But according to tech analyst Samsung is winning the cellular phone wars after all business thrive on market share and unicorn dander. All of these old stodgy things like profits and net income are highly over-rated. At least they are as long as Apple is the clear leader in those areas.
Yeah. Samsung is falling prey to the same thing that happened at Nokia. The low-end smartphone sales certainly can't offset the loss of high-end smartphone sales. Low-end smartphone sales are like a boat anchor. I honestly don't understand why analysts don't see this when the Nokia debacle was relatively recent. Trying to hold onto high market share at every level is just too hard to do on a global scale. Everything will work as long as your flagship devices are selling in high numbers. However once that's gone those low-end loss leaders suck up everything. With Samsung offering steep discounts and BOGO on their Galaxy S5 flagships, something was bound to go wrong. 20 million S5 units trying to hold up 60 million loss leaders is too much for any company to bear. Yet Wall Street continues to worship at the church of major market share. Why is that metric so important to investors? I'm certain it would be better if Samsung just sold the S5 flagships and dropped all that low-end crap, but their immense greed will not let them. Apple's model will continue to work because they're only passing down flagships and not building low-end crap.
Of course not. Samsung is just like gold digger: when a market has a potential, they cheat to get the most profit they can get. Once the market starts to dry up, they leave faster than the speed of light. (How many Samsung version of iPod non-Touch have you seen since iPhone 4 released? ) That's the also the reason why they don't sign for a peace treaty with Apple: they're leaving, so why pay up front? Suck all the money back to Korean in the name of operating expense and let Apple play with an empty subsidy. (Samsung owns their own ad company, so now you know why they spend 14B last year for ad. )
By the way, unlike Samsung executive, Tim Cook's speciality is profiting from a tiny market, that's why iPod/Mac Pro still there: he can work that work, Samsung can't.
You guys speak of innovation and Apple, but honestly, what innovation have they supplied to the smartphone market? They keep making their phones slimmer, upgrading internals with better chips, increasing screen resolution, and now following Samsung, they are finally increasing their screen size to something respectable. You think that innovation is slimming down and making a screen bigger, big whoop.
Uhhhhhh, they invented the freaking touch screen smart-phone. What are you, 10 years old?
that 2nd half is telling. Differentiation. Other than size and Blackberry, can you look quickly and say... that one is NOT an iPhone.
What differentiates a smartphone today. _Being_ Smart. for you.
Samsung's numbers (and the resultant stock price increase today says this) have pretty much been in the know for 3 months. There are diminishing returns in hitting niches in visible capabilities. Spec Wars. Larger, faster, more ram, more ports, more G's (What my wife calls bandwidth (E, 3G, 4G, LTE(G), but here I Mean Ghz's), more pixels, more screen, etc. etc. But the bottom line is people don't need/use specs, they use the devices, and the sum is more important than the parts.
Apple can sell new 1 and 1/2 phone models (5s and 5c) a year, sell a phone model from 2 years ago (4s), 2 new tablets, and 2 old tablets, and they make money. less per unit than 4 years ago, but still more than the market average (heck samsung and apple the only ones above the market median). Why. Because it's a better total experience, where there is ubiquitous bandwidth.
The Market Facts are pretty solid, and have been so for 3+ years.
1) There are 4 prices points. Free with subs, $100 with subs, $200 with subs, and >$500 without subsidies.
Apple hits all of them.
Look at the above phones. you don't get much other than screen size difference.
Now Apple is shifting from it's 3.5 and 4 to 4, 4.7 and 5.5 in (rumoredly).
That picture above... you've just removed most of the differentiation.
2) So, then you go to weight and 'feel'
- Apple's feel better (solid, professionally built, better for the 3 things phones are used for: calls, pictures, finger navigation
- Other than your carrier bill, all services are performed by Apple
- All your apps come from Apple
- Apple has stores and geniuses
- Focused Integration... Apple from their website only sells phones, tablets, and macs
- Samsung... well
You got move your microwave ovens,
Custom Kitchen Deliveries...
You got to move those Refrigerators,
You got to move your color Teeee Veess...
Apple... That ain't working... That's the way you do it. Your Money for Nothin' and your profits for free.
