Apple and Samsung: Frenemies for Life

Samsung and Apple are entwined in an extraordinary relationship as they battle for the lion's share of the rapidly evolving mobile world. Samsung is hammering Apple with a global onslaught of new products with a dizzying array of features and benefits while, in stark contrast, Apple sticks to its philosophy of simplicity. Adding soap-opera-like intrigue, Samsung is also a major supplier to Apple, providing several essential components found in iPhones.

Samsung believes in providing choices -- lots of them. In the just last three years, Samsung has unleashed a flood of mobile devices providing its global consumers with a wide array of shapes, sizes, colors and features. The list begins with five distinct, newly released smartphones -- the S4, the S4 Google edition, the S4 Active, the S4 Mini and the S4 Zoom.


In the tablet sector, Samsung currently offers nine different models ranging in size from 7 inches to 10.1 inches. And if you still cannot find something to suit your taste, the electronics giant created the "phablets" category -- a marriage of smartphones and tablets -- to complete its spectrum of mobile devices.

Although it may seem that Samsung is throwing phones, tablets and phablets against the wall to see what sticks, Samsung insists that its market research supports its strategy. Nanda Ramachandran, vice president of emerging business at Samsung Telecommunications America, asserts, "Samsung's industry-leading smartphones, note devices, and tablets address consumers' diverse demands and personal preferences." Samsung recognizes the inherently heterogeneous nature of the global mobile market and, by providing an abundance of products, expects that at least one of its products will appeal to every consumer. You could say the company's mantra is "many sizes fit everyone."

Apple does things Steve's way. With just three main mobile products (the iPhone, iPad and iPad mini), Apple's Zen-like "less is more" approach to product strategy is a direct reflection of its late and insanely great founder, Steve Jobs. In the years of Jobs' forced exile from Apple (when he was polishing an exquisite diamond called Pixar), the company flailed about, developing more than 50 different products.

When Jobs returned and took over the reins, he immediately slashed more than 40 products. As a result, Apple settled on the three core products that it considers the best in the industry. After all, why would consumers settle for any less? Especially when they are incredibly loyal, willing to stand in long lines and pay inflated prices.


Apple may be forced down a different path in the future. As the mobile industry rapidly grows, it provides consumers with increasingly larger selections of high-quality devices, including those from Samsung. Consequently, Apple faces the choice of trying to replicate its past by providing a limited number of exquisitely designed high-end devices or joining the crowd that's populating the marketplace with lower-priced goods. It's a classic pattern in the tech world as innovation fuels growth and price discounts push sales volume and share. If not profits.

Should Apple maintain the "high road," it faces the real prospects of sacrificing volume growth and market share. On the other hand, by entering the lower-end markets, Apple risks tarnishing its elite status among its cult-like consumers while trying to woo millions of budget-conscious smartphone customers around the globe who would not normally consider Apple devices.

With rumors swirling about a cheaper iPhone, it seems as if Apple will opt for the change. However, unfortunately for Apple, even this road is not without challenges. In their daily struggle to answer "What would Steve do?" the management at Apple will need to determine which technologies, features and benefits will get deleted or diluted in order to make a lesser iPhone less expensive.

Samsung's aggressive, "more-is-more" strategy is paying off. With 20 million Galaxy S4 units sold in just the last two months Samsung holds 29 percent of the global smartphone unit market share (a seven-fold increase in just two years) compared to Apple's 22 percent. Although Samsung still trails Apple in the tablet market --17.9 percent to 39.6 percent -- its momentum has been sending shock waves to Cupertino. In response, look for Apple TV, a 5S phone, iOS upgrades and even an iWatch in the near future.

Even if those new Apple technologies come to fruition soon the marketplace may not be welcoming. The Wall Street Journal reported on July 5 that Samsung is expecting mobile sales for the second half of 2013 to be "weaker than expected." That news has resulted in a loss of $30 billion in market value for Samsung -- a company responsible for 40 percent of South Korea's GNP. When Samsung sneezes Koreans feel very ill.

Like Apple and Samsung, RIM is also seeing its stock tumble after reporting far fewer Blackberry devices being picked by consumers. The times are a-changin' in the mobile world and Apple, the world's biggest company, may need to find better ways to once-again distinguish itself from the rest of the pack. Otherwise there will be quite a few more Californians without jobs.