Tables Turned On Tech's Fast Follower
A teasing invitation to a big product launch at a major venue is usually the hallmark of an Apple iPhone or iPad event.
But Samsung took another page from its rival's playbook as it asked the media to "come and meet the next Galaxy" on Thursday "the unveiling of its Galaxy S III smartphone at Earls Court in London.
The device, which uses Google's Android operating system, is likely to be the biggest rival in sales this year to the iPhone. Its predecessor, the S II, sold more than 20m units. But the two companies are also going head-to-head in tablets, laptops and, perhaps later this year, televisions â€“ if analysts are right in predicting that an Apple TV set is on the way.
So close are they in their product development that the companies have filed more than 50 patent complaints against one another globally over the past year. But they are not only pitched against each other. Apple is also reliant on Samsung, the world's largest technology company by revenue, whose memory chips and displays are found in the heart of its rival's products.
Emboldened by its success, Samsung has begun to mock Apple in its marketing strategy, with US ads satirising the similarity in appearance between the iPhone 4 and 4s, and urging Apple buyers not to be sheep in following the crowd.
The irony is that Samsung itself has been a follower in its attempts to emulate Apple in tablets and smartphones and has yet to come up with a revolutionary product of its own in the same way that Sony produced the Walkman and Apple the iPhone and iPad. But, at the same time, some analysts are asking how the absence of Steve Jobs, its late co-founder, could affect Apple's future product development.
"It will be hard for Apple to come up with revolutionary products every time, especially with Steve Jobs gone," says Peter Yu, an analyst at BNP Paribas in Seoul. The superpower status of Samsung and Apple in handsets is such that they accounted for 99 per cent of the industry's profits in the first quarter, according to investment bank Canaccord Genuity. Rivals Nokia, BlackBerry-maker RIM, Motorola, HTC, LG and Sony have all struggled to achieve profitability so far this year.
"The industry is at risk with this duopoly of Apple and Samsung," says Ben Wood, a mobile analyst with CCS Insight. "Operators will want to loosen this stranglehold and consumers should be concerned as well. Mobile phones have become the dominant computing platform and we need competition as well as continuous innovation to sustain this."
For now, operators are grateful they have an alternative to Apple in Samsung, given that the iPhone has allowed them little in the way of profit margins, according to Richard Windsor, a tech analyst at Nomura Securities. Like Apple, Samsung's rise as a consumer electronics company has been built on the success of its phones. While Apple was known for its computers in the 1990s, Samsung was identified with microwaves and other household appliances.
Following the launch of the iPhone in 2007, Samsung made mobile phones the "hero" products of the company and invested vast sums in marketing them, says CCS's Mr Wood. It was quick to adopt touchscreens and has increasingly leveraged its manufacturing scale and component designs.
BNP's Mr Yu says: "Samsung is a big organisation. It does not often create a market, but it can catch up fast in any area by concentrating all its resources."
Samsung has offered a wide variety of models and screen sizes compared with Apple's monolithic 3.5in-screen iPhone. They range from the 5.3in Galaxy Note, with its built-in pen, to the Galaxy Y budget smartphone.
But the same strategy has worked less well with tablets. Samsung has different screen sizes ranging from 7in to 10.1in, but has failed to make serious inroads on the iPad's lead. Tim Bajarin, tech consultant with Creative Strategies, says this is more the fault of Google's Android operating system in not offering the same quality of experience as the iPad. "Tablets are completely different animals to mobile phones and the multiple versions of Android that have appeared and the lack of consistency in the different versions have caused a great deal of fragmentation."
Microsoft's Windows 8, which includes a tablet-optimised version of the operating system, could present a more unified solution for Apple's rivals when it appears this year. It could also help Samsung in the Ultrabook category â€“ thin and light laptops that have copied the success of Apple's MacBook Air in bringing tablet features such as touch gestures and instant-on capabilities to laptops.
Rather than being a "fast follower" as in other sectors, Samsung would be on the defensive should Apple launch its own television this year. Samsung has become the number-one TV maker by sales by offering more features, superior screen technology and designs, while producing TVs at lower cost than its rivals.
"I don't think Apple would enter the market unless it felt it had a compelling story, both in terms of features price and margins," says Michael Gartenberg, a Gartner analyst. Other analysts see Apple's superior software, services and content giving it an edge over Samsung in TVs.
"This is the next frontier and Samsung will feel it is there for the taking with the convergence in the living room of the television, the tablet and the mobile phone," CCS's Mr Wood says. "But Apple can exploit its Achilles heel. Samsung doesn't have a joined-up strategy on delivering content."
With both companies on a product roll, this next phase of their rivalry would represent must-watch TV.
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