Posts tagged "Steve Jobs"

Apple vs. Samsung: Who Will Win?

2 questions:

1. So who actually is the best company today?

2. Who is going to win going forward?

Let’s do a quick comparison on product innovation, CEOs and leadership, brand and design, ecosystem, giving customers what they want, and profits and growth. Have included my view at the bottom.


Now neck-and-neck?

Historically this was a no-brainer as Apple leapfrogged everybody with its new product breakthroughs: iPod, iPhone and iPad. However, since Tim Cook took over as CEO in 2011, the charge is that Apple has become more of an iterator rather than an innovator.

For years, the Apple rumor mill has forecast (wrongly) the imminent arrival of the iWatch and the iTV, while Samsung has brought these products to market, with the Galaxy Gear and Smart TV. Google too is pushing ahead with new product categories, like the Google Glass smart-glasses.

Jong-Kyun Shin, the Samsung President/CEO who runs its mobile division, said: “Innovation is what will get consumers to buy new devices… The Galaxy S4 has features unique to Samsung like Air Gesture that detect hand gestures. In the process of developing and making the Galaxy S4, we have filed around 120 patents related to user interface and software. We’ve also hired a number of software engineers from India, Russia, China and Europe to develop unique features internally.”

Is this innovation strategy working? Reviews of the hand and eye gestures in the Galaxy S4 suggest that they are not “fully-baked”, actually slow the phone down and are more like gimmicks. Critics’ reviews of the Galaxy Gear smart-watch have also not been great, and it has only sold 800,000 units since its launch two months ago. However, Interbrand’s Moon Ji-hun argues that its more about positioning: “Probably Samsung knows better than anyone that Gear will not become a mainstream product. Still, they are trying to convey the message that ‘we are first with such technology,’ which they hope will help build their brand as an advanced technology firm.”

By contrast, the fingerprint sensor unique to the new iPhone 5s has been well-received and is thought to have been well-executed. In what Apple claims to be “the most forward-thinking iPhone ever”, the iPhone 5s is also the first smartphone to market with a 64-bit processor, the A7, which ironically is manufactured by Samsung.

An unlikely Samsung admirer is former Apple CEO John Sculley, who led the firm while Steve Jobs was pushed out in the 1980s. In a piece welcoming Oh-Hyun Kwon into the 2013 TIME 100, Sculley wrote:

“Product design, marketing and complex supply-chain management are the trifecta of success in consumer electronics. Excelling at all of them simultaneously is a rare feat, much like throwing a no-hitter in baseball. Akio Morita did it at Sony with the Walkman and Sony Trinitron. Steve Jobs did it with the iPhone and iPad. With the Samsung Galaxy, Oh-Hyun Kwon joins those business giants. Kwon’s first principles of leadership are remarkably simple and clear. Galaxy phones have a signature design feature: big, beautiful, highest-definition screens; an integrated supply chain allows for a family of products at more price points than competitors’; and their brand advertising is bold, tasteful and executed with a cheeky self-confidence equaled only by Apple’s.”

Apple’s recent ‘This Is Our Signature’ ad is very much a restatement of the core Jobs philosophy: its strapline states, “We simplify, we perfect, until everything we touch enhances life.”

So it seems we have a battle between perfection and getting it out new products fast and refining them later. If it continues on current product feature trajectories, then I would favor Samsung.

But what Apple fans and stock analysts alike are crying out for are bold, new product categories which could rest the game back in Apple’s favor.

CEO & Leadership

Samsung Gets The Medal: 3 CEOs vs Tim Cook



You may be surprised to learn that Samsung has not just one but three CEOs. In post since June 2012, Dr. Oh-Hyun Kwon is Vice Chairman & CEO. Then in March 2013, Samsung also promoted two of its presidents to CEO: most significantly for this discussion, Jong-Kyun Shin, who heads up Samsung’s mobile division, and also Boo-Keun Yoon, head of the appliances division. They do still both report to Oh-Hyun Kwon though, so he maybe the more dominant player. As is common in the culture of Korean companies, Samsung hasn’t provided anything more than minimal bios for these executives, so we don’t know a huge amount about them beyond a handful of interviews that they have given over the years.

We do know that before he become CEO, Kwon oversaw Samsung’s components business, which makes displays, chips, memory, processors, etc. Kwon helped lock down one of his division’s biggest customers, Apple. Apple uses a lot of Samsung components in its mobile devices. Under Kwon, Samsung became the second largest chip maker in the world.

