Categories

Interview with Anouch Seydtaghia of Le Temps regarding the Galaxy S4

This interview took place on the eve of the launch of the Galaxy S4. Anouch Seydtaghia is Deputy Head of the Economic & Finance Section chez Le Temps Geneva, Switzerland.

Q: How can you explain that Samsung organizes such a huge event in NY for the S4?

A: The S4 is a very important product as it’s probably the second most profitable mobile phone in the world. Samsung is trying to position it as a premium product and is using every means available to do so.

What are your thoughts about the huge marketing budget of Samsung?

Samsung’s marketing budget has been a constant percent of their sales (approximately). As sales have risen, the budget has risen. This is not considered a normal situation if sales grow very rapidly but Samsung seems to consider x% of sales to be appropriate spending level. Note that Apple’s marketing has fallen as a percent of sales while its sales have grown dramatically.

If we read the media, we see a lot of speculation about the features of the future S4. Can we now compare that to the expectations before a new iPhone?

There are speculations about all phones, from Nokia to HTC and BlackBerry. I don’t see the speculation to be different between all the major companies.

Can Apple regain the lead in the smartphone market? If yes, how?

Apple had leadership in the phone market for two quarters (see graphic below.)

Screen Shot 2013-03-14 at 3-14-6.09.03 PM

It’s a myth to think that Apple was dominant for any extended period of time. The top spot is very difficult to obtain unless a company has a large portfolio of products which are sold in all markets. Apple has less than half the operator distribution of Samsung and keeps only one new product in the market each year.

Apple also has a very high price due to the distribution model it uses for the iPhone. The primary buyers are operators who made large volume purchase commitments a few years ago. The iPhone strategy can be summarized as “skimming” where they pick the most profitable customers rather than “penetration” where there is a focus on market share. It’s therefore very surprising that Apple was able to ship as many phones as it did.

Is there a difference between what Samsung and Apple invest in R&D?

Of course, but we don’t have details. Samsung Electronics has to develop semiconductor processes and build large fabrication plants. Apple has a vast software engineering operation. Apple has iTunes and web services while Samsung has appliances and TVs. The two R&D efforts are vastly different.

What could be the new features in the next smartphone?

The most important innovation in smartphones will be a product that is not a smartphone. The category will be eliminated through a disruptive approach just like all other technologies that have come before it. My expectation is that when it comes it won’t be recognized as important or relevant.

As a follow-up:

- Thank you very much! So do you mean that for Apple, marketing is just 1% of sales?

It’s difficult to compare the two exactly.

We don’t have specific data on Apple’s marketing. We have either Advertising or SG&A (which includes marketing.) Samsung reports “Marketing Expenses” every quarter but these figures appear to be the sum of Ad spending, Sales Promotions, Public Relations and a portion of “other” expenses as a part of SG&A.

You can see a comparison here:

What seems to be happening is that Samsung increases its spending in proportion to sales while Apple grows marketing a bit more slowly.

Basically, Samsung is treating SG&A as a “variable” expense which is tied to sales whereas Apple is managing it as organic growth.

The difference might be that Marketing at Apple is mostly an internal effort and thus depending on headcount while Samsung might be spending mostly externally. If costs are internal then it would be hard to pare them down if sales slow whereas if they are external then they can easily be made variable.

I’ve received comments suggesting that Samsung’s approach is unorthodox and that the quality of marketing cannot be maintained if it grows as quickly as Samsung has grown it. This is a matter of speculation however.

  • studuncan

    “I’ve received comments suggesting that Samsung’s approach is unorthodox
    and that the quality of marketing cannot be maintained if it grows as
    quickly as Samsung has grown it. This is a matter of speculation
    however.”

    Did he watch the SGIV announcement at Radio City Music Hall? With the dancing, and the girls, and the orchestra? I don’t think it’s speculation at this point.

    • http://www.isophist.com/ Emilio Orione

      I agree completely, weird, out of the line of sex and misogyny, they should photocopy Apple’s marketing and announcements too if they want to be premium.

      • http://www.noisetech-software.com/Home.html Steven Noyes

        I thought QualComm at 2013 CES was strange and over the top. Samsung went well beyond it.

    • r.d

      “Did he watch the SGIV announcement at Radio City Music Hall? ”

      Did you read the first sentence of this article.

    • steven75

      The GS3 launch was just as bizarre.

    • Hosni

      The Galaxy S4 event reveals something about Samsung’s target audience. Other than media — who would show up in any event, if only because of the Samsung-Apple rivalry — I suspect the glitzy extravaganza was aimed at young consumers more focused on entertainment/variety than user experience. Ditto the Samsung TV commercials which provide very little consumer information about iGalaxy or its features, but go out of the way to establish that it is cool and anti-establishment.

      Now, every sale is important, but focusing on this consumer cohort is likely to be only marginally profitable (if at all) for a variety of reasons. College-age students soon matriculate into adults with different interests (less free time, more serious, less entertainment-oriented); living on their own rather than with parents eliminates much of the need to rebel against authority; younger consumers with lower incomes buy less content (apps, video) that would tie them to the iGalaxy S4′s ecosystem (or any other), so they can more easily defect from the brand if a competitor offers a more appealing model; younger consumers and others with lower incomes are (as a group) more price sensitive than mature, higher income consumers, and therefore are more easily lured away if a lower-price substitute appears on the market.

      We know from many surveys that iPhone users are more satisfied and express a greater intention of buying another one than the users of other makers’ phones. Moreover it is a well-established principle of marketing that loyal/repeat customers are far more profitable to a company than customers that frequently switch between brands.

      The upshot: The nature of Samsung marketing campaigns and the unusually large amount it spends on marketing (as a % of revenues) are symptomatic of the company’s business strategy. That strategy reveal limited business acumen: an emphasis on unit sales over profit.

      The company’s strategy is particularly vulnerable if Apple comes to the market with an equivalent- or higher-quality product at a slightly lower price (iPhone-Mini), or a product with some hardware or software feature that gains buzz in major media outlets (iPhone-Maxi, fingerprint recognition and secure mobile payments).

