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Permalink Reply by Wally Nes on October 23, 2011 at 10:51am

Didn't the last couple of court-cases for copyright infringement find in favour of Apple?

Haven't really followed it as I believe that the core of the lawsuit is that both phones are rectangular, soft-curved apparatuses. It's bound to be more complicated than that though.

 

I would also point to the indisputable dominance of Nokia in the mobile mart just a couple of years ago. Let's see how Samsung handles this top position.

 

I do like what competition does to a market so I hope there won't be too much domination, not even by my smart-phone manufacturer of choice.

 

I have no opinion regarding the manufacturing and design processes going in to these products though.

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Permalink Reply by Cory Olson on October 23, 2011 at 11:21am

I don't think it's a simple question of "global dominance" as there are many factors at play. In the now all-important smart phone market, Samsung-Android handsets did outsell iPhones, but that is about half a dozen models vs. essentially one iPhone (4). Also next quarter will likely return Apple to the top spot with the 4S release. There is no question, though, that Samsung has made incredible progress over the past two years in a field they were, until recently, a complete non-starter in.

As far as the legal issues go (as pointed out by Wally), recent rulings may lightly be a "win" for Apple, but in the end I think this will be a wash and all-around a negative for both companies. I have hopes that recent talks between the two companies will allow some sort of compromise as honestly the legal wranglings can only hurt the market.

To the question of what brought Samsung to this point, I would put a lot on internalization. As the world's largest electronics manufacturer, they have the ability to internally produce nearly every piece within their own phones. Other companies, such as Apple, have to rely on other firms (such as Samsung) to provide these components and such arrangements have most certainly caused delays and technical issues that Samsung can somewhat avoid. I wouldn't call this advantage uniquely "Korean" per-say, but rather one of their shear size and scope as a company. Additionally, size and production capabilities have allowed Samsung to become the market leader (if not the sole market participant) in entry level smart phones, available at far lower prices than other producers.

Cynics (and Apple supporters) can claim that Samsung copied their way to their current position, but really they deserve to be commended on a quick catch-up in the race after missing the starting gun (or ignoring it depending on perspective). Finally, and this one comes from personal experience with my Nexus S, the Samsung phones simply work well, probably second only behind Apple is this regard. It's all this together, rather than one key point, that brings us to the market as it stands today. I also feel Samsung is in the best position to be the market leader in the future, but only time will tell in that regard.

-Cory Olson

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Permalink Reply by Brian on October 25, 2011 at 5:01pm

Samsung has no idea what they're doing right now.  Instead they are trying to take a "trial and error" approach by "fishing" to see what the consumer is going to latch on to.  Take their tablets for instance.  In their quest to try to beat Apple they tried to launch 3 different sizes and models.  They are doing this with phones as well.  While Apple invests years and millions of dollars in R&D and research to take a pin point laser accuracy type approach, Samsung opts to copy and emulate their competitors and toss tons of money on prototyping and models, taking an artillery approach, thinking that if they flood the market with their phones they'll at least get a hit with something.

More is not better. Quality over Quantity.  Samsung doesn't seem to really understand this.  Also keep in mind that Samsung abandoned their own mobile OS a long time ago and instead relies on Android/Windows OS.  Without that they'd be nothing more than a handset manufacturer.  The reason why Windows and Google are partnering so close to Samsung is because they all want to topple the world's #1 - Apple.

I agree with Corey that the only reason Samsung can do this is because of the sheer scope and resources the company has.  Because they are manufacture based rather than design based (Apple) they don't have to rely on 3rd party suppliers for parts.  Of course the disadvantage is that while they make technically sound physical products, they don't know much about the user experience or software (something that Samsung Chairman himself has pointed out).

