So...it turns out that derivative, second-tier junk does sell!
...It just doesn't make much money - who knew?
Samsung teaches us yet another elusive business principle...
we have so much to thank them for...
I agree, and you know it's amazing they didn't see this coming. Google took a page directly from the microsoft playbook (though with a slightly different monetizing schema) All of the "android" manufacturers have been commoditized, always claiming they will "make it up in volume". (the same "marketshare fixes all" argument that the commodity PC manuf. espoused) They are riding the wave... straight down the bowl, while google rakes in the cash made possible by their products. Nearly the exact scenario we had with Microsoft. Google has created a commodity market for smartphones, no HW manufacturer can succeed (other than the pennies on the dollar commodity OEM's) Samsung is just the LAST android vendor to wind down to barely profitable. They perhaps had a chance, once. But once they selected android, that chance was gone. (and I'm doubtful at this point (maturing market) ANYONE can launch a legitimate new platform)
Samsung has two choices at this point, accept it's role as a commodity manufacturer (an hand most of the profits for it's effort to google) or stop making phones.
Note that in order to drop from 65.9% (about 2/3) of the company's profits, two years ago, to 32.4% (about 1/3) today, other things being equal, mobile profits must fall not 50%, but 75%! To see this, let's call their non-mobile profits 10 as a baseline. Mobile profits dropped from 20 (2/3 of 30) to 5 (1/3 of 15). Going from 20 to 5 is a drop of 75%. Ouuuch.
The whole Google concept of copying the Microsoft model, as in steal Apple's IP and distribute through anyone that wants it, failed to realize that the Microsoft model isn't exactly working these days. The Mobile industry is running through the time line at 10x the rate as the PC market did so it makes sense that the model would end this way round about now.
So far no one has attacked DED. They usually do, to ease the pain.
To be fair this is one of the shortest pieces by DED (less to attack?). His writing improves so much when he restricts his word count. Less is definitely more.
Samsung's parroting of every aspect of Apple has gotten so bad that they've lost their own identity. Their Apple style TV ads look exactly like an Apple ad and remind me that I want to buy a new iPhone. Thanks for reminding me, whoever you are.
Time for Apple to stop using Samsung chip production.
That will hit them where it hurts most.
Apple has a business to run, and running it based on spite is not a good idea.
Of course, if you can satisfy all other objectives (like, getting sufficient supply at a great rate from non-Samsung vendors) then spite can be a nice bonus.
+1. This is their last mobile stronghold. Take this out and watch investors, analysts, pundits and profit abandon Samsung like vermin on a sinking ship.
Just do it already Apple.
"Hitting Samsung where it hurts" is probably waaaaaay down the list of Apple's primary business goals. I'm not saying that it's not on the list at all, and it certainly would be deserved and fun for us to watch... but my hunch is that Apple is concentrating on other goals ahead of this.
This just reinforces Apple's unspoken policy to never mention the competition by name. It's a rotating list of copycats and wanna-be's that doesn't deserve any recognition. And soon, this one too, will fade into history.
This just reinforces Apple's unspoken policy to never mention the competition by name.
On RIM (Blackberry)
“We’ve now passed RIM. And I don’t see them catching up with us in the foreseeable future. They must move beyond their area of strength and comfort, into the unfamiliar territory of trying to become a software platform company. I think it’s going to be a challenge for them to create a competitive platform and to convince developers to create apps for yet a third software platform after iOS and Android.”
Google (Android)
“Google loves to characterize Android as ‘open,’ and iOS and iPhone as ‘closed’. We find this a bit disingenuous, and clouding the real difference between our two approaches. The first thing most of us think about when we hear the word ‘open’ is Windows, which is available on a variety of devices. Unlike Windows, however, where most PCs have the same user interface and run the same apps, Android is very fragmented. Many Android OEMs, including the two largest, HTC and Motorola, install proprietary user interfaces to differentiate themselves from the commodity Android experience. The user’s left to figure it all out. Compare this with iPhone, where every handset works the same.”