      • http://twitter.com/DMaterialist Jonathan Mackenzie

        If they were aiming at young consumers, you would have thought they would not want to use jokes straight out of the 1940′s.

        The vignette style reveal may have had some strategy behind it, but its execution was decidedly clumsy and square. Making your audience embarrassed for the people on stage is not generally an effective way to build excitement for your product.

      • fring

        Except…my ‘young consumer’ children thought it was “Yucky” and “…just a load of old folk and a kid trying to be cool”
        Translation: I don’t actually know what I want…but I definitely don’t want what my parents think I want.

  • Sacto_Joe

    Samsung’s S4 is an iterative product. It largely depends on hype to differentiate it from the S3. By comparison, the iPhone 5 was an evolutionary product when it was released about half a year ago. Samsung being perceived as having overhyped the S4 yesterday is going to reverberate negatively in the short run. In the longer run, it may simply boil down to which form factor one prefers: The smaller, lighter, slimmer, highly machined aluminum 5 or the larger, heavier, thicker plastic S4. A secondary issue may be perceived value at resale time, Of course, issues such as ecosystem and security will continue to favor the 5.

    • obarthelemy

      I think the SGS4 has more new features compared to the SGS3 than the iP5 had compared to the iP4s. That includes a lot of software features, and inductive charging.
      What was the last noticeable innovation in smartphones ? I’d say inductive charging, but that was the TouchPad, a tablet. Or maybe pen input ? Or voice input, though that was on PCs already…

      • Sacto_Joe

        The hardware differences between the 4s and the 5 were far more dramatic than between the S3 and the S4. I discount software changes. Inductive charging is also being pursued by Apple, and is a minor issue.

      • JohnDoey

        A lot of what changed in iPhone 5 won’t really be apparent until there are newer apps built just for 5.

        Complaining that the iPhone UI has been maintained throughout its career is like complaining that the device still uses Wi-Fi and USB. It’s a feature that you can go from a 4 to a 5 and one hour later you forget about the 4 and feel like you have been using a 5 for 5–6 years.

        But underneath it is ready for a new generation of even more powerful apps.

      • Flexxer

        Oh please. Even the most Android-friendly blogs reconized that most of the new software “features” are gimmicks at best. As at this time all “flagship” smartphones have hardware specs that are good enough for all but the most spec-obsessed, all that is left to differentiate (inside the Android flagship market) is a) software (hence all the gimmicks), b) design and c) an avalanche of marketing. Samsung is going with a) and c), and so far it worked. HTC and Sony are trying b), so far with little success.

      • http://twitter.com/WalterMilliken Walter Milliken

        I find it interesting that a lot of the new software features seem to be replacements for Google services… I think the biggest thing here is that it appears that Samsung is getting ready to jettison Google-flavored Android for either a fork or a new underlying OS like Tizen.

        I do seriously question the utility of more cores, though it’s essentially a quad-core design with an extra quad core that’s probably only useful for 3D gaming and other trivially-parallel applications; those extra high-power cores are going to chew through the battery fast when they’re online, though. I’m also not really convinced that more than two cores are going to contribute a whole lot more performance except in specialized situations, though in some cases it may help. It’s possible the caches are big enough to fit the whole Java VM into, though.

        It also looks like Samsung wants to build its own hardware accessory ecosystem rather than looking to third parties, which might be due to either lack of interested third parties, a desire for control, or a desire to capture more accessory profits. I predict Samsung will soon follow Apple’s Lightning connector and create its own serial accessory bus — not specifically to copy Apple, but because this is a good idea; USB simply isn’t a good interface if it needs to operate in both master and slave mode in the same device. There is plenty of IP available for gigabit serial interconnects now, and Samsung is already using a proprietary connector, so a better interconnect for add-on devices would be a good way for them to separate themselves from the rest of the Android herd, which is stuck mostly with micro-USB interfaces from what I’ve seen. It doesn’t look like the S IV has done this yet, but I wouldn’t be surprised to see it next year.

        There do appear to be some interesting software ideas, but I wonder whether they were *good* ideas. The eye-tracking stuff looks like a battery drain waiting to happen, in particular — they have to be running some fairly intensive algorithms in either the CPU or GPU to extract the necessary data from the camera. If it’s part of the main UI, that’s an awfully big computational load compared to the other UI input sensors. I think it’s notable that the battery is so large, and I suspect that’s one of the reasons. I hope they let the users shut that feature off.

        The near-field touch detection is less of a problem in the power-consumption sense, though I wonder if it won’t suffer problems similar to other free-space input schemes, notably unintended touches and muscle fatigue.

        By the way, I think inductive charging goes back well before smartphones too — it’s been used for years on electric toothbrushes, for example.

      • obarthelemy

        - Regarding the 4+4 cores, I’m sure we’ll get data on which core run when fairly soon after release, if the hardware permits that monitoring at all. Don’ forget that Android does a whole lot of multitasking, with background updates for apps, full background running of apps, and, in Samsung’s case, side-by-side and picture-in-picture multitasking for a few apps. Plus the face tracking, eye tracking, dual cameras,… I’m not too worried about those CPU cycles finding a use, and more worried about battery life.
        - Samsung have an endearing way to try stuff out, and see what sticks. They seem better at it than Asus, who do the same but to a lesser degree and with less success. My reaction to their new features was “no, no, no, probably not, no no…”, but I guess duds are the price to pay for trying to innovate :-p
        - The “accessories” move is interesting indeed. It might also be that they spotted an unmet need that was hurting their sales of phones, either because the need was badly met, or because competitors met it better.
        - I’m not sure a new hardware connector will appear, because the probability is that wireless will taking over anyway.
        - As for OS and ecosystem, Samsung have said they won’t keep Tizen to the low low-end… whether consumers jump on will probably decide what happens next.

        As interesting as the new stuff is the stuff that could have changed, but didn’t: AMOLED, plastics, SD Slot, removable battery. Those are very central to the Galaxy S’s value proposition.

      • http://twitter.com/WalterMilliken Walter Milliken

        Blogs are now reporting that the US version is using the Qualcomm Snapdragon 600 4-core processor, I would guess due to LTE integration.