Mobile chief Jong-Kyun Shin has been the most outspoken, telling analysts last month that Samsung’s tablet business is growing rapidly and the company aims to topple Apple as the biggest maker of tablet computers too. He is equally ambitious for the Samsung brand, saying, “Our product innovation and marketing strategy have made Samsung the world’s most preferred smartphone brand. Now we’ll move from the most preferred brand to become one of the world’s leading aspirational brands.”

At Business Insider’s IGNITION Conference, David Eun, executive vice president of Samsung’s Open Innovation Center, shed some light on how the company has been able to see such great success despite such heavy devotion by Apple fans and customers: “Samsung is a very entrepreneurial story. The company set large goals for itself and has been bold in its execution.” He adds, “Seven years ago there was no iPhone or Samsung Galaxy phone. It was all about Nokia and Motorola. It takes entrepreneurial ideas and execution. The leaders at Samsung are people who have risen and made their mark by being entrepreneurial.”

And it is still in the shadow of the visionary Jobs that Tim Cook is currently judged. Cook was a very competent logistics man and COO, but as Jobs himself expressed, “Tim is not a product person”. I see him as a ‘professional manager’ who risks managing processes rather than putting the next dent in the universe. He has done some good things, like improving internal collaboration and corporate governance, but he is not the great showman like Jobs and the jury is out on him.

It will be interesting to see the impact next year when Burberry CEO Angela Ahrendts joins Apple as SVP Retail & Online Stores – will they create more of a fashion and customer focused Apple? Maybe Angela will be Apple CEO in the future?

Overall, currently Samsung’s leadership has more momentum, as they are executing at speed, picking up customers, gaining market share and widening product range. Yet there are still big challenges.

Last week, amid investor concern and lower than hoped-for sales of the flagship Galaxy S4, Samsung called a “crisis awareness meeting”. Samsung has invited 600 management staff members to attend a four-day “global strategizing meeting” in mid December, where the main topic is ‘Crisis Awareness’. According to a report by ZDNet Korea, “As people are foretelling that downfall of Samsung is coming, they are trying their best to prevent such crisis from happening.”

While “crisis” at Samsung doesn’t sound great, it is good that the co-CEOs are facing reality and involving the wider management team. It contrasts favorably with Steve Jobs’ famous “reality distortion field”, which helped move mountains in product development, but often meant that he was abrasive and slow to acknowledge problems and challenges (e.g. iPhone 4 ‘Antennagate’).

Wonder whether Apple has a ‘reality distortion field’ on its top team’s leadership performance?



Apple wins the medal but Samsung closing the gap by massive spending

The Apple brand and logo are currently more recognized around the Western world, and in London and New York, you cannot walk down the street without seeing a sea of white headphones and people playing with their iPhones. The Brand Finance Global 500 2013 puts Apple and Samsung right at the very top of the best brands in the world, ahead of Coca-Cola and Google.

Samsung smartphones are broadly comparable, feature-for-feature, with competitors like HTC, Sony, LG and now Nokia, so why has it become so dominant? A big part of the answer lies in its sheer marketing muscle – Samsung spends a bigger chunk of its annual revenue on advertising and promotion than any other of the world’s top-20 companies by sales – 5.4%, according to Thomson Reuters data. Apple spends just 0.6%, and General Motors 3.5%.

Adverts mocking Apple fans, and heavy investment in product placement and in distribution channels have strengthened its Galaxy mobile brand. Samsung now sells one in every three smartphones and has more than double Apple’s market share. Is this enough to make Samsung loved?

Samsung’s Galaxy S4 launch in New York came under fire for being sexist, showing giggling women chatting about jewelry and nail polish while the men discussed the new phone. Oh Jung-Suk, associate professor at Seoul National University business school cautions: “Samsung’s marketing is too much focused on projecting an image they aspire to: being innovative and ahead of the pack. They are failing to efficiently bridge the gap between the aspiration and how consumers actually respond to the campaign. It’s got to be more aligned.”

Moon Ji-hun, head of brand consultant Interbrand’s Korean operation, adds: “When your brand doesn’t have a clear identity, as is the case with Samsung, to keep spending is probably the best strategy. But maintaining marketing spend at that level in the longer term wouldn’t bring much more benefit. No one can beat Samsung in terms of ad presence, and I doubt whether keeping investing at this level is effective.”

Samsung has told Reuters that it will “continue to leverage our brand power to maintain growth momentum, while focusing on optimizing the efficiency of our marketing activities.”

Apple may sit in top position now, but has lost its mojo over the last couple of years through lackluster product releases and perceived lack of innovation. Samsung is catching up and is already no. 2. The Samsung brand can be improved and it isn’t loved by some like Apple, but I am impressed with the leadership team for seizing the opportunity to leapfrog all its other competitors, through investment and execution with conviction.


