Reader Paul Bauer, of somewhere in the San Francisco Bay area, writes to be about his Samsung CDMA cellphone

I somewhat disagree with your comments on Samsung being a "low-end" cell phone maker. That may be the perception; at least here there is a perception that Nokia makes the best phones. However, I don't think the perception about Samsung is true. I think my new Samsung SPH-A500 CDMA 1x phone is really slick; it looks really good and it has a quality feel about it, unlike many Nokias and the Sony/Ericsson T68i.

I'm not sure I ever quite described Samsung precisely that way. In fact, checking my blog, I find I said the following about Samsung. In my original response to Steven Den Beste I said:

If you want to buy a CDMA phone, it will generally be made by a South Korean company - Samsung or LG or Hyundai. And while these companies make decent products, they are deeply unfashionable: they are brandnames associated with cheap cars and cheap televisions. People do not want this for a mobile phone. So they have lost out.

When I was talking about cellphone operating system software I said

Although all the software mentioned in this article will likely work on either platform (plus existing 2.5G platforms like GPRS), Nokia's hardware may well be slower and buggier in the short term than that from some other manufacturers (eg Samsung). This could hurt the brand too.

Certainly in neither of these cases did I criticise the quality of Samsung's products. I would add that Samsung are clearly the high end manufacturer out of the three Korean manufacturers I mentioned. One very peculiar thing about the way that the cellphone market developed was that the traditional large consumer electronics companies did not achieve prominent positions in the cellphone market. (This may have had something to do with different technical standards in Japan). Sony, Panasonic, NEC, Phillips, etc are not big players in the cellphone market outside Japan. Therefore, the companies that did come to dominate built their brands largely on phones, and did not have very much other baggage attached to their brands. Samsung on the other hand did. Its brand is one people have traditionally associated with cheap televisions and VCRs. In a product where image and cool became extremely important, this baggage was and is a problem. Nokia on the other hand did a brilliant job of building an appropriate brand for cell phones.

Over the last couple of years, I have noticed that the quality of Samsung's other consumer electronics equipment has increased dramatically. Their Hi-fi equipment, DVD players, televisions and the like are getting much better reviews than they were even three or four years ago. Plus I think Samsung's presence in the plasma display market is working very much to their advantage. This is a 'cool' product, and they are able to price their displays much more competitively than the Japanese companies. People who would always buy a Sony for a conventional television (because it doesn't cost that much more than something like a Samsung anyway) are buying Samsung plasma displays (because in doing so they save several thousand dollars) and discovering they are of good quality, and I think this is helping the image of the brand a lot.

Samsung clearly doesn't want to be perceived as a low-end manufacturer (in fact I think it is pretty clear that they want to be perceived as a high end manufacturer and that the company they are trying to emulate is Sony). Here in Europe, where GSM is mandatory, they are not so much a low-end brand in the cellphone market as an absent brand. They do not make low end phones, but instead more expensive feature rich phones, and because Nokia has the better brand, most people who want high end phones get themselves a Nokia or perhaps a Motorola. Probably Samsung do have an advantage on price (because they make their own colour LCD displays, for instance), but the present market is rife with handset subsidies, and therefore the people who buy high-end phones don't see the sticker price of the phone themselves. (Of course, if you buy a low end phone you do, but Samsung are not really in that part of the market). In the CDMA market, Samsung clearly make the best phones. I do not know what the perception of Nokia's CDMA phones is in the US, but I don't imagine they are very good in quality terms, as the company's focus is on other technologies. (On the other hand, Nokia in Europe has made technically worse phones than Motorola for years now, and that hasn't stopped them from dominating the market). If CDMA really takes off (as it looks like it might) and if compelling features are available on CDMA that are not available on GSM and its derivatives, then this could signify a big shift in brand perception. Samsung may find itself perceived as the high quality brand it clearly wants to be, and Nokia might be significantly weakened. (As to what happens in Europe with its effective ban on CDMA, we have to wait and see). If this means that we end up with a world class Korean consumer electronics company, this would be great to see.

The other thing we might see is a big split between Europe and the rest of the world. Europe supports W-CDMA/UMTS, and America is going to be different. Sprint and Verizon will have CDMA2000, and AT&T, T-Mobile, and Cingular will have GSM. However, unlike in Europe, there are going to be difficulties upgrading the GSM networks of the last three to W-CDMA, even if the technology does work (and it doesn't seem to work well at the moment). Plus, I do not understand where you put it in the US spectrum allocations. The present version of W-CDMA is designed to work in the IMT-2000 2.1GHz spectrum band, which is not available in the US. There was talk of auctioning some of the 700MHz band, but this is stalled due to arguments with television station owners, and in any event even if this was available then the technology would have to be adapted to the new frequencies. If you read their publicity, T-Mobile, Cingular, and AT&T seem to be talking about upgrading eventually to EDGE (essentially GPRS with improved modulation) rather than W-CDMA. While this technology may eventually be used in Europe too, it is not the European priority (W-CDMA is) and it clearly isn't the best method for high speed data services. This means that the American GSM companies are going to have to wait for another generation of product development, and are not going to achieve the economies of scale through using the same technology as the US that they would like. I do not know why AT&T got themselves into this mess. However, the more the demand for high bandwidth applications in the US, the better it looks for Sprint and Verizon (and of course Qualcomm).

It may be that Europe and America end up running the same operating systems and applications on their smart phones over different hardware, but ultimately it is going to work better on one system than on the other. The rest of the world is likely to follow the better technology, particularly if the upgrade costs to the new technology are lower (as they are if you have a CDMA network already, which many places do). For 2G, the rest of the world followed Europe, leaving the US somewhat isolated. For 3G, however, there is a strong chance that the opposite may happen.

Update:With this "ladies phone" designed to look like a cosmetics case, Samsung certainly demonstrates that it gets the message that design is crucial. (Link via Bruce Sterling). That said, everyone now gets this. The issue is that Nokia got it a couple of years before everyone else did.

I wonder how Samsung's maket share in the GSM markets of Asia, particularly in fashion and brand conscious places like Hong Kong and Shanghai, compares with their market share in Europe. The phones they sell in Europe are feature packed, and tend to have decent but not great design, and their market share is low. However, models such as the A400 and T700 have not been sighted in Europe, so it may be that they are focusing their efforts on other markets. (It is no doubt easier to fight European companies in Asia than on their home turf). Samsung are now the number 3 cellphone manufacturer in the world in terms of volumes, behind Nokia and Motorola, but the question is how much of this comes from their dominant position in the CDMA market, and how much of that comes from genuinely making waves in the GSM market.