        Yeah, if there are a lot of apps running in the background, then they can use the extra cores (at the expense of power), but I don’t expect a single foreground app will get much advantage out of more than two or three cores. There are also DRAM bottleneck issues with multi-core designs which will be exacerbated by running different apps on different cores (more thrashing of the DRAM channel). I don’t know where the Samsung chips are on the architectural fixes for those problems. That was one of the problems Apple tackled in their A6 design, as I recall and is apparently a weakness of the stock ARM core designs. I believe Samsung has the ability to make custom ARM cores (architecture license), though, so they could have fixed this.

        I don’t think wireless will replace a bus connector; it works for low-performance stuff, but when the bandwidth or range goes up it becomes a power issue. Wireless is fine for sensors and the like. It’s a little dubious for shipping images and video around. (I’m surprised Apple managed to get Airplay to work, actually, though HD only uses about 40 Mb/s when compressed, but that’s still a lot for wireless.)

        I’m a bit curious about the AMOLED display — from the branding used, it sounds like it’s another Pentile design (i.e. it’s not “AMOLED Plus”), which makes the 442ppi claim a little wonky, since each Pentile “pixel” is actually 2/3 of a normal RGB one. As near as I can tell, Apple’s Retina display actually has a slightly higher subpixel pitch still, at least in the horizontal direction, though not vertical. I also wonder if Samsung has tackled the color correction problems noted by Displaymate, which seem to be a major weakness of their AMOLED technology. Presumably they could fix this in software if they wanted to, it doesn’t require the display hardware to change, as I understand it.

      • obarthelemy

        Exynos vs Snapdragon: I’d guess due to production constraints too.

        I think pure peak performance has become irrelevant (and indeed, single-core perf is way preferable to aggregate perf), what counts is perf/watt.The way I see it, Apple are trying to do good custom cores that are well-optimized for *both* high-perf and low-po, while Samsung have gone for 2 sets of CPUs and transparent switching. As to whether a wider DRAM interface is more important than 2x the cache and cores or whatever else… that question seems random. Or not so random :-p

        Wireless is working right now even for HD video, and fits the use case nicely: beam something from your smartphone to a bigger screen/loudspeaker few meters aways. H.265 and wifi ac will make that even easier. I really thing the next step is wireless everything (charging, synching, …). Phones have reached a point were people are complaining about them being too thin and light, so I think battery life will become less and less of an issue ?

        The GS4′s AMOLED is pentile. At this pixel size, I’m betting is doesn’t matter at all. Also, focusing on color fidelity only to evaluate a screen misses most of what actually matters: contrast, min and max brightness, gamut, power consumption… Also what one wants in a screen depends a lot on usage: in my case for example, I watch barely any videos, but read a lot at night in bed. Color fidelity doesn’t matter to me, 0-nits blacks do, and double the green subpixels works out fine since I prefer green (could be amber too) on black for reading (I’m even forcing it on all sites on all my browsers, desktops and Asymco included ^^). I’m still puzzled as to why Android doesn’t include color calibration and contrast adjustment as a baseline. Samsung have a few pre-sets (for videos, gaming, vivid pictures…) but nothing satisfying. I don’t know if iOS does any better.

      • http://twitter.com/WalterMilliken Walter Milliken

        According to the guy at displaymate.com, who seems to know what he’s talking about, all the iOS displays appear to be individually color calibrated at the factory, given how closely they match. And that’s consistent with Apple’s OS X software infrastructure, which has included screen color correction for a long time.

      • JohnDoey

        All modern smartphones do a lot of multitasking.

        Android apps only support using up to 2 cores.

      • JohnDoey

        You don’t have to guess. Samsung already said they are increasing their software teams and unique features to ward off being replaced by another Android vendor.

      • Hosni

        @Walter – “I think the biggest thing here is that it appears that Samsung is getting ready to jettison Google-flavored Android for either a fork or a new underlying OS like Tizen.”

        Rather than put Samsung in the driver’s seat, I would say that Google is getting ready to change Android (“Chromedroid”) in ways that will make it less appealing (less profitable) to Samsung and other mobile phone makers — that is, other than Moto. Samsung and other device makers have been developing their own solutions such as Tizen as insurance against that day rather than a desire to play offense against Google/Android.

      • http://twitter.com/WalterMilliken Walter Milliken

        Good point, but if that were all, they could go to Windows Phone (though maybe without room to differentiate there). I think Samsung sees who’s making the profits and who’s got the working brand now (certainly outside of the tech press). I don’t think Google is in the driver’s seat now, and the recent leaks to the press suggest the same thing. I suspect the only thing Samsung thinks they need from Google now is search in the US and EU, and they can always threaten to go to Bing…. After all, how hard is it to copy someone else’s services?

        It looks like, for now, Samsung owns all those eyeballs Google covets. If Sammy thinks they can get away with jettisoning Google services, and it sure looks like that’s what they’re doing, I wouldn’t be surprised if they started trying to either drive Google, or failing that, run right over them. Also, Samsung doesn’t need Google in some major markets like China, where Google is weak anyway — it’s probably more of a liability there.

      • Hosni

        @Walter -You’re several months behind the curve.

        Samsung, Amazon (Kindle) and a plethora of other device makers have increasingly been removing Google features (esp. search) from Android. That created a problem for Google. That’s the OLD story, which you seem to believe is the FINAL story. (Samsung playing offense, Google defense.) But Samsung is happy with this state of affairs: It has a free OS and can modify it in whatever way that it wants to.

        HOWEVER, Google is now responding to these trends by developing a new version of Android (a merger with Chrome, which I referred to as Chromedroid) that will limit the ability of Samsung, Amazon and others to undermine its revenue stream. This new OS has not been announced by Google, which is why you aren’t aware of Google’s efforts and see it as beleaguered.

        The fear by Samsung is that the new Android/Chrome will favor Moto phones, which would leave Samsung out in the cold. So Samsung is developing its own Tizen OS.