+1. This is their last mobile stronghold. Take this out and watch investors, analysts, pundits and profit abandon Samsung like vermin on a sinking ship.
Just do it already Apple.
"Hitting Samsung where it hurts" is probably waaaaaay down the list of Apple's primary business goals. I'm not saying that it's not on the list at all, and it certainly would be deserved and fun for us to watch... but my hunch is that Apple is concentrating on other goals ahead of this.
They hit 'em where it hurts last year. Weren't you paying attention?
“We’ve now passed RIM. And I don’t see them catching up with us in the foreseeable future. They must move beyond their area of strength and comfort, into the unfamiliar territory of trying to become a software platform company. I think it’s going to be a challenge for them to create a competitive platform and to convince developers to create apps for yet a third software platform after iOS and Android.”
Google (Android)
“Google loves to characterize Android as ‘open,’ and iOS and iPhone as ‘closed’. We find this a bit disingenuous, and clouding the real difference between our two approaches. The first thing most of us think about when we hear the word ‘open’ is Windows, which is available on a variety of devices. Unlike Windows, however, where most PCs have the same user interface and run the same apps, Android is very fragmented. Many Android OEMs, including the two largest, HTC and Motorola, install proprietary user interfaces to differentiate themselves from the commodity Android experience. The user’s left to figure it all out. Compare this with iPhone, where every handset works the same.”
You get a gold start for knowing how to cherry-pick quotes.
So when Xiaomi decides it wants more than 5.6% of the world market and red lights a relabelling campaign of it's top class smartphones so AT@T and other large carriers can complete with Apple (and at the same time sell Apple's lineup), we may see their % double rapidly. There is still room for smartphones that cost less in most markets/income brackets but dumbing down and buying Samsung hasn't worked so far. Keeping a smartphone "smart" and stylish is what smaller companies like Xiaomi does so well. And fills a need for a feature rich, less expensive phone.
Xiaomi is limited to China because it would be sued into oblivion for selling its counterfeit products outside of the PRC. Note what happened when it attempted to enter India.
“We’ve now passed RIM. And I don’t see them catching up with us in the foreseeable future. They must move beyond their area of strength and comfort, into the unfamiliar territory of trying to become a software platform company. I think it’s going to be a challenge for them to create a competitive platform and to convince developers to create apps for yet a third software platform after iOS and Android.”
Google (Android)
“Google loves to characterize Android as ‘open,’ and iOS and iPhone as ‘closed’. We find this a bit disingenuous, and clouding the real difference between our two approaches. The first thing most of us think about when we hear the word ‘open’ is Windows, which is available on a variety of devices. Unlike Windows, however, where most PCs have the same user interface and run the same apps, Android is very fragmented. Many Android OEMs, including the two largest, HTC and Motorola, install proprietary user interfaces to differentiate themselves from the commodity Android experience. The user’s left to figure it all out. Compare this with iPhone, where every handset works the same.”
You get a gold start for knowing how to cherry-pick quotes.
Never means not ever, if there's a single one then it's not never.
"Hitting Samsung where it hurts" is probably waaaaaay down the list of Apple's primary business goals. I'm not saying that it's not on the list at all, and it certainly would be deserved and fun for us to watch... but my hunch is that Apple is concentrating on other goals ahead of this.
It's not they're only goal or most important goal, that would be foolish, but removing the air from the competition's balloon, starving them for cash, is a long live strategic practice that's pretty good at keeping you at the top in high barrier to entry fields.
By removing their money for R&D, you create increasing distance with them and make it harder for them to catch you, or even fight in the same segment with you.
Worked with IBM, Intel and lot of high value added firms.
Apple though is in fact doing that to every single competitor, not just Samsung.