(apologies to Dire Straits )
5) Market desire: Most polls of people who are 'switchers' make iPhone their next phone.
In the end, you end up with a model of
... First smartphone... cheapest phone you can find that fits your 'external' needs (size, local wireless)
....2nd smartphone... one that fits your 'app needs' (could be an iPhone, but you may get marketed to a android phone on the premise it's an easier migration.
....next smartphone... an iPhone, because you can likely afford it, if not a used one, a .99 cent-er.
Apple will and Samsung will normalize with 30-35% and 50% of the market, respectively, but Samsung will be competing to keep that 15% from the 15-20% of the market that attacks the edges of Samsung's 'empire' that Apple doesn't care about. Where Apple cares about, Samsung and Apple have established a pretty firm border that isn't moving, and it would cost Samsung huge to try to scale an offensive
Apple's ecosystem locks you in tighter. For a small percentage, that's evil, but for people to take pictures, make calls and run a couple apps, it's a 'meh' moment.
As bandwidth and monthly GB's go down in price the barrier to entry for really using your smart phone goes down. Once LTE monthly bandwidth and unlimited national calling drops from $70 a month to $30 a month, more people will use more apps, and will will use their phone more and realize that interface does matter, and if there is no different in price and size, the iPhone is pretty much now _the_ option, unless you're a person that needs niche capabilities (huge phone, huge battery, must jailbreak, a custom app only on Android [and phone x]
Commodity Bandwidth
Commodity phones (at least in terms of the physicals specs)
At this point, differentiation is in 'experience'
- a better buy/upgrade experience
- a better App Experience
- A better App Development Experience
- A better App deployment experience
- A better privacy Experience
- A better integration into your e-Comm and E-conomic world
- your online shopping for 'e-content'
- a better point of sale experience (we hope)
- a better way to integrate with work (just letting work trust your device)
- a better way to integrate into your e-life (Facebook, iPhoto, email, twitter, etc.)
All these points, Apple is ahead or tied with Samsung.
So long story short, this isn't a story of not innovating, at least not in the handset. It's really a story about Samsung not building the ecosystem that Phone users desire. Mobile users want an integrated experience. For all of apple's shortcomings, Apple is far ahead of Samsung on that.
Uhhhhhh, they invented the freaking touch screen smart-phone. What are you, 10 years old?
bzzt, wrong answer, try again.
Apple invented the 3.5" computer that had a wireless phone app. But phones with touch screens, browsers and apps existed much earlier.
What Apple really invented was making the end-user the smartphone customer, not the carrier. That was and is the innovation that has them differentiated from everyone else.
It seems odd that they are blaming diminished interest in smartphones,
Perhaps even the uber geeks with their myriad of customizations have become bored with rooting and skinning their phones. The novelty has worn off. Even they have better things to do.
You guys speak of innovation and Apple, but honestly, what innovation have they supplied to the smartphone market? They keep making their phones slimmer, upgrading internals with better chips, increasing screen resolution, and now following Samsung, they are finally increasing their screen size to something respectable. You think that innovation is slimming down and making a screen bigger, big whoop.
Innovation comes in many forms. Sustaining the viability and appeal of existing product lines through bigger, better, faster, more features, etc., sustaining innovation strategies is hugely important and critical to harvesting the value from the big upfront investment costs that are involved with new products. You have to follow through to build up the ecosystem and feed the customer base and keep them engaged. If you don't have a rock solid sustaining innovation strategy and operational plan you run a risk of being just another company that had a lot of good ideas that seldom if ever deliver real value. Think Xerox. On the other hand you also need new and fresh ideas and disruptive innovations that lay down the foundation for your next generation of sustaining innovations. If you get complacent and rest on your sustaining strategy alone you will quit growing, wither, and unless you're a public utility or monopoly eventually die. Think Microsoft.
It's not an either-or situation, if you want to succeed long term you need both disruptive innovation like the iPhone, iPad, and iTunes and sustaining innovation like the various evolutionary enhancements to these products and the ecosystem over the years. Then there's the innovation on the manufacturing and operations side, including the remarkable data centers that Apple has built. If you think that Apple isn't innovative because they haven't put out a new category-defining product in a few years you are viewing life through a straw. Apple is innovating massively on multiple fronts and in multiple dimensions. It's just a matter of time before they launch another disruptor into the market. Only this time it's landing in an ecosystem and environment that will multiply its impact tremendously because they never quit supporting and sustaining the foundation for continued success.