        If Google were not working on Chromedroid in the lab, Samsung wouldn’t need Tizen to develop its own ecosphere, app store, media store, etc. It needs Tizen so that Chromedroid doesn’t favor Moto and kill the sales of Samsung devices.

      • JohnDoey

        The last major new snartphone feature for me was Garage for iOS — a full music and audio production system that runs on iPhone 4S, featuring 8 stereo channels of audio or MIDI, velocity-sensitive touch instruments, and compatibility with hundreds of music and audio hardware accessories. This enabled me to write and record songs anywhere, with about 500 grams of gear: iPhone 4S plus Apogee MiC. Once the songs are written, the GarageBand files open up in Logic on a Mac for mixing and release.

        Not sure why you are evaluating the stock device only when the purpose of a computer is to run apps.

      • Kizedek

        These are really good examples, thanks. I am constantly amazed at some of the apps I come across for iOS. I hope others are taking note.

        Some iOS critics will always say that this or that app or type of app is also available on Android; but one has to question how useable or deep they actually are, given the native APIs of iOS that are parallel to the desktop OS X APIs. Developers for iOS are getting very creative and innovative.

        I have found myself performing whole areas of computing/work on iOS alone, and completely foregoing the desktop for some things. Such as finances: Budgeting, expense reports, accounting, invoicing, bill paying, etc. All done on some great iOS apps that include all kinds of reporting and tie into Freshbooks, etc.

    • Davel

      How is the iPhone 5 evolutionary while S4 is iterative?

      Both have better cameras, both new software, yada yada yada

      The difference is Apple has iTunes, Siri, iCloud, maps and Samsung uses Google services.

      This is the next Samsung phone and the last 2 sold well. This will too.

      • Sacto_Joe

        The form factor was markedly different for Apple. Not so for Samsung, although it is a bit uglier….

      • Tatil_S

        Well, evolutionary and iterative could mean the same, so I don’t know what Sacto_Joe meant by it. However, if the argument is the step between 5 and 4S is greater than the step between S4 and S3, we could say iPhone 5 added LTE, a relatively major feature that 4S did not have. I am not sure what S4 added that S3 did not have. Of course, feature matrix based design is not what brings great success in consumer electronics. What matters is overall user experience, so these types of feature comparisons are for geeks and clueless marketing departments to argue over.

      • SSShu

        I think the big difference would be the spec bump and the extra array of sensors. The rest of the stuff can be obtained via patch/app/jailbreak or whatnot if one is resourceful enough.

  • Sacto_Joe

    Horace, regarding your chart on shipped phones:

    1. I noticed that your chart doesn’t include data from Apple’s Q1. I’ve read elsewhere that Apple outsold Samsung in Q1, and may be outselling them this quarter as well. When can we expect to see this chart updated?

    2. How do you generate your info for Samsung if they don’t supply real numbers, unlike Apple? We know from the trial that their intimations of sales are highly suspect. Maybe you should give estimates a high and low range on your charts, or at the very least tell us what the margin of error is.

    3. It would be helpful to differentiate between comparable smartphones. Perhaps the top of the line phones could be broken out of the total, since that’s where Apple truly competes.

    • Bernard Clark

      Your request #3, is at the heart of this brouhaha, if not the soul & only valid comparison! The comparison that Apple management is watching is how much profit does each shipped phone produce.

      Samsung has the processors to pay off, the Android operating system, and for the old phones, the second source for the displays. Technically, Apple doesn’t have as much profit drag on it’s components & software + it has it’s sunk investment in the Apple stores for distribution & it has the cachet to demand a higher ASP… Net: “It’s the profit stupid!”

      However, my executive management training says Heir Doctor Professor Mr Cook has only one management strategy to follow: “View with alarm!” And act accordingly.

    • JohnDoey

      “Smartphone” is a meaningless word.

      If we are dividing the phone market at all it should be between profitable phones and unprofitable phones, because the latter are essentially marketing. If you want to be the #1 phone brand by volume, give away enough non-profit phones and you are there.

      The all-time ranking of models is good:

      1. iPhone 5
      2. iPhone 4S
      3. Galaxy S3
      4. iPhone 4
      5. iPhone 3GS

      … that tells the actual story of the phone market right now. It shows why Apple is the leader even though not the unit shipments leader, and it shows Samsung’s success (the profitable and popular Galaxy S3) as opposed to Android’s success (a sea of generic smartphones used mostly like feature phones.) This list shows what people are willing to pay for. Everything else is noise.

      • jb

        What have you ranked by there and where did you get that from?

      • JohnDoey
      • jb

        Ah, okay. Looks like that’s only one quarter and not all-time. Would be interesting to try to go back through their data and add all sales of the same model together.

      • Sacto_Joe

        It’s “only one quarter” but it’s the latest quarter. And his larger point – and mine – still stand: Comparing “all” smartphones against top-of-the-line smartphones is disingenuous and highly misleading. There’s also the whole issue of accuracy in these numbers. Apple literally tells us how many of each product category they sell. Who else does? So we’re left with “estimating” those numbers, which means there’s a potential for large margins of error. True, it’s margins in both directions, but if it’s sufficiently large, which we can’t tell from Horace’s otherwise-excellent charts, then it swamps reality.

        And note that these estimates are used shamelessly by Apple’s competitors to pummel Apple for “loss of market share” and so forth. So it’s not inconsequential.

      • jb

        Sure, I was only addressing the phrase “all-time ranking” used in the parent post.

  • http://alexandersmith.co/ Benjamin Alexander

    “I have my own theory about why the decline happens at companies like IBM or Microsoft. The company does a great job, innovates and becomes a monopoly or close to it in some field, and then the quality of the product becomes less important. The product starts valuing the great salesmen, because they’re the ones who can move the needle on revenues, not the product engineers and designers. So the salespeople end up running the company.”

    • http://alexandersmith.co/ Benjamin Alexander

      The S4 looks like a product that has violently blown past the “Too Good” line.

