Samsung's avalanche vs. Apple's snowflakes
Both Samsung and Apple are succeeding with their different product strategies. Apple's view is that less is more, while Samsung likes to flood the zone.
Two companies are battling for the hearts and minds of billions of mobile users. One company offers a smorgasbord of phones, tablets, and laptops. It's the something-for-everyone approach, with a broad range of devices, price points, colors, and features. The other currently offers a limited range of mobile devices. Its latest smartphone is available in one size, in black or white. But, both companies are succeeding with their different approaches.
This week, the something-for-everyone company, Samsung, unleashed an avalanche of products in London, including five models of its flagship Galaxy S4 smartphone. The models have a 5-inch or 4.3-inch screen, and a variety of processors, cameras, batteries, weights, colors, and features. In addition, Samsung announced new laptops, including a MacBook Air competitor with a 3,200x1,800 pixel display that runs Windows 8 or Android.
Apple, on the other hand, has been content to limit its output over the last eight months to a few finely wrought snowflakes: a revamped MacBook Air and tease of a radically redesigned Mac Pro. In the fall Apple is expected to update the current iPhone 5, along with iOS 7, and perhaps add a lower-cost iPhone aimed at more cost-conscious buyers and emerging markets.
Apple's view is that less is more, while Samsung likes to flood the zone. Apple's products stand for simplicity and elegance, and a base of users -- 600 million iOS devices sold to date -- who are emotionally tied to the brand and culturally tied to the ecosystem. When looking at mobile web usage, as measured by Net Applications, the iPad has an 82 percent share and iPhone has a 59 percent share.
Samsung, with a prodigious marketing budget, stands for multiple choice and an abundance of features. Apple's customers, including 1 million per day who visit an Apple Store, don't have to undergo much analysis paralysis in determining which model to buy compared to what a Samsung customer must assess to reach a purchase decision.
In the U.S., Apple has been king of smartphones throughout the spring, despite the lack of a new iPhone, although Samsung picked up share in May when the Galaxy S4 was introduced. However, globally, Samsung is outpacing Apple.
In the profit arena, Apple's snowflakes have an advantage over Samsung's avalanche. According Strategy Analytics, Samsung commanded 95 percent of global Android smartphone profits in the first quarter of 2013, with $5.1 billion. That equated to 40.8 percent of global smartphone operating profits for the same period. Apple accounted for 57 percent of global profits in the first quarter of 2013 by Strategy Analytics calculation. Also, the iPad far outsells Samsung and other Android tablets, adding to Apple's share of global profit for mobile devices.
Apple's market share will likely continue to decline as the planet becomes more connected and mobile. But CEO Tim Cook believes that if Apple just makes the best, not the most, products, everything will be alright.
"We have to focus on products, making the best products," Cook said. "If we do that right and make great products that enrich peoples' live, then the other things will happen."
Cook is expecting that the new iOS 7 and an incrementally better iPhone will be enough to maintain Apple as a premium brand, growing its base of customers. Meanwhile, Samsung will continue to lead the fragmented Android pack with a barrage of new products and marketing campaigns.