Samsung is in no danger of going out of business. They just need to clean up there act and figure out what they want to do when they grow up. Admitting that they have an unhealthy obsession with Apple and doing something about it would be a good first step.
Yeah. Samsung is falling prey to the same thing that happened at Nokia. The low-end smartphone sales certainly can't offset the loss of high-end smartphone sales. Low-end smartphone sales are like a boat anchor. I honestly don't understand why analysts don't see this when the Nokia debacle was relatively recent. Trying to hold onto high market share at every level is just too hard to do on a global scale. Everything will work as long as your flagship devices are selling in high numbers. However once that's gone those low-end loss leaders suck up everything. With Samsung offering steep discounts and BOGO on their Galaxy S5 flagships, something was bound to go wrong. 20 million S5 units trying to hold up 60 million loss leaders is too much for any company to bear. Yet Wall Street continues to worship at the church of major market share. Why is that metric so important to investors? I'm certain it would be better if Samsung just sold the S5 flagships and dropped all that low-end crap, but their immense greed will not let them. Apple's model will continue to work because they're only passing down flagships and not building low-end crap.
Last point. And they maintain their former flagships longer, better. (see my last point below... DisneyLand is still a valuable property in the Disney portfolio, even though they have newer parks all over the world.
1st point: Once the market is saturated, you can't play both ends of the spectrum and satisfy the market. low end sales only work to 'enter' a market, not 'retain' one. 'Value' Retains.
Analysts think the last big thing is the next big thing. Cheap cars got Honda et al into the high[er] margin automobile industry, disrupting the old players. They think the same happens in cell phones. The analysts don't understand at saturation it all becomes ecosystem and retention. It's why Chevy Geo buyers didn't care about an Impala (because a Geo wasn't really a Chevy), but why I've only purchased Honda's (save for 2 'hockey mom cars' [suburban and an explorer... ice time isn't cancelled if the roads are closed]), since 1988.
2nd Point: In this arena... Samsung is more like Dell/HP and Google is more like MS. Market Share. Samsung went up today, but Google is down Big. Android 'marketshare' defines it's viability against iOS... the bigger, the more it controls it's destiny by driving all developers, ads, vendors, clients to it as marketshare equals 'safe long term technology path' ('nobody gets fired buying [IBM/MS]'). But Samsung gets caught up in this as well If you need to sell a fleet of stuff, you need to sell every flavor, every color, every option.... That's the way you sell to a mass market or a huge enterprise (like ATT, Verizon).
Apple, and the part that Analysts don't get, is that they use the commodity to sell the experience. Apple is more like Disney[Land], than the traveling circus that is 'bought' by county fair to attract customers, or the old rickety amusement parks that were lowering quality/safety to increase margin. Like Disney, Apple knows integration is more important than Specs. They don't have the biggest roller coaster, but the Matterhorn (and then Space Mountain), small roller coasters in every measure, were built into a ecosystem that consumers wanted, and the experience was more pleasurable than what Coney Island, or other 1950's era amusement parks had.
The graph of Samsung phones discounting over time on page http://www.ibtimes.co.uk/samsung-smartphone-sales-plummet-company-issues-earnings-warning-1454100 would engender panic in anyone familiar with running a business, as Samsung is undertaking desperation measures to move the lagging Galaxy S5, their newest and best product. Smartphones are 76% of Samsung's profits, and that market is collapsing on them, which will drag down the profits of their other divisions as well. Some people extrapolate and believe that the same thing will happen to Apple; but customers have an affinity with Apple and the people-like-them who they see run Apple and produce their hardware and software: the same cannot be said of Samsung, where I doubt that one Samsung customer out of a hundred could name one Samsung principal who runs that company or produces its products. Apple is still expanding into new markets and their products are held in much higher regard than the relatively clunky products of Samsung, where Apple products both new and used are much sought after.