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Permalink Reply by Cory Olson on October 25, 2011 at 7:56pm

Samsung moved more 20 million smartphone units last quarter and may have taken as much as 10% market share in tablets from Apple (still a small number, but impressive given the utter monopoly Apple had been holding). They are also now the unquestionable leader in Android phone development and who Google looks to for flagship phones on each new Android release. Simply put, they are hardly lost at sea.

Personally, I am astounded at how fast the ramped up their learning curve and have become a legitimate (perhaps the only legitimate) challenger in these markets. Are they forging new ground? No, not really (although I don't buy in to Apple's legal arguments, but that's a whole other discussion), but they are obviously doing a lot of things right. One thing is that they are putting out different models for different users at different price points. As for quality, the Galaxy S II has gotten universally positive reviews and a few weeks back was named Phone of the Year for 2011 at the T3 Gadget Awards. I'll fully admit my bias as a Samsung/Google Nexus S owner (and love it) and think the Galaxy Nexus looks like a phone geeks dream.

Frankly, I see no need for Samsung to focus on OS development as Google is simply doing it better than anyone else (if anything I would lock down a long term deal just in case Google does try to go solo down the line). Think about computers, would it be better if each manufacturer had their own OS? Of course not. User experience and especially application development are greatly improved by cross-hardware operating systems and allows a company like Samsung to focus on their core competencies in hardware.

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Permalink Reply by Brian on October 25, 2011 at 8:41pm

Technically there is very little difference between iPhone 4/4S and a Galaxy S/S2 in terms of hardware.  The specs are near identical.  So largely the argument in my eyes is about user experience - namely aesthetic design and software.  Since Samsung did not and could not create their own mobile OS, and their phone design was (arguably) copied from Apple, the Samsung vs. Apple argument holds no water.  Apple is far and above more accomplished with the iPhone than Samsung.  A further argument could be if Apple never came out with the iPhone would Samsung have developed and launched the Galaxy S as it is on their own?  I emphatically believe not.  Unit sales of Samsung has been touted widely by Samsung as an indicator that they're on "even terms" with Apple.  I find that argument as ridiculous as Windows saying they're better than Apple because they own the majority of marketshare worldwide or that they sell more Windows machines.  Samsung taking market share from Apple in tablets was bound to happen as they were the only alternative to the iPad and inevitably in the consumer market, any alternative is going to inevitably gain market share when you're against a 100% market share owner.  When that market share reads 50% or 60% for Samsung and we see the iPad in decline, will i acknowledge that Samsung is beating Apple.  Oh and we should compare unit sales of the Samsung tablet that is the closest to the iPad, and not combine all Samsung tablet sizes and model sales.

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Permalink Reply by Cory Olson on October 25, 2011 at 9:10pm

"Since Samsung did not and could not create their own mobile OS, and their phone design was (arguably) copied from Apple, the Samsung vs. Apple argument holds no water."

Well they did create one, it just wasn't that good and I won't fault them for that. Hitching on to the Android bandwagon was the best thing they could do (and I don't believe it would have had the same success had they bought Android in the first place as they apparently had the chance to. The Google integration, systems and ESPECIALLY the Google name is what makes android what it is). Also why would it hold no argument? Design characteristics tend to follow trends and preference. Many companies in many markets have similar designs to their competitors. Just because Apple (arguable) was the design "innovator" (emphasis on arguably) doesn't mean they are the automatic winner.

"if Apple never came out with the iPhone would Samsung have developed and launched the Galaxy S as it is on their own?  I emphatically believe not."

I will freely admit that the iPhone was a game changer and the defining product of an emerging market, but depending on your definition of "smartphone" many manufacturers had already created models (beginning with the IBM Simon concept in 1992 and through the semi-successful Symbian OS based models of the early 2000s). The iPhone proved that these could be successful to a mass market rather than a niche (clean music integration was the absolute key in my opinion), but there were many signs the market was already heading that direction as well.

"I find that argument as ridiculous as Windows saying they're better than Apple because they own the majority of marketshare worldwide or that they sell more Windows machines."

