Apart from the S4 Samsung have quietly released seven other smartphones this year – with prices ranging from $20 (on a plan) to $600 aimed at lower cost markets like India, Middle East, Eastern Europe, Asia and Central America.
Samsung saw that lower cost “feature phones” i.e. GSM and 3G phones with Internet/email access would not take much to bring up to entry level Android smartphone (touch and the ability to run apps) so they did just that.
Analysts are commenting that Samsung risks being seen as too many things to too many people – it has to balance the sophistication and cost of the S4 at one end with brand penetration and customer satisfaction at the other. If Samsung’s 50% and Apple’s 1% market share in Indonesia (Q4, 2012, Canalys) is any guide Samsung need not worry just yet.
Analysts say that Apple needs to have a range of phone products to ensure the AppleSphere permeates everywhere (but it has not done so yet – and we wonder if it ever will). Apple will say that it is doing fine thanks and making the kind of average revenue per unit that it needs to be insanely happy. Samsung says that every device it sells is one less for Apple (and we suspect Nokia and others). By the way 90% of Nokia sales are in sub $100 handsets.
Samsung’s star is on the rise and shows a level of both design and marketing savvy that is not normally associated with a Korean company. It is as if it has taken a leaf from Hyundai/Kia which has quickly succeeded in taking their brand/s from cheap Korean to an aspirational purchase in many car categories. Perhaps it’s the hoard of software engineers hired from India, Russia, China and Europe that have made a design difference, not to mention the 120 patents filed for the S4 interface alone, or the investment in Wacom (stylus) or Sharp (screens) etc. And look out for Fort Knox – Samsung’s version of the BlackBerry Balance (Home and Work partitioning) system.
US computer godfather John Dvorak says ‘Watching mobile phone makers fight it out is like watching boxing – You never know where a knockout punch will come from’. Dvorak says Samsung did it by taking huge risks (designing and test marketing an enormous range of ‘experimental’ products to get it right), by being feature rich (AMOLED screens, larger screens, different features, stylus [which is easier where Asian languages are concerned]) and by marketing well (spending big and adopting names like Galaxy, Fame, Young, Rex and Phablet - instead of boring alpha or numeric codes like the S4 or 5S!). He says despite the huge screen of the S4 and the portability challenges that presents (as a purist he would not have one) it’s the most coveted phone on the planet right now.
My marketing lecturer (a very long time ago) espoused the “EST” theory and it is most relevant here. ‘A brand can be the bEST, biggEST, oldEST, coolEST, cheapEST etc., and the more goodEST positions a company occupies the stronger it is (and vice versa). Apple is now the dearEST, biggEST and Samsung is coolEST, fastEST and amongst the cheapEST etc.
Perhaps it’s prophetic when Lee Kun-HEE, CEO of Samsung said in 2010 that ‘Samsung was in a real crisis and no one knows what will become of it. Most of Samsung’s flagship business and products will be obsolete in 10 years. We must begin anew and we must only look forward.’ Interestingly back in 1993 he said ‘Samsung was a second rate company and you should change everything except your wife and children’. A clear dichotomy to today where it is within a hair’s breadth of being cooler than Apple – potentially the next most bankable brand given that it is more acceptable to Asians as an ‘Asian brand’.
Wall Street Journalist Kirk Spano recently summed Apple up by with this headline ‘Apple’s not rotten, it’s ripe’ and while it is still very profitable in ripening it has lost the sparkle. He adds that Apple really needs to regain the crown quickly and the iWatch may be a key (but naturally Samsung has announced a watch too).
Despite all of the commentary please don’t think this is in anyway an anti-Apple piece. I have confidence that Apple are certainly aware of all these factors (in fact I spent two hours with two of their affable PR managers this week and I am more convinced than ever Apple will prevail). But it has to counter this kind of negative publicity every day
‘When people start talking about Apple “hitting a wall” or losing its “magic,” what they’re really saying is that they fear some deeper void at the firm, a lack of the passion and innovation that made it so extraordinary for so long. There’s no data to back up this claim; nothing in this quarterly report supports it. It’s just an inchoate sense of dread, one sparked by Steve Jobs’ death and confirmed by every slightly negative story one hears about Apple. The fact that Apple’s maps program was so buggy, say, or that it had to release a smaller iPad and a bigger iPhone to compete with rivals, or that it hasn’t put out a category-defining new product since the iPad—the Apple worriers see all these as signs of its diminishing clout’.
I repeat John Dvorak's comment – you never know where the next knockout punch will come from but you will hear about it very quickly at iTWire.