The whole Google concept of copying the Microsoft model, as in steal Apple's IP and distribute through anyone that wants it, failed to realize that the Microsoft model isn't exactly working these days. The Mobile industry is running through the time line at 10x the rate as the PC market did so it makes sense that the model would end this way round about now.
I agree, it will be shorter lived than the "windows everywhere" era (which ran for almost 20 years) and it will also be less successful because google has a strong competitor. (possibly two if MS can ever get it act together (frankly judging by their recent products that isn't looking likely)) However, none of that will help the android minions, samesung is doomed to follow LG, HTC, Moto...etc, down the crapper.
This just reinforces Apple's unspoken policy to never mention the competition by name. It's a rotating list of copycats and wanna-be's that doesn't deserve any recognition. And soon, this one too, will fade into history.
Thats not an Apple policy. That is taught in Marketing 101.
The reason why you never mention a competitor by name, is because you are providing free advertising & publicity for that competitor. More often than not, consumers are uninformed when making purchases. The entire premise of marketing is to create a strong want or need for a product in consumers.. something that didn't exist before the marketing campaign. After all if strong want or need already existed, there would be no need to 'market' your products.
Where Samsung screwed up by constantly mentioning or mocking Apple in their ads (as would any company who mentions their direct competition by name) is instead of creating a strong want or need for their products.. they created a curiosity in the difference between their products and Apple. So a potential Samsung customer who may have initially wanted a Samsung phone.. is now curious about the iPhone and wants to do their own personal comparison. That curiosity means the customer will now investigate Apple's phone to see what features it offers, whats the cost difference and what other smaller details would make a difference in the purchase (warranty, customer service, reviews, resale value, etc).
As a business, one of the worst things you can do is promote your competition. Its literally shooting yourself in the foot. And for several years watching a Samsung commercial you could not tell if it was an Apple commercial or a Samsung commercial. Samsungs string of commercials showing the long lines at Apple stores, showing all the people with iPhones constantly charging up their phones or their commercials with a Samsung user bullying a friend or colleague for using an iPhone.. all severed to promote the iPhone even more. Apple didn't need to show their phone on TV ads.. because every Samsung ad on TV already showed the iPhone and mentioned its name.
This just reinforces Apple's unspoken policy to never mention the competition by name. It's a rotating list of copycats and wanna-be's that doesn't deserve any recognition. And soon, this one too, will fade into history.
Thats not an Apple policy. That is taught in Marketing 101.
The reason why you never mention a competitor by name, is because you are providing free advertising & publicity for that competitor. More often than not, consumers are uninformed when making purchases. The entire premise of marketing is to create a strong want or need for a product in consumers.. something that didn't exist before the marketing campaign. After all if strong want or need already existed, there would be no need to 'market' your products.
Where Samsung screwed up by constantly mentioning or mocking Apple in their ads (as would any company who mentions their direct competition by name) is instead of creating a strong want or need for their products.. they created a curiosity in the difference between their products and Apple. So a potential Samsung customer who may have initially wanted a Samsung phone.. is now curious about the iPhone and wants to do their own personal comparison. That curiosity means the customer will now investigate Apple's phone to see what features it offers, whats the cost difference and what other smaller details would make a difference in the purchase (warranty, customer service, reviews, resale value, etc).
As a business, one of the worst things you can do is promote your competition. Its literally shooting yourself in the foot. And for several years watching a Samsung commercial you could not tell if it was an Apple commercial or a Samsung commercial. Samsungs string of commercials showing the long lines at Apple stores, showing all the people with iPhones constantly charging up their phones or their commercials with a Samsung user bullying a friend or colleague for using an iPhone.. all severed to promote the iPhone even more. Apple didn't need to show their phone on TV ads.. because every Samsung ad on TV already showed the iPhone and mentioned its name.
That's all wrong. Samsung did not create anything for Apple that Apple didn't already have. Your Business 101 works great for smaller businesses but not household name companies.
Comments
So...it turns out that derivative, second-tier junk does sell!