It's the only objective argument that can be made as everything else is subjective, based entirely on personal opinion and preference. I am a PC person and believe Windows is better. I fully accept Apple people out there believe Macs and OS X is better. Same for Android(Samsung) vs. iPhones

"Oh and we should compare unit sales of the Samsung tablet that is the closest to the iPad, and not combine all Samsung tablet sizes and model sales."

Why? If Apple marketed (and some analysts say they will the next product cycle) different sizes and models, they would all be counted together as well. It's a market comparison and therefor all products fitting that market should be counted. If it was a side-by-side review, of course compare the closest models, but that's not the case. To be clear, I don't imagine Samsung ever being the market leader in tablets, first because I believe the market to be something of a fad, and second because it's not Samsung alone that took Apple from 98% market share to 68%, but rather a whole host of other manufacturers entering the market.

In the end, I don't see this as "Samsung beating Apple" or vis-versa. They are both doing incredibly well in the market and are in the best positions to have continued success in the long run (for very different reasons). I think the path they are taking now (mostly on the Apple side) of destroying their somewhat symbiotic relationship is about the only thing that can hurt them, but again that's a whole other discussion. 

 

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Permalink Reply by Brian on October 26, 2011 at 3:22pm

Well they did create one, it just wasn't that good and I won't fault them for that. Hitching on to the Android bandwagon was the best thing they could do (and I don't believe it would have had the same success had they bought Android in the first place as they apparently had the chance to. The Google integration, systems and ESPECIALLY the Google name is what makes android what it is). Also why would it hold no argument? Design characteristics tend to follow trends and preference. Many companies in many markets have similar designs to their competitors. Just because Apple (arguable) was the design "innovator" (emphasis on arguably) doesn't mean they are the automatic winner.

Why wouldn't you fault them for that? A company as large and with so much resources can't create a good mobile OS? And software being at least half other mobile experience (probably more) why shouldn't we hold Samsung accountable? Oh well they just make hardware so of course they can't make good software? What a weak and laughable excuse.

Other than the Google name, they had no experience and credentials in mobile or for that matter design or hardware prior to Android. They knew nothing about mobile usage behaviors or the mobile user experience.  But they knew what developers wanted, and they knew about software development.  But for the most part Android was yet another gamble in a long line of gambles (see Buzz, Wave, etc) from Google - but this one actually paid off.  And it paid off because it was more open and available to developers, it gave more freedom than Apple, and it offered an alternative to the only existing option out there.  And i have nothing against Google and am glad Android is a good competitor to iOS because for a market to be healthy and robust you need competition.

While design characteristics MAY follow trends and preference the whole reason why Apple is so successful is that they continually predict what a user wants before the user themselves know that they want it.  Likewise they predict the designs most likely to appeal to users before they even realize it.  Unlike Samsung and many other companies that have seemingly copied and imitated Apple's products once they've been launched.  In an early lawsuit filing Samsung actually had the gall to ask the court to order Apple to give over their design specs for yet unreleased iPhone 4 and iPad on the basis that "they didn't want to infringe on Apple's design patents."  LOL!

The iPhone proved that these could be successful to a mass market rather than a niche (clean music integration was the absolute key in my opinion), but there were many signs the market was already heading that direction as well.

 

Signs yes, but highly doubtful that a fully viable smartphone at the level of the iPhone would have been launched any time soon, and certainly not by Samsung or LG.  Especially since many executives at Samsung and LG made bold statements about how smart phones were just a short term trend and would never prove to be widely adopted by the mass market.

Why? If Apple marketed (and some analysts say they will the next product cycle) different sizes and models, they would all be counted together as well. It's a market comparison and therefor all products fitting that market should be counted. If it was a side-by-side review, of course compare the closest models, but that's not the case. To be clear, I don't imagine Samsung ever being the market leader in tablets, first because I believe the market to be something of a fad, and second because it's not Samsung alone that took Apple from 98% market share to 68%, but rather a whole host of other manufacturers entering the market.