Apple wins the medal, but do simplicity and beauty still trump a bigger screen?

Apple has long placed design at the heart of its product development policy. Steve Jobs famously used to obsess about details that nobody would ever see, such as the look of Apple’s factories and the internals of products… this trend was taken to its logical extreme with the launch of the translucent plastic iMac in 1998.

When the iPhone was launched in 2007, its all-touchscreen and single-button front was distinctive and simple. Apple has honed the design over the years with glass casing and then unibody aluminum, but fundamentally it remains unchanged. The iPad takes the same design cues and it gets ever lighter and thinner. Apple’s aluminum MacBooks and iMacs are widely considered to be the most beautiful, slick and minimal.

Sir Jony Ive, Senior Vice President of Design, keeps the Jobs design obsession alive at Apple. His biographer Leander Kahney recently called him the “soul” of Apple, adding, “Ive has a mad, total, one-hundred-and-ten-percent commitment to making the best products humanly possible.” Sir Jony once flew to Japan to watch a sword-maker forge a katana, in his quest to make the MacBook Air even thinner. His remit has now been expanded to software as well as hardware, leading to the flatter, cartoon-like and generally well-received iOS 7 iPhone software update rolled out in September.

However, now that nearly all smartphones have an all-touchscreen front, the differences between them are less striking. Samsung’s current flagship the Galaxy S4 in some aspects has a less polished look than the iPhone 5s, with a polycarbonate plastic backing. However, it has a singular design feature: big, beautiful, highest-definition screens, that dwarf the iPhone and its “Retina” display. The design is “good enough” for consumers who are more focused on features, price and a bigger screen canvas.

Overall it feels that Apple still has the design edge.

Ecosystem & User Experience

Apple wins the medal with its “walled garden”.

This is where Apple still excels. Tim Cook likes to claim that, “Apple has unique strengths in products, software and services”. I think it’s a bit simpler than that. Apple products still broadly have the reputation that they “just work”, and indeed they have made technology more accessible and made us more connected. Add to that the 1,000,000 apps available to download in the App Store and you have a very powerful platform that is seamless across multiple devices. People (willingly) get locked in to Apple’s “walled garden” and it is difficult to persuade them to make the move outside it.

Samsung on the other hand is highly reliant on Google’s Android mobile operating system for smartphones and tablets, and on Microsoft for Windows PCs. While the apps on the Google Play store have caught up in number with the Apple app store, they have historically been slower to come to market and less reliable due to the large fragmentation of Android devices. The Android tablet apps were thought to be just blown-up smartphone apps rather than iPad-style apps fully reimagined for a larger screen, although this is changing. Where Samsung adds onto its devices its own user interface, this is sometimes considered to be “bloatware” that gets in the way of the user experience and duplicates or slows down the core Android or Windows operating system. So here Apple’s obsession with control does pay a dividend for ordinary users wanting stable and intuitive devices.

Principal CEO Oh-Hyun Kwon has publicly acknowledged that this is a weakness and important area of development for Samsung: “A particular focus must be given to serving new customer experience and value by strengthening soft capabilities in software, user experience, design, and solutions.” He also believes that to secure an “an absolute lead” the company, “must have dominance over new technology and global markets”.

John Sculley adds, “As Samsung builds a campus in Silicon Valley, all eyes will be on Kwon to see if the CEO with a Ph.D. from Stanford can be as successful with software as he has been with hardware.”

Looking at buyers of new smartphones, the above chart shows that not many users switch from Apple to Samsung, at only 11%. This is critical to Apple’s long-term survival since Apple users are sticking with iOS and not defecting to Samsung. Apple is having about one-third of its users coming from Android. It is interesting to note that similar to all buyers first-time smartphone buyers favor Samsung by about a three to one margin, approximately 6% vs. 2%, over Apple.

Apple still ahead.

Giving Customers What They Want

Samsung wins the medal.

Customers within Apple’s walled garden broadly get what they want in terms of a seamless user experience across iPhones, iPads and Macs, but they have a much more restricted choice when it comes to variations of new devices. There is only one top-end iPhone (the 5s), and only a big or a small iPad (the iPad Air or the iPad Mini). Steve Jobs famously liked to make these kinds of decisions for customers rather than bother them with a confusing array of options.

By contrast, Samsung makes a much wider range of devices in all shapes and sizes, at a range of price points. They can even go bigger than the Galaxy S4, with a Galaxy Note smartphone known as a “phablet” that blurs the distinction between phone and tablet. Samsung also makes a range of hybrid PCs that fuse tablet and laptop, as well as TVs, kitchen appliances and the new Galaxy Gear smartwatch. The bigger screen in particular seems to be the biggest draw over Apple, although it is something that Apple is likely to correct with the launch of a bigger iPhone 6 in 2014.