...It just doesn't make much money - who knew?
Samsung teaches us yet another elusive business principle...
we have so much to thank them for...
I agree, and you know it's amazing they didn't see this coming. Google took a page directly from the microsoft playbook (though with a slightly different monetizing schema) All of the "android" manufacturers have been commoditized, always claiming they will "make it up in volume". (the same "marketshare fixes all" argument that the commodity PC manuf. espoused) They are riding the wave... straight down the bowl, while google rakes in the cash made possible by their products. Nearly the exact scenario we had with Microsoft. Google has created a commodity market for smartphones, no HW manufacturer can succeed (other than the pennies on the dollar commodity OEM's) Samsung is just the LAST android vendor to wind down to barely profitable. They perhaps had a chance, once. But once they selected android, that chance was gone. (and I'm doubtful at this point (maturing market) ANYONE can launch a legitimate new platform)
Samsung has two choices at this point, accept it's role as a commodity manufacturer (an hand most of the profits for it's effort to google) or stop making phones.
Note that in order to drop from 65.9% (about 2/3) of the company's profits, two years ago, to 32.4% (about 1/3) today, other things being equal, mobile profits must fall not 50%, but 75%! To see this, let's call their non-mobile profits 10 as a baseline. Mobile profits dropped from 20 (2/3 of 30) to 5 (1/3 of 15). Going from 20 to 5 is a drop of 75%. Ouuuch.
What alternative would've worked?
Time for Apple to stop using Samsung chip production.
That will hit them where it hurts most.
Apple has a business to run, and running it based on spite is not a good idea.
Of course, if you can satisfy all other objectives (like, getting sufficient supply at a great rate from non-Samsung vendors) then spite can be a nice bonus.
+1. This is their last mobile stronghold. Take this out and watch investors, analysts, pundits and profit abandon Samsung like vermin on a sinking ship.
Just do it already Apple.
"Hitting Samsung where it hurts" is probably waaaaaay down the list of Apple's primary business goals. I'm not saying that it's not on the list at all, and it certainly would be deserved and fun for us to watch... but my hunch is that Apple is concentrating on other goals ahead of this.
On RIM (Blackberry)
“We’ve now passed RIM. And I don’t see them catching up with us in the foreseeable future. They must move beyond their area of strength and comfort, into the unfamiliar territory of trying to become a software platform company. I think it’s going to be a challenge for them to create a competitive platform and to convince developers to create apps for yet a third software platform after iOS and Android.”
Google (Android)
“Google loves to characterize Android as ‘open,’ and iOS and iPhone as ‘closed’. We find this a bit disingenuous, and clouding the real difference between our two approaches. The first thing most of us think about when we hear the word ‘open’ is Windows, which is available on a variety of devices. Unlike Windows, however, where most PCs have the same user interface and run the same apps, Android is very fragmented. Many Android OEMs, including the two largest, HTC and Motorola, install proprietary user interfaces to differentiate themselves from the commodity Android experience. The user’s left to figure it all out. Compare this with iPhone, where every handset works the same.”
They hit 'em where it hurts last year. Weren't you paying attention?
On RIM (Blackberry)
“We’ve now passed RIM. And I don’t see them catching up with us in the foreseeable future. They must move beyond their area of strength and comfort, into the unfamiliar territory of trying to become a software platform company. I think it’s going to be a challenge for them to create a competitive platform and to convince developers to create apps for yet a third software platform after iOS and Android.”
Google (Android)
“Google loves to characterize Android as ‘open,’ and iOS and iPhone as ‘closed’. We find this a bit disingenuous, and clouding the real difference between our two approaches. The first thing most of us think about when we hear the word ‘open’ is Windows, which is available on a variety of devices. Unlike Windows, however, where most PCs have the same user interface and run the same apps, Android is very fragmented. Many Android OEMs, including the two largest, HTC and Motorola, install proprietary user interfaces to differentiate themselves from the commodity Android experience. The user’s left to figure it all out. Compare this with iPhone, where every handset works the same.”
