week mentions programs to ensure stability in its supply chains, which may serve as a subtle criticism of ZTE’s dramatic episode. But without greater emphasis on mobile infrastructure in the release, it seems more like a criticism only of ZTE the device vendor rather than ZTE the RAN vendor — raising questions about whether Samsung really is making the most of every opportunity.
To be sure, Samsung has its own advantages in the global RAN race, as we’ve pointed out in our analyses. It has a more diverse set of assets than Ericsson and Nokia, which gives it more financial stability, broad technology expertise and the potential to craft complete in-house Internet of Things solutions. It has sterling technology credentials stemming from a strong presence with South Korean operators, which are well-known to be early adopters of new technologies including 5G. And its win earlier this year to supply Verizon with mobile base stations demonstrates its ability to compete head-to-head with top RAN vendors (it also demonstrates Samsung’s valuable foothold in the U.S., where it’s largely free from competition with Huawei and ZTE and will have access to opportunities in early rollouts of both 5G and Citizens Broadband Radio Service).
So now is the time for Samsung to be louder than ever about its mobile access infrastructure business. And, to be fair, the vendor has been vocal about its 5G RAN and core activities, particularly in Japan and the U.S. But it could do more, for example:
• Samsung hasn’t pushed the brand identity of its flagship 5G base stations with as much impact as its top three rivals have in recent years. A big splash now would be well-timed to capture 5G RAN mindshare.
• Inconsistencies in the messaging of new base stations from Huawei and ZTE (originally touted for virtual RAN capabilities that were later downplayed following shifts in operator preferences) give Samsung a chance to claim a clearer vision.
• The company could do more to promote and publicly align itself with the Open RAN movement, whose potential for RAN-sector disruption could help challengers like Samsung.
One thing’s for sure: If Samsung fails to make the most of 5G, it will be a long wait for the industry’s next major inflection point.