Samsung's reasoning of marketing spend eating into profits seems just as dishonest as their actual marketing. I'd like to know the logic behind spending large amounts of profit to market your surplus of mid/low end phones. What mid/low-end markets require so much money for marketing efforts that it cuts your profits that much? Makes me think Samsung is trying to divert blame away from their high-end strategies against Apple?
I have to think the top level management at Samsung are taking a long hard look at their smart phone division's almost insane desire to beat Apple at all costs. Flooding the market with very low profit products is hurting the whole company. I seriously suspect some heads may roll in the phone division over this and they may scale back the desire to 'win' the numbers game (AKA chanel stuffing, discounts, give awaits and so on) and go back to looking at how to actually make money, even if that means conceding that Apple is actually selling more profitable products by far.
ummm, 7 billion in profit is nothing to sneeze at. I very much doubt heads are going to roll. From a business standpoint, copying Apple was totally the right thing to do. Think of all the catastrophic failures from companies who tried to compete with Apple by partially copying and adding their own flair to it (note that the entire smartphone industry copied Apple to some degree). I'm sure the 100% pure copyists at Samdung are heroes in the eyes of Samdung shareholders. Of all the copyists, they did it the best.
The writing is all over the wall. iPhone holds 42% of the market in the US as of May 2014. How can one phone capture and hold so much share in a commoditized market? How can a luxury product dominate while up against entire platforms of competing devices?
Apple's smartphone share in the US has held steady at around 41% for most of the past year, as smartphones have gone from 60% to 70% of all cellphones. That's probably about where Apple will still be in a few more years, when all US cellphones are smartphones (it's the best-fit saturation for a logistic curve using all the comscore iPhone penetration data for the past four years). That's pretty good for a "top-end" brand! Affordable luxury.
Though I agree that Samsung (like others, it should be noted) have largely copied apple after the debut of the iphone- Samsung has something viable up its sleeves. Imagine a Samsung phone with Tizen, not android. Apple has homekit, and naturally google is following suit with whatever terrible interfaced copycat kit they have. But Samsung makes cars, tools, computers, washers, dryers, tellys, a/c, and other home appliances. If they make Tizen secure- they can let you automate your home cheaply and without the google data collecting BS.
Samsung is potentially sitting on an easy to configure goldmine.
Comments
But according to tech analyst Samsung is winning the cellular phone wars after all business thrive on market share and unicorn dander. All of these old stodgy things like profits and net income are highly over-rated. At least they are as long as Apple is the clear leader in those areas.
Yeah. Samsung is falling prey to the same thing that happened at Nokia. The low-end smartphone sales certainly can't offset the loss of high-end smartphone sales. Low-end smartphone sales are like a boat anchor. I honestly don't understand why analysts don't see this when the Nokia debacle was relatively recent. Trying to hold onto high market share at every level is just too hard to do on a global scale. Everything will work as long as your flagship devices are selling in high numbers. However once that's gone those low-end loss leaders suck up everything. With Samsung offering steep discounts and BOGO on their Galaxy S5 flagships, something was bound to go wrong. 20 million S5 units trying to hold up 60 million loss leaders is too much for any company to bear. Yet Wall Street continues to worship at the church of major market share. Why is that metric so important to investors? I'm certain it would be better if Samsung just sold the S5 flagships and dropped all that low-end crap, but their immense greed will not let them. Apple's model will continue to work because they're only passing down flagships and not building low-end crap.
Samsung is just like gold digger: when a market has a potential, they cheat to get the most profit they can get.
Once the market starts to dry up, they leave faster than the speed of light. (How many Samsung version of iPod non-Touch have you seen since iPhone 4 released? )
That's the also the reason why they don't sign for a peace treaty with Apple: they're leaving, so why pay up front? Suck all the money back to Korean in the name of operating expense and let Apple play with an empty subsidy. (Samsung owns their own ad company, so now you know why they spend 14B last year for ad. )
By the way, unlike Samsung executive, Tim Cook's speciality is profiting from a tiny market, that's why iPod/Mac Pro still there: he can work that work, Samsung can't.