I highly doubt some analysts know anything about what Apple will release next.  It's pure speculation considering Apples reputation and ability at keeping secrets about product launches.  If it's a market comparison than fine, but my point is many competitors are using the market comparison to incorrectly show that their tablet is somehow beating or gaining on Apple when it's (as you say) more than just one brand in the table market.  And you believe the tablet is a fad?  How so? Considering the purchase numbers, adoption rate, penetration on a global scale how can this be a mere fad?  I think you're absolutely wrong.  I think Apple found the niche usage behavior between a laptop and a smartphone - and it's a powerful, profitable, and needed market.  To me it's common sense.  I don't want to lug around a laptop, and smartphone is too small for a lot of things i want to do.  An iPad is a perfect in-between.  Will an iPad or tablets "kill laptops"?  Definitely not.  But are they a short term fad?  Hell no. 

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Permalink Reply by Cory Olson on October 26, 2011 at 3:53pm

A company as large and with so much resources can't create a good mobile OS?

Apparently not, especially when they are a hardware company. Outside of Apple every hardware manufacturer has failed in their attempts in creating a "good" OS on a market-wide level. Credit Apple for this and undoubtedly competencies gained from making Mac OS builds aided them greatly.

Other than the Google name, they had no experience and credentials prior to Android.

How so? Nearly every Google product ever has been highly rated for user experience. When they bought the raw Android product (and brought in the software team that designed it), the lessons learned from these products is likely what made Android such a good product. Make no mistake, long ago Google stopped being a search engine or internet company. They are a software company, just not in the traditional sense.

Also curious, how do you define a "fully viable smartphone"? The iPhone was undoubtedly the best when it was released, but the phones on the market already already did everything the iPhone did (except strong music integration like I mentioned before). It's impossible to say where smartphones would be if Apple hadn't created the iPhone, but hypotheticals like that don't really have any bearing.

Anyways, I do honestly feel that Apple has made great products which (if not invented) have defined the personal electronics markets of the past 10 years. I may question a few business decisions they are making recently, but time will tell on that, and I don't have another negative word for them. Our only point of discussion, honestly, is why you seem to have such disdain and negatively for Samsung, a company that while far from perfect is doing a lot of things right these days and have the numbers to back that up. Maybe they're not being original, but they are making products that people are buying and ones that (from my personal experience) are legitimately good. Would I like to see Samsung try to be more innovative in the future? Perhaps, but will I say they "have no idea what they're doing right now" because they're not winning as many style points as Apple? Absolutely not.

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Permalink Reply by Brian on October 26, 2011 at 4:32pm

Negativity implies unfounded criticism and exaggeration which i don't believe i've done.  The problem i see is that a lot of anti-Apple people, competitors, and Samsung themselves have gone on these large scale PR campaigns touting how they are the next Apple killer.  People rage and gush about how amazing Samsung is and how they're going to change the world.  Yet this is a company despite all its resources and money and size, scoffed at smart phones.  And not only that but the very products that they tout as being better than Apple's are (arguably) blatantly ripped off from Apple.  Am i the only one that finds this ridiculous?  If i'm being overly negative about Samsung than you're being overly positive.  You excuse Samsung's failure to create a mobile OS because they're "a hardware company" and because no other "hardware manufacturer other than Apple has made a viable mobile OS".  Samsung is not just a hardware company, they are involved in many many industries all over the world - their resources dwarf Apple.  I find both excuses pretty weak.  If Samsung believes they can do anything Apple can, and better, why haven't they?  It's easy to say this once an innovative product like the iPhone is out, but what about before it was out? 

My "disdain" as you put it, comes from the fact that while Samsung has more resources than Apple, and an equal opportunity to create innovative personal electronics they didn't.  Maybe it's not that they couldn't, it's that they were arrogant and complacent.  Whatever the reason, here they are now, proclaiming to the world that they're hot on the heels of Apple armed with spreadsheets ready to overtake them with products that may never have been created if it weren't for Apple.  Ironic, and funny.