      • JohnDoey

        That is utter madness. Samsung has not even outsold iPhone 4S, let alone 5. Samsung does not have anything close to the quality and breadth of Apple’s app platform. Samsung does not have enterprise-level security. iPhone users almost all have to have an iPhone. We are loyal not because of fast processors or good design, but because of unique features that no other device has. Most of these features are in the software — both system software and app software. Both are PC class on iPhone.

        The Mac went up against Windows almost 30 years and still takes the vast majority if PC profits. 75% of Silicon Valley and Hollywood are on Macs because of unique features that save/make money.

        There is no “good enough.” That is a myth. We don’t use an i5 processor to run MS-DOS 5. There is a constant evolution of these devices. iMovie enabled a whole new class of video editor user who cannot use a Windows system no matter how cheap it gets. Windows tracks 10 years behind the Mac at best. Microsoft Office (1985) and WorldWideWeb (1990) still represent the vast majority of Windows computing.

        So there is no such thing as a new Galaxy phone that obsoletes iPhone, no such thing as a new Windows PC that obsoletes Mac and iPad. The Apple devices and most of all system software and app platforms are all many years ahead. Apps are ported from Apple to elsewhere later. The Windows apps of the 90′s were Mac apps of the 80′s. Windows 95 copied 7 year old NeXT, Windows Vista copied 7 year old Mac OS X.

      • http://alexandersmith.co/ Benjamin Alexander

        “Too Good” & “Good Enough” mean something different in this context. I think this episode of TCP covered the concept:

        http://www.asymco.com/2012/09/29/the-critical-path-56-strategic-disadvantages-a-discussion-with-james-allworth/

      • JohnDoey

        It still is meaningless.

        The Mac not only survived IBM, Compaq, HP, Dell, and Lenovo, and Scully, it thrived. Too many people end their PC industry analysis is 1998. Since 1998, the #1 desktop and notebook have always been Apple-branded. The majority of PC profits since 1998 went to Apple.

        The iPod also thrived through hundreds of generic brands and no Scully. The 1986–1996 Scully-led Mac decline did not happen to iPod, because — no Scully.

        There is nothing that Samsung can do to Apple that Apple hasn’t already had done to it and thrived.

        And my point still stands. People buy Apple products specifically to do things that generic products like Samsung and HP cannot do. The generic products track years behind. Users get spoiled for other platforms. I expect to be able to run a pro music session from my iPhone. Samsung has nothing like that. For others, it is video or medicine or security or graphics and artwork.

        Phil Schiller just said that 4x as many people switched from Android to iOS last quarter as went iOS to Android. Very few people also switch from Mac/iPad to Windows. Samsung has gained LG, Motorola, and Sony users, not Apple users.

      • http://alexandersmith.co/ Benjamin Alexander

        So you don’t accept Horace’s premise in that post?

        “Disruption theory has taught us that the greatest danger facing a company is making a product better than it needs to be.”

      • Sacto_Joe

        Not what he’s saying. And tell me: How “good” does a pocket computer have to be?

      • http://alexandersmith.co/ Benjamin Alexander

        Good enough to do the job it was hired for. When customers stop upgrading they’re either satisfied, or the device no longer matches their needs.

      • Sacto_Joe

        I guess I should have made myself clearer. In the case of the pocket computer, the device may never be “better than it needs to be”. Consider all the tasks that an iPhone performs that a simple mobile phone doesn’t, and consider that many tasks still await, most of which we are probably not even considering.

        So the answer to my question is actually rhetorical, since there is no clearly defined “good enough”.

      • http://alexandersmith.co/ Benjamin Alexander

        Right.

      • obarthelemy

        I don’t really agree with that chart: it only tracks one “use”; today’s smartphones are used in several different ways by different market segments, say “readers”, “photographers”, “listeners”, “fashionistas”, …. Almost everyone I know has some specific hangup: needs excellent camera, wants small/wants big, wants easy, wants fast, wants cheap, wants good looking, wants resilient…

        I think one of the key differences between Apple and Android OEMs is that Apple try to make a one-size-fits-all device, while Android OEMs in general and Samsung in particular use a portfolio of products to target different segments.

        Also, a disruptive technology may be not so much about “performance” as about “new uses”, and creating a completely different chart, instead of upsetting the old one.

      • http://alexandersmith.co/ Benjamin Alexander

        You’re right, it’s a very generalized chart – a rough representation of a general pattern with technology.

      • Hosni

        @Benj – “Disruption theory has taught us …”

        Creative inventors/innovators cannot as a practical matter put only (let’s say) 75% of their best effort into a disruptive product, because neither they nor anyone else knows what will be required to succeed in a new market that doesn’t already exist, in the face of entrenched and (usually) better-financed incumbents. This disruption theory presumes that innovators possess prior information that only becomes available years after the fact.

      • Sacto_Joe

        One of the best comments I’ve ever read, anywhere. Thanks, John!

      • obarthelemy

        “And my point still stands. People buy Apple products specifically to do things that generic products like Samsung and HP cannot do.” Like what ?

      • Sacto_Joe
      • obarthelemy

        You do reliaze there’s NOT ONE thing about “stuff you can do” on that page, let alone stuff others can’t do just as well.

      • Kizedek

        If one were really interested, I think they would notice that John specifically mentioned at least three industries where iOS is becoming the norm or standard for anything done on a mobile device (which is more and more all the time): Video editing, music and medicine.

        Whole vertical markets and industries are moving forward and discovering new use cases for mobile computing solely due to iOS. This is because Windows and Android *cannot* do them (though, I admit, it does not stop a person from hammering a screw into a wall; so, please, give us all the examples of this on Android if you like).

        In cinema, Directors can use iPads to preview footage, make preliminary cuts, try out different possibilities, organize shots and shot lists on location, make notes, choose specific shots and cuts and send their decisions to production and post production.

        In medicine, it is my understanding, specifically, that doctors are using iOS to check charts, consult with patients, consult with each other in the OR, sling hi-res x-rays and scans around, check prescription and industry databases; not to mention, you can hook hardware to it, such as insulin meters, and perform analyses of data…

        In music and the arts, it is my understanding that cutting-edge DJs and artists and musicians are constantly finding new uses for iOS devices, and are not pursuing Android or Windows for anything similar — unless of course they are putting together a natty event for MS or Samsung.