You guys speak of innovation and Apple, but honestly, what innovation have they supplied to the smartphone market? They keep making their phones slimmer, upgrading internals with better chips, increasing screen resolution, and now following Samsung, they are finally increasing their screen size to something respectable. You think that innovation is slimming down and making a screen bigger, big whoop.
Uhhhhhh, they invented the freaking touch screen smart-phone. What are you, 10 years old?
http://mobile.theverge.com/2014/7/8/5880689/robbers-steal-over-40000-samsung-products-factory-heist
This looks to me like an insurance fraud scheme.
Smartphones: Before and after the iPhone
that 2nd half is telling. Differentiation. Other than size and Blackberry, can you look quickly and say... that one is NOT an iPhone.
What differentiates a smartphone today. _Being_ Smart. for you.
Samsung's numbers (and the resultant stock price increase today says this) have pretty much been in the know for 3 months. There are diminishing returns in hitting niches in visible capabilities. Spec Wars. Larger, faster, more ram, more ports, more G's (What my wife calls bandwidth (E, 3G, 4G, LTE(G), but here I Mean Ghz's), more pixels, more screen, etc. etc. But the bottom line is people don't need/use specs, they use the devices, and the sum is more important than the parts.
Apple can sell new 1 and 1/2 phone models (5s and 5c) a year, sell a phone model from 2 years ago (4s), 2 new tablets, and 2 old tablets, and they make money. less per unit than 4 years ago, but still more than the market average (heck samsung and apple the only ones above the market median). Why. Because it's a better total experience, where there is ubiquitous bandwidth.
The Market Facts are pretty solid, and have been so for 3+ years.
1) There are 4 prices points. Free with subs, $100 with subs, $200 with subs, and >$500 without subsidies.
Apple hits all of them.
Look at the above phones. you don't get much other than screen size difference.
Now Apple is shifting from it's 3.5 and 4 to 4, 4.7 and 5.5 in (rumoredly).
That picture above... you've just removed most of the differentiation.
2) So, then you go to weight and 'feel'
- Apple's feel better (solid, professionally built, better for the 3 things phones are used for: calls, pictures, finger navigation
- Apple's respond better (better tactile response, zippier scroll/zoom/nav/animation)
3) Apple also has the simplest care and feeding
- Other than your carrier bill, all services are performed by Apple
- All your apps come from Apple
- Apple has stores and geniuses
- Focused Integration... Apple from their website only sells phones, tablets, and macs
- Samsung... well
You got move your microwave ovens,
Custom Kitchen Deliveries...
You got to move those Refrigerators,
You got to move your color Teeee Veess...
Apple... That ain't working... That's the way you do it. Your Money for Nothin' and your profits for free.
(apologies to Dire Straits
)
5) Market desire: Most polls of people who are 'switchers' make iPhone their next phone.
In the end, you end up with a model of
... First smartphone... cheapest phone you can find that fits your 'external' needs (size, local wireless)
....2nd smartphone... one that fits your 'app needs' (could be an iPhone, but you may get marketed to a android phone on the premise it's an easier migration.
....next smartphone... an iPhone, because you can likely afford it, if not a used one, a .99 cent-er.
Apple will and Samsung will normalize with 30-35% and 50% of the market, respectively, but Samsung will be competing to keep that 15% from the 15-20% of the market that attacks the edges of Samsung's 'empire' that Apple doesn't care about. Where Apple cares about, Samsung and Apple have established a pretty firm border that isn't moving, and it would cost Samsung huge to try to scale an offensive
Apple's ecosystem locks you in tighter. For a small percentage, that's evil, but for people to take pictures, make calls and run a couple apps, it's a 'meh' moment.
As bandwidth and monthly GB's go down in price the barrier to entry for really using your smart phone goes down. Once LTE monthly bandwidth and unlimited national calling drops from $70 a month to $30 a month, more people will use more apps, and will will use their phone more and realize that interface does matter, and if there is no different in price and size, the iPhone is pretty much now _the_ option, unless you're a person that needs niche capabilities (huge phone, huge battery, must jailbreak, a custom app only on Android [and phone x]
Commodity Bandwidth
Commodity phones (at least in terms of the physicals specs)
At this point, differentiation is in 'experience'
- a better buy/upgrade experience
- a better App Experience
- A better App Development Experience
- A better App deployment experience
- A better privacy Experience
- A better integration into your e-Comm and E-conomic world
- your online shopping for 'e-content'
- a better point of sale experience (we hope)
- a better way to integrate with work (just letting work trust your device)
- a better way to integrate into your e-life (Facebook, iPhoto, email, twitter, etc.)
