Samsung Loses To Apple

“Gartner: iPhone 6 and iPhone 6 Plus drove Apple past Samsung in Q4 worldwide smartphone sales”:

Get rid of the removable battery and microSD card?

That’s like kicking out the drummer and the bass player, hard core fans are not going to like that.

Tech is not like music. In music it’s about establishing a catalogue of hits so you can tour until you die. The future is important, but it’s about the past even more. In tech if you’re not on the bleeding edge, you’re gonna die, which is what was happening to Apple, it just did not have large enough phones. And it turned out people wanted phablets. Because the whole world is going mobile, that’s where you not only surf and connect, but buy too. It’s like Gary Shteyngart’s “Super Sad True Love Story” come to life. And Apple perfected the smartphone. Let’s not forget, once again, that the Cupertino company was not there first, nor do you have to be, that’s a big story in tech, that the bleeding edge does not often succeed…MySpace was replaced by Facebook and Rhapsody was overtaken by Spotify and the iPhone kicked the BlackBerry and Treo to the curb. And to win it’s not about marketing so much as functionality. If it just works, people will use it. Hell, we’re still fighting this war with television remotes…can someone make a device I can comprehend that will work with all my devices? (Don’t e-mail me your solution, the lack of a clear-cut winner dominating public consciousness speaks to my point.)

ANYWAY, Samsung ruled and now it’s an afterthought. Furthermore, by following the crowd they’re drowning the company. Never give up your uniqueness, it’s what adheres people to you. Whether it be the quirky, center console ignition in Saabs or the quirky boxiness of Volvos, the people keeping those brands alive loved those. But, of course, brands are not forever. Especially in tech, where ramp-up costs are smaller.

So Samsung triumphed as the anti-Apple, giving people what they wanted and allowing them to give the middle finger to Jobs’s company all the while. But it turns out that’s all they had. There was no there there. Despite being a Korean company, Samsung was positively Detroit, where the exterior counts and the interior is irrelevant. Detroit’s lunch was eaten by the Japanese, who knew that people would drive the ugliest cars if they just worked, and they did, and now Toyota is a juggernaut and if you’re purchasing an American car you must not have gotten the memo or are financially-challenged, because you just have to read “Consumer Reports” to know that the Japanese own reliability.

But we’re not looking for reliability in phones. We want functionality and something that lasts for two years, when we upgrade. And Samsung made a phone for all people, some for the cutting edge tinkerers and some for the poor. And now Apple has reclaimed its hold on the high end and Xiaomi has eaten up the low end and Samsung is toast. Because it’s about form not content, design not intellectual property.

It’s not so different in the music business. He who writes the songs wins in the end. Sure, ASCAP and BMI are fighting Pandora, but the truth is there’s a ton of money in a hit song still, and it lasts forever.

So what did we learn here? What are the translatable elements?

Play to your hard core. Never abandon them. Sure, change is hard, but keep what they like and add new features. The Galaxy S6 is a me-too iPhone for people who hate Apple, huh?

Content drives everything. It’s not what the phone looks like, but what it can do. Apps come to Apple first. Apple has cutting edge payment technology. Apple integrates all its devices. Apple has a culture, whereas Samsung does not. And it’s culture that keeps your company alive. The music business has focused on the exterior ever since the advent of MTV, when how you looked became the key driver. Funny how almost all of those MTV acts never lasted. But the majors still focus on looks, because it’s easier. And everyone there is brain dead, they don’t want to walk into the wilderness and invent a new paradigm. But look what happened to Samsung, their business fell off a cliff. We’ll find out if the Apple Watch is a success, but give the company credit for not only taking a risk, but one that took years and a fortune to develop. Imagine a music company doing the same. Oh no, you can’t. In content, that’s television. It’s TV that’s telling creators we’ll give you a fortune carte blanche, to do it your own way.

But the barrier to entry is so low in music! Why haven’t we seen revolution?