Samsung does some things very well, the best in the world perhaps.  But to put them on equal footing with Apple in terms of smart phones and tablet PC's because of some sales numbers is laughable.  While they may be just as profitable as Apple or in the future, more so, until they have established a track record of innovative global market changing consumer electronics like the iPod, iPhone, and iPad, they will never be more than an Apple wannabe. 

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Permalink Reply by Simon Hoggett on October 26, 2011 at 5:21pm

Very well thought out response Brian. I strongly disagreed with some of the early comments in another thread, but this commentary echo's my thoughts on the Samsung/Apple dynamic. There is no reason why Samsung couldn't have made their own version of the iPhone years ago.

 

Samsung's strengths are playing catch (hardware-based) and not innovating. They won't admit it, but it's true. They aren't truly creative company, not in the traditional sense. Samsung's way of minimizing risk (product development) maximizes their vast resources and hardware to play catch up.There is definitely innovation in terms of hardware, but for user experiences, that remains to be seen. Does Samsung have a function platform for their apps? Of course not... iTunes is what truly sets apart the iPhone, not it's display or processor speed. 

 

I'm very interested to see the route Samsung will take with regards to their Smart TVs. Will it be a model that works only in Korea (partnering with KT)? Or can Samsung implement some of the lessons learned from Smartphones and set themselves apart from their competitors. Maybe the better question is: Does Samsung actually want to be market pioneer? 

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Permalink Reply by Brian on October 26, 2011 at 5:58pm

Maybe the better question is: Does Samsung actually want to be market pioneer?

That is a very good question and I would add:

1. Do they really want to be a market pioneer or simply perceived as one?
2. Can they really be a market pioneer?

To point #1:

There is a difference between wanting to BE a market pioneer and wanting to be PERCEIVED as a market pioneer. There is no doubt in my mind that Samsung wants to be PERCEIVED as a market pioneer. But true innovation, at least the world changing kind, has been demonstrated by Steve Jobs as synonymous with risk and sacrifice.  To be a market pioneer you need to do things that no one else is or is thinking about, and that represents major risk.  You need to be able to "not make money" as Jobs put it. Can Samsung and its inherently Korean conservative corporate practices/mindset be able to take that kind of risk?  Jobs certainly was able to take that risk because not only had he proven the payoff but he had people that trusted him irrevocably.  (But keep in mind that he did get fired too) Does Samsung, it's board, and constituents have that kind of trust among each other?

To point #2:

Via my other posts and debate about the state of Korean Creativity and the educational system.  Do they have the people (now) that have the authority, power, and decision making ability to develop and launch innovative consumer electronics? In short, do they have the people and talent?  Do you have 30-50 year old Koreans coming to these companies with great ideas and are able to see them through?  Or are they getting beaten down and oppressed by typical Korean corporate hierarchy and politics? Are they afraid to speak up?  Is risk and failure truly tolerated in large Korean chaebols like Samsung?

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Permalink Reply by Cory Olson on October 26, 2011 at 7:57pm

Completely agreed with you on these points and the answers will most certainly shape the future of Samsung Electronics. As Simon said above, the real strength of Samsung has mostly been successful so far in letting the market become somewhat established and then jumping in. Such strategies have managed to take them very far and this likely more than anything else makes them incredibly resistant to change. A not unimportant factor to Steve Job's return and ultimate amazing success at Apple was that when he first came back, the company had absolutely nothing left to lose by taking risks. When these risks hit it big (i.e. iPod), it solidified Jobs status and unquestioned control over the company, preventing naysayers from questioning his philosophies (which worked). I don't see Samsung hitting rock bottom anytime soon, so likely they will remain risk adverse. What will this mean for their future? Well that's where I run out of words.

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