All these points, Apple is ahead or tied with Samsung.
So long story short, this isn't a story of not innovating, at least not in the handset. It's really a story about Samsung not building the ecosystem that Phone users desire. Mobile users want an integrated experience. For all of apple's shortcomings, Apple is far ahead of Samsung on that.
Uhhhhhh, they invented the freaking touch screen smart-phone. What are you, 10 years old?
bzzt, wrong answer, try again.
Apple invented the 3.5" computer that had a wireless phone app. But phones with touch screens, browsers and apps existed much earlier.
What Apple really invented was making the end-user the smartphone customer, not the carrier. That was and is the innovation that has them differentiated from everyone else.
It seems odd that they are blaming diminished interest in smartphones,
Perhaps even the uber geeks with their myriad of customizations have become bored with rooting and skinning their phones. The novelty has worn off. Even they have better things to do.
You forgot the /s
It's not an either-or situation, if you want to succeed long term you need both disruptive innovation like the iPhone, iPad, and iTunes and sustaining innovation like the various evolutionary enhancements to these products and the ecosystem over the years. Then there's the innovation on the manufacturing and operations side, including the remarkable data centers that Apple has built. If you think that Apple isn't innovative because they haven't put out a new category-defining product in a few years you are viewing life through a straw. Apple is innovating massively on multiple fronts and in multiple dimensions. It's just a matter of time before they launch another disruptor into the market. Only this time it's landing in an ecosystem and environment that will multiply its impact tremendously because they never quit supporting and sustaining the foundation for continued success.
Samsung is in no danger of going out of business. They just need to clean up there act and figure out what they want to do when they grow up. Admitting that they have an unhealthy obsession with Apple and doing something about it would be a good first step.
Yeah. Samsung is falling prey to the same thing that happened at Nokia. The low-end smartphone sales certainly can't offset the loss of high-end smartphone sales. Low-end smartphone sales are like a boat anchor. I honestly don't understand why analysts don't see this when the Nokia debacle was relatively recent. Trying to hold onto high market share at every level is just too hard to do on a global scale. Everything will work as long as your flagship devices are selling in high numbers. However once that's gone those low-end loss leaders suck up everything. With Samsung offering steep discounts and BOGO on their Galaxy S5 flagships, something was bound to go wrong. 20 million S5 units trying to hold up 60 million loss leaders is too much for any company to bear. Yet Wall Street continues to worship at the church of major market share. Why is that metric so important to investors? I'm certain it would be better if Samsung just sold the S5 flagships and dropped all that low-end crap, but their immense greed will not let them. Apple's model will continue to work because they're only passing down flagships and not building low-end crap.
Last point. And they maintain their former flagships longer, better. (see my last point below... DisneyLand is still a valuable property in the Disney portfolio, even though they have newer parks all over the world.
1st point: Once the market is saturated, you can't play both ends of the spectrum and satisfy the market. low end sales only work to 'enter' a market, not 'retain' one. 'Value' Retains.
Analysts think the last big thing is the next big thing. Cheap cars got Honda et al into the high[er] margin automobile industry, disrupting the old players. They think the same happens in cell phones. The analysts don't understand at saturation it all becomes ecosystem and retention. It's why Chevy Geo buyers didn't care about an Impala (because a Geo wasn't really a Chevy), but why I've only purchased Honda's (save for 2 'hockey mom cars' [suburban and an explorer... ice time isn't cancelled if the roads are closed]), since 1988.
2nd Point: In this arena... Samsung is more like Dell/HP and Google is more like MS. Market Share. Samsung went up today, but Google is down Big. Android 'marketshare' defines it's viability against iOS... the bigger, the more it controls it's destiny by driving all developers, ads, vendors, clients to it as marketshare equals 'safe long term technology path' ('nobody gets fired buying [IBM/MS]'). But Samsung gets caught up in this as well If you need to sell a fleet of stuff, you need to sell every flavor, every color, every option.... That's the way you sell to a mass market or a huge enterprise (like ATT, Verizon).