Because when everybody can play, the rich and talented stay out. Microsoft is getting killed in phones. Google too. You go where the people are not. Instead, in the music business we’ve got wannabes yelling about their substandard wares muddying the marketplace, causing the public to ignore the sphere or pay attention to the usual suspects. And isn’t it interesting that so many ignore what is supposedly so popular. Not only is Beyonce not that big, but neither is Kanye. As for the press lauding their efforts and puffing them up, these are the same people who kept telling us about the Korean miracle. but that’s the newspapers, constantly reporting on what has happened, not what will be.

Apple is not forever. Nothing is forever. Success is about knowing where you’ve been and marching into the wilderness at the same time. Hell, look at our dearly-departed hero Steve Jobs. He lost Apple, foundered at NeXT and then returned triumphantly at Apple, but not immediately, the prognosticators still said the enterprise was going to go bankrupt or be sold. These same people today tell us about BlackBerry’s chances. It’s over. What next, the Doobie Brothers topping the pop chart?

Good ideas are a dime a dozen. Execution is so much harder. Marrying the two is incredibly difficult. Samsung had excellent execution and lame ideas. Furthermore, they were beholden to Google for software, which is akin to not writing your own songs. Apple won by matching great ideas with incredible execution. And, over time, they’ve established a fanbase. Sure, the naysayers and media want to tear them down, but there were people who hated the Beatles in the sixties. You never react, you just go your own way. And you’ve got to give Tim Cook credit for this, he never caved into the media, never mind so many on Wall Street who wanted his head.

So we’ll all have mobile devices. Hell, we already do.

So what’s next?

That’s how you win. Knowing what’s next. Samsung has been a me-too company from its inception. They made better flat panels than Sony and bigger handsets than Apple. But innovation is not spoken there.

Once upon a time the music business was like tech. The best and the brightest challenging convention. But now it’s the dumbest of the dumb, sheeple who do what the mercenary fat cats tell them to while those with any purchase keep bitching their cheese has moved. No wonder it’s seen as a second-class scene, without a truly triumphant product, one that everyone clamors to based on its innovation and quality, it’s toast.

But you just can’t say that. Because everybody remembers what once was and is waiting for those days to return.

But they’re never coming back. Samsung is screwed, on the high end and low. Its only chance is to break new ground, but it’s seemingly unable to, remember the company’s disastrous smartwatch?

Remember the rest of the album from the artist with the hit single?

Neither do I.


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  1. pk de cville commented on Mar 7

    Hi Barry,

    I really appreciate your passionate, enlivening, and dead on view in this article.

    (And also your ‘instructions’ for commenters. So sorry I’m not complying!)


    ADMIN: Bob Lefsetz is the author

  2. Livermore Shimervore commented on Mar 8

    This article reminds me that people who write about Android need to put out a disclaimer from the first line if they are long-term iPhone users. This piece is the typical view of someone who does not understand, even at a fundamental level, what the Android sector is about.

    1-If we are indeed talking about the “hard core”, Lefsetz needs to understand that a big fan of Android has no use for an iPhone. Most are NOT remotely brand fan boys, they are OS fan boys. The things that turn them off about the iPhone are not principally about the “form” or the aesthetic, it’s the inherent limitations of iOS. Those will ALWAYS be there no matter what Ive and Cook decide to do with the iPhone’s size or shape. To the Android fan, iOS is about micromanagement of the “experience” (to use Apple speak). Loyal fans of Android are not interested in being micromanaged.

    2-Samsung for good reasons decided to get on board with Android, which meant that it was committed in the long-term to a market that had an ever increasing level of relentless competition. This is completely unlike iOS where there is only one option: iPhone or go home without your iTunes apps and songs. No matter what Samsung decided to do with its phones, SD cards and user-replaceable batteries, etc., the company was never going to be able to hold onto that level of market share within Android. Nor could any other single OEM because the Android buyer is not brand loyal like the Apple buyer. The Android buyer thinks you are only as good as your last smartphone and frankly, they love the power of jumping ship within competing Android OEMs from one upgrade cycle to the next. “Give me what I want or I go to your *Android* rival, be it China, Korea or California”.