        In aviation, it is my understanding, specifically, that iPads, because of their reliability, have been given the unique privilege to replace paper charts and that no other platform or device has. And airlines are increasingly shifting to providing iPads as their in-flight entertainment systems because of price, performance and usability.

        Restaurant and travel industry? Teaching professions? Sales? The list goes on. Is this the only site you read? There are lots of examples out there. We are really here to discuss the success of Apple, and not provide endless examples of how we and others use Apple devices and iOS software all day long, every day, ad infinitum. I thought we covered this.

      • obarthelemy

        I don’t think the goal of the site is to “discuss the success of Apple”, but to analyze it in context, which includes looking at the weaknesses. Otherwise this site turns into a great big Apple lovefest, the Apple equivalent of The Free Republic.

        Vertical markets are interesting indeed. Do you have any stats, or just anecdotes ? On the reliability part especially the only objective data I ever saw reported more apps crashes under iOS than Android (http://www.forbes.com/sites/tomiogeron/2012/02/02/does-ios-crash-more-than-android-a-data-dive/). On the anecdote part, 1- the anecdotes you cite are not linked to any intrinsic iDevice/iOS advantage (except maybe for real-time I/O including sound, I’m unclear about that one), and 2- there are equivalents on the Android side (orchestras, graphic artists, outdoor/construction, military…). Horace uses iOS for presentations.. that’s nice to know, I guess, I use Android and Windows devices… I hope that’s nice to know to someone, too…

        Examples and anecdotes are indeed worthless. Data would be nice, and has never been covered.

      • Kizedek

        I have virtually no anecdotes, because I know few doctors and airline pilots. However, I do read news on the internet. You should try it sometime.

        A cursory search just now revealed this industry report (http://industryreport.jacksoncoker.com//physician-career-resources/newsletters/monthlymain/des/Apps.aspx) which states that 80% of Docs are using Apps, and 75% of those have chosen an iOS device.

        A cursory search for “FAA approves Android” delivers a bunch of results about the iPad’s use in the cockpit. The only thing about Android is that there is a weather and information service equally available to iOS and Android users.

        You are not probing weaknesses in Apple and iOS so much as questioning and gainsaying and snidely remarking upon every positive comment someone makes about using an iOS device for whatever prupose, and being happy with it. Your engagement with analysis consists of challenging every comment about someone’s use of their iOS device, and dismissing it out of hand, no matter what is said. Is that “analysis”?

        You are never satisfied; therefore I have stated that you do not appear to truly be interested in the answers you are purportedly seeking. You wouldn’t know what was anecdote and what was truly significant and relevant if it bit you on the nose.

        The data is out there. Go find it and wallow in it to your heart’s content. I have provided some on the most cursory of searches, and such news comes up every day. Just to hopefully put to rest your incessant barrage of comments and whining about anecdotal evidence, etc.

        Now, the data we are more interested in analysing and discussing is the data presented by Horace… NOT “how many more directors use iPad over an Android tablet, or how much higher framerates and efficiency the iPad achieves when editing video, when no-one seriously uses an Android tablet for that in the first place!”

      • Kizedek

        “Horace uses iOS for presentations.. that’s nice to know, I guess, I use Android and Windows devices… I hope that’s nice to know to someone, too…”

        Well, the nice (and interesting) thing to know, is that Horace has been instrumental in developing and testing a presentation app called Perspective. He even releases some of his conference talks via this app. Now, if you happened to be responsible for unique and growing international conference, or all kinds of groups asked you to speak, then, yes, it might be nice for someone to know what presentation software and platform you use; until then, not so much.

        Unfortunately, I don’t have much in the way of anecdotes to share. I know very few doctors and airline pilots and film directors. However, a cursory search of the internet will find you all the data you could possibly desire. You might try it sometime.

        For example, a simple search on “FAA approves Android” reveals a load of stories about how iPads are used in the cockpit. The only item about Android I noticed was that there is a weather and info service equally available to both platforms. Now, either the FAA has approved the iPad for cockpit use, or it has not. Either Android is approved, or it is not. There is no anecdote to it. And, yes, that would mean there is something unique about the iOS platform that this is so.

        Similarly, you can search to find all kinds of industry reports, including the medical profession. What we are interested in is how iOS developers and users are pushing the boundaries and transforming everyday tasks and creating new uses in different industries. There are precious few of those stories (documented from good sources) coming from the Android camp — please feel free to share some. So far, Android is the follower when it comes to new use cases.

        Certainly, our goal is “to analyze it in context, which includes looking at the weaknesses”. But the data to be analyzed and discussed here is primarily the data presented by Horace… and, yes, anything that might help put that in context. That doesn’t really include your incessant scoffings and gainsaying every time someone mentions specifically how and why they use an iPhone, or the perceived advantages. That isn’t analysis, and it’s not even really “probing the weaknesses of Apple in context”. It certainly isn’t constructive.

        We are also interested in “best-of-class” apps and how they might fit into our daily workflow. Presentation software from the likes of MS and Google, desktop or web-based, never was best-in-class. By contrast, iOS apps use native desktop-class code and are barely limited compared to the desktop. As I mentioned, some iOS apps are even better than their desktop counterparts.

        We know you can do ‘X’ on Android. I am happy for you that you can also make presentations on Android. However, that is also anecdotal; whereas, I can actually see Horace’s presentations.

        Yes, let’s talk about weaknesses (within reason; comparing every app we could possibly ever compare is a little out of our scope). How about including weaknesses in the Android platform? As far as depth of code and experience, iOS is by definition in a different class (I think Horace refers to this in his latest Critical path). Apple is the only one to have adapted its latest desktop OS downwards, instead of “hacking” something else upwards.

        Android has slid into place as the default mobile OS on mobile devices… *because* there is little real difference between it and what it has replaced. Apple has done something new and taken a new direction in mobile computing since 2007 that still has not been replicated. That is not anecdotal. It really makes all the difference; instead, you choose to ignore or dismiss it, and want to compare the intricacies of thousands of apps, features and everyday tasks that we (you included) may or may not use on a regular basis, if at all. Moreover, this really makes little difference on the ground: because the very best of the very best that Android and Samsung have to offer, in the very best possible light, is only really available to a small percentage of Android users.