Apple, and the part that Analysts don't get, is that they use the commodity to sell the experience. Apple is more like Disney[Land], than the traveling circus that is 'bought' by county fair to attract customers, or the old rickety amusement parks that were lowering quality/safety to increase margin. Like Disney, Apple knows integration is more important than Specs. They don't have the biggest roller coaster, but the Matterhorn (and then Space Mountain), small roller coasters in every measure, were built into a ecosystem that consumers wanted, and the experience was more pleasurable than what Coney Island, or other 1950's era amusement parks had.
http://www.ibtimes.co.uk/samsung-smartphone-sales-plummet-company-issues-earnings-warning-1454100
would engender panic in anyone familiar with running a business, as Samsung is undertaking desperation measures to move the lagging Galaxy S5, their newest and best product. Smartphones are 76% of Samsung's profits, and that market is collapsing on them, which will drag down the profits of their other divisions as well. Some people extrapolate and believe that the same thing will happen to Apple; but customers have an affinity with Apple and the people-like-them who they see run Apple and produce their hardware and software: the same cannot be said of Samsung, where I doubt that one Samsung customer out of a hundred could name one Samsung principal who runs that company or produces its products. Apple is still expanding into new markets and their products are held in much higher regard than the relatively clunky products of Samsung, where Apple products both new and used are much sought after.
What a pathetic company.
Samsung's reasoning of marketing spend eating into profits seems just as dishonest as their actual marketing. I'd like to know the logic behind spending large amounts of profit to market your surplus of mid/low end phones. What mid/low-end markets require so much money for marketing efforts that it cuts your profits that much? Makes me think Samsung is trying to divert blame away from their high-end strategies against Apple?
Well I wonder why Samsung is going downhill?
Could it be:
-Less parts sales to Apple?
-Less copying of Apple's latest designs?
-Possible customers waiting to see Apple's iPhone6? (me too)
-Customers no longer wanting a Google Android SPYWARE OS?
-Poor quality?
I have to think the top level management at Samsung are taking a long hard look at their smart phone division's almost insane desire to beat Apple at all costs. Flooding the market with very low profit products is hurting the whole company. I seriously suspect some heads may roll in the phone division over this and they may scale back the desire to 'win' the numbers game (AKA chanel stuffing, discounts, give awaits and so on) and go back to looking at how to actually make money, even if that means conceding that Apple is actually selling more profitable products by far.
ummm, 7 billion in profit is nothing to sneeze at. I very much doubt heads are going to roll. From a business standpoint, copying Apple was totally the right thing to do. Think of all the catastrophic failures from companies who tried to compete with Apple by partially copying and adding their own flair to it (note that the entire smartphone industry copied Apple to some degree). I'm sure the 100% pure copyists at Samdung are heroes in the eyes of Samdung shareholders. Of all the copyists, they did it the best.
The writing is all over the wall. iPhone holds 42% of the market in the US as of May 2014. How can one phone capture and hold so much share in a commoditized market? How can a luxury product dominate while up against entire platforms of competing devices?
Apple's smartphone share in the US has held steady at around 41% for most of the past year, as smartphones have gone from 60% to 70% of all cellphones. That's probably about where Apple will still be in a few more years, when all US cellphones are smartphones (it's the best-fit saturation for a logistic curve using all the comscore iPhone penetration data for the past four years). That's pretty good for a "top-end" brand! Affordable luxury.
Though I agree that Samsung (like others, it should be noted) have largely copied apple after the debut of the iphone- Samsung has something viable up its sleeves. Imagine a Samsung phone with Tizen, not android. Apple has homekit, and naturally google is following suit with whatever terrible interfaced copycat kit they have. But Samsung makes cars, tools, computers, washers, dryers, tellys, a/c, and other home appliances. If they make Tizen secure- they can let you automate your home cheaply and without the google data collecting BS.
Samsung is potentially sitting on an easy to configure goldmine.
Good point. Execution is key though.
Apple was the first to use a multi touch capacitive touch screen, but resistive touch screens existed way before the iPhone.