    3-The bigger problem for Samsung and the other Android OEMs is the inescapable reality that the cost of technology goes down over the time, thus the performance delta between mid level phones and premium smartphones has been shrinking rapidly. The only way a single Android OEM can sustain a substantial price premium for their phones like Apple, is if the Android buyer has only one smartphone option, but instead they have dozens. Prices go down, competition becomes more intense: smaller reward for the shareholder (but not for the customer).

    4- The smartphone market is simply too immense for Apple’s one phone/one OS proposition. Apple will be reduced to a certain demographic, westerners and wealthy Asians. That’s going to represent a sliver of enormous global smartphone pie. It’s basically a replay of the Mac vs. Windows story before there was an iPhone. Except this time they won’t have to ask Bill Gates for a bail out. This time they’ll be buying Tesla Motors.

    5-That the iPhone 6 and 6 Plus was their biggest hit ever was a surprise to NO ONE who has been used to 5″ – 5.5″ screens for years now. All of whom were mystified as to why it took such a smart company like Apple this long. Well that is until they saw that iPad sales were going in the opposite direction. No ones going to carry around an iPhone thats getting bigger and iPad nearly as often they used to.

    • rd commented on Mar 8

      It is logical that the next major move will be on to watches as computing in the 1980s was desktops, 1990s was laptops, 2000s were personal assistants and tablets, and 2010s have been phones. The next logical miniturization step is watches. That has been the history of tech.

      I am sure that Samsung will be back in the watch market sometime soon. Meanwhile tablets will soon replace laptops entirely as they get more powerful with more memory.

    • Livermore Shimervore commented on Mar 8

      Smart watches are the one thing I’ve had no interest in. Some OEMs like Apple are frustratingly tying them to specific smartphones. It’s ball and chain mentality, similar to Steve Jobs’ infamous objection to allowing iTunes/ipod to be used by Windows users. Smart money opens up a device to as wide a market as possible, and put brand wars aside. Jobs lost that argument but it majorly saved the company — without those Windows ipod users Apple would have gone under. OEMs would be smart to drop the ball and chain routine with smart watches.
      By the way, virtually every smart watch user I know is a young millennial or a very geek older millennial. If they have the disposable income, this seems to have great appeal to those who are addicted to social media.

  3. Livermore Shimervore commented on Mar 8

    regarding this “Cutting edge payment technology”. <—— CRAP
    Payments via credit card are already insured, if they weren't no one would use credit cards in the first place. Further, actual experts in security frown on the idea of tying biometrics, whether algorithmic or not, to financial transactions. Google Wallet and Apple Pay are nothing more than a ploy to shift the responsibility of securing already insured transactions onto the credit card holder… for NOTHING in return. Never in my life have I witnessed so many millions of people gleefully working for the credit card companies for free. Meanwhile smartphone payments insure that dreaded interchange fees remain an never-ending monkey on the backs of retailers.

    And as for Apple Pay security…. pfffttt

    Please no more fan

  4. Livermore Shimervore commented on Mar 9

    This bit in the Drop Labs link used by the LA Times :

    “These are organized crime rings that are handing out pre-provisioned devices [iPhones with Apple Pay] to mules that are then being used to commit fraud – with much of fraud (for some issuers) – occurring around Miami,FL and Dallas,TX. … What was surprising to hear was how many times Apple stores themselves popped up as the store of choice for the fraudster… There is a certain irony in one compromised Apple Pay device paying for another – only to be drafted subsequently in to the fraudsters service.”

    “[O]ne of the biggest gripes I have heard from issuers is the lack of transparency from Apple (what did they expect?) and the makeshift reporting provided to issuers that is proving to be woefully inadequate. Lack of any kind of decent traceability to track fraudulent transactions back to their originating provisioning steps – banks are being forced to build their own on top… For the democratizing effect Apple had in the payments ecosystem by allowing issuer of every scale having their cards supported in AP – it seems to be having a totally different effect in their ability to fight fraud within.”

  5. Robert M commented on Mar 9

    The iphone is were you go to be ignorant. It will make all your decisions for you in the guise of FOMO. When you put your life into the hands of something that will never let you MO you LO because you are a lemming.

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