      • obarthelemy

        Android news sites talk about orchestras, engineers, even an executive who spent a full year using only a Galaxy Note… It might vary by vertical market, maybe because the OS or platform has specific strengths (the orchestra liked the Galaxy Note 10′s pen, engineers like the rugged versions of Android gizmos, the executive liked the HDMI out and USB in), or it may be by happenstance (so and so VAR chose to develop on a platform because their CTO used it…)

        “iOS is by definition in a different class”. That’s a bold statement to make, especially w/o proof.

        “Apple is the only one to have adapted its latest desktop OS downwards”. Ever heard of Windows RT ? Even Linux-based Android and QNX-based BB10 are vriants of desktop OSes, with a different UI and restricted/sandboxed APIs, which is exactly what Apple have done for iOS, too. There’s even “Ubuntu for Android” if you want full desktop.

        “iOS apps use native desktop-class code and are barely limited compared to the desktop” That’s wildly untrue. Is there a single wordprocessor with sytlesheets, tables, outlines, headers/footers, indexes and ToCs ?

        Saying that Android simply replaces feature phones is delusionnal. It *also* replaces features phones because it can be as cheap as them in the low end, but features- and UI-wise it is also well ahead of iOS at the high end. Rows of icons and app-by-app UIs were OK years ago, nowadays they are not only stale, but counterproductive.
        Compare and contrast:
        http://obamapacman.com/wp-content/uploads/2010/02/DIY-How-to-Make-an-Apple-iPad-Mockup-full-scale-model-high-resolution-351×450.jpg
        http://fs01.androidpit.info/userfiles/1345085/image/chameleon.png

        “because the very best of the very best that Android and Samsung have to offer, in the very best possible light, is only really available to a small percentage of Android users”. No. It’s available to all, but most choose to go for cheaper devices.

      • Kizedek

        “Ever heard of Windows RT?”
        Ever heard of Danger, Kin, Zune, Windows 7 Phone, Windows 8 Phone? By all accounts, RT is a UI layer that is bolted onto Windows 7 to make Windows 8, and that in itself, is nothing new. What MS have not done is to start with a clean slate, re-imagine what could be done, and start with the best pieces, as Apple did. They haven’t even done that with Windows!

        “Saying that Android simply replaces feature phones is delusionnal”

        If by “simply” you mean “only”, then I would have to point out that I did not say that, but concede that Android is on some “smart phones” too. But, basically, the gist of it is, yes, Android is the new default for anything and everything. How do you think it grew so fast? All the OEMs suddenly put it on all their phones in place of what they used to put on their phones. That is simply the conclusion I reach by reading this site (among others) for months and months. Just check out some of Horace’s charts and posts. Practically every other post refers to such a conclusion. Android grew at the expense of every mobile OS, *except* iOS.

        These may all sound like “bold” statements to you. But they shouldn’t be that startling — Apple critics just don’t like to hear them. You love to assume that Apple got lucky, Apple bamboozled all its customers with glitz and design, and now Apple is paying the piper. Basically, you are sticking your fingers in your ears, closing your eyes and chanting such sentiment every time we talk about the iPhone or iOS. Apple worked extremely hard, and is doing a number of unique and interesting things worthy of examination (the thesis, theme and raison-d’être of this whole site).

        The onus is not on us to “prove” that Apple is “exceptional” in some terms that you may finally understand or accept, when all the obvious “success” Apple has had is trotted out on this site every day. Why would one even bother, when whatever is said is repeatedly dismissed or scorned, and subjected to the perpetuation of every sort of myth and ludicrous statement ever devised on anti-Apple sites. Again, I don’t believe you are interested in “proof” of any kind, because you have predetermined what you will accept.

        Just re-read some of the posts on this blog — with a little more comprehension and some open-mindedness, this time; rather than coming here solely to give a knee-jerk reaction and presenting yourself as a troll in the process.

        And, yes, I do believe iOS is “in a different class”. There are more similarities among the approaches and types of APIs, etc. of all the others. Then, Google’s bringing its web expertise to its acquired phone OS (and Chrome OS), and centering everything around the internet and internet services: This isn’t so much an innovation as it is but all they know; Google changed the look and feel of Android as soon as the iPhone came out, but has done little for its underpinnings (and apparently doesn’t care about bringing most devices up to speed anyway). The proof would be in the acquisition and development process, and in the billions being spent on things like Motorola instead of things that really count. And, too, numbers of developers have given their two cents; the ones that eschew Apple, do so on the grounds of “control” and that the learning curve is too steep since they already know java, etc.

      • obarthelemy

        RT is not Modern UI, aka Metro. It’s the ARM version of Windows 8.

        Also, you start with “only iOS is a scaled down full OS”, then when I prove you wrong, you change tack. You got to choose one, mate.

        Why is Apple suing Android like crazy if Android is not competing with them ?

        As for iOS being in a different class, I still don’t think so, and haven’t seen any convincing argument to that effect. It’s particularly bad at handling different resolutions (hint: it doesn’t) ^^

      • ptmmac

        I believe you are correct about RT, but what Windows RT doesn’t have is the marketing muscle to get new code written for it’s platform. RT is dying on the vine as we speak. I don’t think you are wrong in many of your points, but I do believe you have missed one of the underlying strengths of iOS. The code that apps are written on is not just clean, it is written with tools that are designed to run on this OS from the ground up. RT might have that advantage if the code was written, but it doesn’t look like it is going to happen right now. I use an app (net client cs mobile app) to get private data from my accountant that is written in code that runs faster on my phone than the code on my desktop mac. The reason for this is Thompson Rueters wrote the app in Apple’s software rather than in java which is what it runs in on my desktop computer. I promise you that with java as the basis for Android you will not get that kind of well written code. This is a fundamental difference that most users will never know about except for how smoothly it works on an iPhone.