Profits & Growth

Growth now with Samsung so wins the medal, but Xmas showdown ahead

The most recent Fortune 500 Global rankings of worldwide companies (based on revenue in their fiscal years ended on or before March 31st, 2013) shows that Samsung topped Apple with revenue totaling $178.6 billion, compared to $156.5 bn. However, with $41.7bn in profit, Apple was beaten only by ExxonMobil. This was more than double Samsung’s $20.6 billion annual profit.

This might be changing – this graph from Business Insider shows that, for the last two quarters, Samsung’s profits were actually higher than Apple’s. Having settled into a pattern of releasing new iPhones and iPads in September/October, Apple is now highly reliant on the holiday quarter in Q4 – although Tim Cook may have a point when he said, “I think it’s going to be an iPad Christmas.”

For now, Apple’s iPhone business is holding up well – it sold 150 million iPhones in its last fiscal year ending in September, as well as 71 million iPads. Indeed, Apple can still claim 70% of the profits in the smartphone sector. The gloss has come off slightly off Samsung’s sales machine – it fell far short of initial estimates that it would sell 100 million Galaxy S4 units, and it is instead now predicting of 100 million total Galaxy S and Note series phones, phablets and tablet devices up until the end of the year.

Apple’s share price has had a tough fall from its all-time highs of $700, although it has since recovered a lot of the ground as stands at year highs of over $560. This is partially fueled by rumors that it is finally about to do a deal to get carrier coverage for the iPhone with China Mobile, the world’s largest mobile carrier and potentially a big source of growth. But for me, this is again an example of a deal that should have happened years ago and which has been hampered by poor execution. Another question mark is the recent launch of the iPhone 5c, with the ‘c’ being variously said to stand for “color”, “cheap” and “China”. It had been hoped that a lower end model would help Apple to gain share in emerging markets, although is it only $80 cheaper that the iPhone 5s and Tim Cook has said that it is a mid-tier rather than low-tier model. This does however give Apple pricing flexibility for the future and, in a market subject to increasing commoditization, I quite admire Apple for standing firm on its high profit margins.

Overall: Neck-And-Neck

So overall today they seem to be neck and neck but I do see the growth of Samsung to be steadier and more sustained. We’re all fascinated by Apple, but so much of what we hear turns out just to be rumors. Right now it remains a profit generating machine, but long-term that will change if it fails to recapture the public imagination and innovate into new product categories. Samsung has weathered years of legal action, and having initially copied parts of the Apple playbook, it is now starting to innovate into new areas.

In the future I am torn: my head currently says the 3 mystery CEOs of Samsung will prevail, but my heart really wants Apple to come back and leapfrog them, with innovation that changes our lives again. Maybe in future both will remain big beasts, and we will have an Apple and Samsung duopoly

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Posted by plates55 - December 4, 2013 at 3:05 pm

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Apple Sends Out Media Invites For January 19 Special Event In New York

We brought you the information at the beginning of the new year that Apple were planning on holding a small scale event in New York, stepping away from their usual event home within San Francisco. At the time of writing there wasn’t a great deal of information available about the specifics of the event, other than it was rumored that Eddy Cue, the companies Senior Vice President of Internet Software and Services would likely be in attendance.

We have moved seven days closer to the event, and Jim Dalrymple from The Loop is reporting that invitations from Apple have started to make their way to select media outlets for the event on January 19th. The invitation itself follows the familiar pattern of being visually simplistic and not giving away any specifics other than confirming the date and that it will be based around an educational announcement.


Now that the event data and topic has been confirmed, the speculation can begin about the actual specifics of the event and the nature of the announcement. In December of 2011, the Michigan Institute of Education (MIT) announced the launch of an online learning initiative which will offer a select portfolio of MIT courses through a web based platform. With the Cupertino companies long standing relationship with the learning establishment people are already talking about some form of partnership in the program which has been called MITx.

When news of the event in New York was first broken, it was thought that it could be related to the iBooks store and application which users can download free of charge onto iOS devices. The iBooks Store is one of the media units that comes under the remit of Eddy Cue, and with this being an educational announcement we could see learning text books being made available on iBooks.

The company has made no secret about the fact they believe their iPad could play an increasingly important role in the future of education. During numerous keynote speeches, the educational adoption of the tablet device has been brought up, along with various video presentations of the iPad being used in a learning environment. It seems as though January 19th could provide some insight into future plans to make the iPad an important learning tool

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Posted by plates55 - January 11, 2012 at 2:45 pm

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