Samsung (005930) has been a leader in the consumer electronics industry for quite some time, but the Korean company is a relative newcomer in the smartphone market. In just a few short years, Samsung went from dabbling with Android to dominating handset shipment volumes, having sold an estimated 63 million smartphones into channels last quarter and raking in $6.6 billion in profit as a result. While Samsung has taken a lot of heat for copying Apple’s designs, the formula is clearly working — and in a recent interview, a top executive said Samsung is happy to follow other companies’ lead.
The New York Times’ Brian X. Chen penned an interesting piece on the Apple-Samsung rivalry this past weekend, focusing on Samsung’s rise in popularity and suggesting it is the first time Apple (AAPL) has seen a true competitor since launching the iPhone. Chen writes that while Apple focuses on creating new markets and dominating them, Samsung invests heavily in entering existing markets and growing within them.
“We get most of our ideas from the market,” Samsung EVP Kim Hyun-suk told Chen in an interview. “The market is a driver, so we don’t intend to drive the market in a certain direction.”
Many of Apple’s recent products have entered existing markets, but these devices have offered innovation and clear benefits over devices that came before them. The iPhone and iPod are two obvious examples of this strategy. It doesn’t always work as well as it did with the iPhone, of course, but there is always something new and different to highlight when Apple breaks into a new market.
As Kim suggested, Samsung’s strategy focuses less on carving new paths and more on refinement. Samsung’s early Galaxy smartphones are perfect examples. They didn’t really offer any new designs or revolutionary features, but they were great devices that offered subtle tweaks compared to other recent smartphones. By offering numerous different models with varied features that appealed to different consumers — and by utilizing its resources and spending billions on advertising and marketing — Samsung quickly climbed to the top of the industry.
Apple and Samsung are dominating the smartphone market by an unprecedented margin right now, and an interesting shift has taken place. Though Samsung says it is happy to follow the leader, the company also did some leading recently when its Galaxy Note carved out a successful new “phablet” niche in the market. Meanwhile, rumors suggest Apple may begin to do some following with a cheaper iPhone model and possibly a phablet of its own.
Both strategies have merits and both have led to tremendous success for these two technology giants. As exciting Apple and Samsung have made the smartphone market over the past few years, things will heat up even more as each company’s strategy spills into the other’s territory.[bgr-post-bug]