You get a gold start for knowing how to cherry-pick quotes.
The anti-iPhone trolls need to find another hero.
So when Xiaomi decides it wants more than 5.6% of the world market and red lights a relabelling campaign of it's top class smartphones so AT@T and other large carriers can complete with Apple (and at the same time sell Apple's lineup), we may see their % double rapidly. There is still room for smartphones that cost less in most markets/income brackets but dumbing down and buying Samsung hasn't worked so far. Keeping a smartphone "smart" and stylish is what smaller companies like Xiaomi does so well. And fills a need for a feature rich, less expensive phone.
Xiaomi is limited to China because it would be sued into oblivion for selling its counterfeit products outside of the PRC. Note what happened when it attempted to enter India.
Never means not ever, if there's a single one then it's not never.
"Hitting Samsung where it hurts" is probably waaaaaay down the list of Apple's primary business goals. I'm not saying that it's not on the list at all, and it certainly would be deserved and fun for us to watch... but my hunch is that Apple is concentrating on other goals ahead of this.
It's not they're only goal or most important goal, that would be foolish, but removing the air from the competition's balloon, starving them for cash, is a long live strategic practice that's pretty good at keeping you at the top in high barrier to entry fields.
By removing their money for R&D, you create increasing distance with them and make it harder for them to catch you, or even fight in the same segment with you.
Worked with IBM, Intel and lot of high value added firms.
Apple though is in fact doing that to every single competitor, not just Samsung.
The whole Google concept of copying the Microsoft model, as in steal Apple's IP and distribute through anyone that wants it, failed to realize that the Microsoft model isn't exactly working these days. The Mobile industry is running through the time line at 10x the rate as the PC market did so it makes sense that the model would end this way round about now.
I agree, it will be shorter lived than the "windows everywhere" era (which ran for almost 20 years) and it will also be less successful because google has a strong competitor. (possibly two if MS can ever get it act together (frankly judging by their recent products that isn't looking likely)) However, none of that will help the android minions, samesung is doomed to follow LG, HTC, Moto...etc, down the crapper.
This just reinforces Apple's unspoken policy to never mention the competition by name. It's a rotating list of copycats and wanna-be's that doesn't deserve any recognition. And soon, this one too, will fade into history.
Thats not an Apple policy. That is taught in Marketing 101.
The reason why you never mention a competitor by name, is because you are providing free advertising & publicity for that competitor. More often than not, consumers are uninformed when making purchases. The entire premise of marketing is to create a strong want or need for a product in consumers.. something that didn't exist before the marketing campaign. After all if strong want or need already existed, there would be no need to 'market' your products.
Where Samsung screwed up by constantly mentioning or mocking Apple in their ads (as would any company who mentions their direct competition by name) is instead of creating a strong want or need for their products.. they created a curiosity in the difference between their products and Apple. So a potential Samsung customer who may have initially wanted a Samsung phone.. is now curious about the iPhone and wants to do their own personal comparison. That curiosity means the customer will now investigate Apple's phone to see what features it offers, whats the cost difference and what other smaller details would make a difference in the purchase (warranty, customer service, reviews, resale value, etc).
As a business, one of the worst things you can do is promote your competition. Its literally shooting yourself in the foot. And for several years watching a Samsung commercial you could not tell if it was an Apple commercial or a Samsung commercial. Samsungs string of commercials showing the long lines at Apple stores, showing all the people with iPhones constantly charging up their phones or their commercials with a Samsung user bullying a friend or colleague for using an iPhone.. all severed to promote the iPhone even more. Apple didn't need to show their phone on TV ads.. because every Samsung ad on TV already showed the iPhone and mentioned its name.
That's all wrong. Samsung did not create anything for Apple that Apple didn't already have. Your Business 101 works great for smaller businesses but not household name companies.