      • obarthelemy

        RT is certainly not a resounding success. But MS have a crabs-like ability to hang on, we’ll see where they are with it by version 3 or 4.I see its 2 advantages as handling keyboard+mouse very well, and running Office… and a whole lot of drawbacks ^^

        As for code:
        - Benchmarks don’t show an Apple advantage: web rendering, games…
        - Java doesn’t have to be interpreted. Specifically, it can be compiled, and optimized for the host CPU, at install time, or at worst JIT (at run time). Recent tests show that language does not really impact performance, as opposed to compiler and code quality, which have a huge impact. (random link: http://www.stefankrause.net/wp/?p=4)
        - Don’t forget current ARM processors include the Jazelle instruction set, which allows them to execute many Java opcodes natively.
        - Informative discussion about that issue: http://stackoverflow.com/questions/8010691/are-programs-written-in-java-for-android-slower-than-equivalent-written-in-c-emb

      • Kizedek

        Re: RT — Fair enough, mate.

        Not trying to change tack — just as confused as everyone else, about a number of MS communications and PR decisions. Here’s a bit from a CNet article highlighting the confusion between Windows RT and WinRT:

        “What does “RT” stand for?

        As with Windows NT, Microsoft has yet to clarify what “RT” actually means. Why on Earth Microsoft decided to name the ARM-powered version of Windows so ridiculously similar to the abbreviation for Windows Runtime, WinRT, is beyond the abilities of mere mortals to decipher.

        Wait, what? Windows RT and WinRT aren’t the same thing?
        The short answer is, “Nope.”

        The long answer is, well, longer. Windows Runtime, also referred to as WinRT, runs on both standard Windows 8 and Windows RT. Runtime is the technical term for the engine that powers the new Metro apps. It’s not the first Windows Runtime. “Runtime” refers to the collection of application programming interfaces (APIs) that allow developers to write software that can interact with the hardware and each other.”

        http://reviews.cnet.com/8301-33642_7-57454524-292/just-what-is-windows-rt-anyway-faq/

        So, Windows RT is “Windows Lite”? OK. That helps explain the 8/16 GB it takes up on the Surface.

      • Guest
      • obarthelemy

        You’re funny.

        “Samsung has not even outsold iPhone 4S, let alone 5.”. See the chart in the article ?

        “Samsung does not have enterprise-level security”. Not heard of Knox ?

        “We are loyal not because of fast processors or good design, but because of unique features that no other device has”. Like what ?

        “75% of Silicon Valley and Hollywood are on Macs because of unique features that save/make money.”. Source ?

        “Windows tracks 10 years behind the Mac at best. Microsoft Office (1985) and WorldWideWeb (1990) still represent the vast majority of Windows computing.” Isn’t MacOS/iOS based on Unix (1969) ?

        I could go on :-p

  • poke

    I suspect that the speculation over the S4 – which was different from speculation over other products mostly by having an extra level of meta (many articles about how speculation over the S4 is now similar to speculation over the iPhone) – and the abundance of articles asking whether Samsung is the “new Apple” were part of Samsung’s marketing blitz leading up to the event.

    • JohnDoey

      Also there were many advertorials. Editorially, WSJ was trolling for a piece of Samsung’s ad spend and so were many others.

      • obarthelemy

        Appel still get a lot more free press than Samsung, so that complaint is very disingenuous.

      • Kizedek

        Sorry, not following you. Please explain.

    • Sacto_Joe

      And boy, did that ever blow up in Samsung’s face, when it came time to deliver….

    • obarthelemy

      I found at the time a lot of the S4 speculation centered on the S4 going more mainstream: LCD, no SD, no plastics. Samsung stuck to their guns, which can be characterized as wise or cowardly :-p. From my understanding, if they were to go maintream, they’d probably launch a new product line, and see if it stuck.

  • http://alexandersmith.co/ Benjamin Alexander

    Samsung thinks its marketing isn’t good enough. Apple thinks its marketing is. Maybe too good if you consider how often products are supply constrained.

    I think both companies are probably right. Apple’s been producing great advertising for decades, focused on a relatively homogenous set of markets, and its accrued to the brand. Samsung has to catch up.

    • Sacto_Joe

      I have no problem with Apple’s marketing. Their PR is another subject, and may be the one area that’s really suffered with the passing of Steve Jobs.

    • obarthelemy

      I don’t think Samsung is selling on brand much, but rather on the devices themselves, on price, on advertising and on push at the sales point.

      On the devices side, they have a few distinctive technologies or products. AMOLED and pen are the two major ones, but they are contextual: most people don’t need pen input (though those who do need it badly), and AMOLED is good for text, bad for pics and vids. Not enough to sustain the sales they want.

      This makes them more vulnerable, and they can’t let up on the push/pull marketing front.

      Personal anecdote: I currently have 2 Samsung devices (a Note and a Note 10), which I got because the Note was far and away the biggest smartphone when I wanted to upgrade my already-big HTC HD2, and because the Note 10 was a good tablet at a good price early this year, when the Nexus 10 was out of stock and no new tablets popped up at CES. Time is coming to upgrade my Note, but I don’t feel any special loyalty to Samsung. I’m in love with AMOLED, but not with Samsung. In contrast, when time came to replace my HD2, I really wanted to stick with HTC because the HD2 turned out to be my first nice smartphone (a Nokia and a Moto before were unreliable pieces of shit). Though I’m very happy with my Samsungs, something’s missing to make me brand-loyal. Maybe image. Maybe materials. Maybe all Android users feel that way because it’s as easy to switch brands as to stick with the same one.

      One thing for sure: it’s good to have a large choice, even when looking for a ridiculously large phone. Samsung Note 2, Note 3, Huawei Ascend Mate, ZTE Grand Memo, LG Optimus G, BLU Life something-something will all be available this year at sizes 5.5″ to 6.3″. And I’ll keep all my apps !

  • http://alexandersmith.co/ Benjamin Alexander

    I wonder how much a couple hundred million stickers cost.

  • Pingback: The Macalope Weekly: Mythperceptions – Macworld : INVEST WEB