There are two kinds of businesses in the technology industry. Those that are focused and disciplined, and those that are willing to try anything. Apple falls into the former group, while Samsung is the poster child for the latter group. Samsung, for lack of a better word, is a conglomerate; a technology business with a disparate array of products; from chips to screens, from TVs to smartphones, from air conditioners to washers and dryers, and dozens of other products completely unrelated to one another save for the fact that someone buys them and Samsung collects the money.
The past couple of years have not been kind to the Samsung conglomerate; stung by Apple on the premium side of the mobile device race, and chewed upon relentlessly by cheap Chinese knock-off manufacturers on the low end of the spectrum. Meanwhile, Apple chugs along, dominating the smartphone and tablet industries despite a smaller marketshare. Samsung, meanwhile, struggles on every front where it competes head-to-head with Apple.
Here are a few examples where Apple has remained patient while Samsung charged ahead, only to fall behind, while Apple moves to the lead.
Apple Pay – Samsung Pay finally made a debut long after Apple’s entry into secure mobile payments; an inelegant payment method that will run even on some of Samsung’s low end, but the payment methodology, which may work on more retailer credit card devices, does not have the elegance or level of security– not to mention the backing of financial institutions– of Apple Pay. Typical Samsung. It’s me, too, but not enough.
Apple Watch – Samsung Gear wearables hit the market long before Apple’s new Watch, yet it’s Watch which owns the premium end of the nascent smartphone market, both in unit sales and definitely in revenue and profits. For now, wearables are more accessories than standalone products of significance, but that hasn’t stopped Samsung from revamping its hardware to more closely match Apple’s lineup.
iPhone Upgrade Program – Cell phone carriers are getting out of the so-called (and inappropriately named) subsidy business which made it easy and affordable for everyone to buy a smartphone through their monthly service plan. Those days are gone and customers are on their own to rent, lease, or buy the smartphone of their choice. Apple’s new iPhone Upgrade Program is a lease plan (only for the newest iPhone models) which will be copied by Samsung post-haste; as soon as they can find a financial institution willing to take a chance on a second rate mobile device manufacturer whose fortunes are waning.
Samsung’s willingness to copy Apple’s designs and methods at every turn, while trying to sell chips and screens to the iPhone maker, has caused problems elsewhere within the Korean company’s conglomerate of companies. Apple has shifted manufacturing of key components to Samsung’s competitors, putting a deeper dent into the copy cat’s flagging fortunes.
Apple may not be a charter member of the Church of Marketshare, but the company sells hundreds of millions of products each year, has hundreds of company-owned stores which greet a million customers a day, and sets the standard for industry leading products (while managing to own most of the profits in each industry segment), so it exercises control over a deep and complex supply chain whereby Apple can move tens of billions of dollars from one supplier to another.
Apple is not to be trifled with, and Samsung’s recent fortunes are an example of what can happen when a company does not play the game to Apple’s liking.