In the eight years since the iPhone was first unveiled, overthrowing Apple’s hold on the “cool” factor has often seemed impossible. The smartphone market has erupted with top-level products from numerous manufacturers—with Samsung chief amongst them—yet Apple’s famous emphasis on appearance and their finely tuned marketing machine has allowed them to hold reign over an arena filled with products of equal or superior functionality.
Samsung has spent billions of marketing dollars over the last few years to convince young American consumers that iPhones are the smartphone for hipsters or your mother.
The company most successful at combating Apple’s image has been Samsung, which has spent billions of marketing dollars over the last few years to convince young American consumers that iPhones are the smartphone for hipsters or your mother. They’ve relentlessly mocked and parodied Apple, specifically around the company’s famous product launch events (Samsung unveiled Morethanbig.com to mock the iPhone 6 Plus’s late entry into the phablet market). Despite these frequent and expensive experts, Apple remains the product du jour for an entire generation.
What most American consumers might miss, however, is Samsung hardly needs to be seen as cool. Whereas Apple is solely a consumer electronics company, Samsung is a massive conglomerate representing 17 percent of the GNP for South Korea. They have a vastly more diversified portfolio than Apple, producing dishwashers and refrigerators as deftly as they make oil refineries and skyscrapers—after all, Samsung C&T built the Burj Khalifa, the world’s tallest building. Comparing the companies makes Apple, the most profitable entity in the world, look almost like a chump in comparison.
Even if we just look at consumer electronics end of Samsung, the company makes money even in losing to Apple. 2014 was a fairly rough year for Samsung, with overall profits and sales falling far below investor expectations. That said, the beginning of 2015 has seen Samsung sign a major deal with its lead competition that will likely boost those numbers: iPhone 6s and new iPads will carry Samsung microchips, and rumor has it that so will the upcoming Apple Watch.
56 percent of Apple customers admitted to “blind loyalty” to the company.
That might be surprising news for the millions of Apple customers who might be better described as hardcore cultists. According to Statista, Apple has seen a steady increase of customers who profess to brand loyalty, reaching a high of 90 percent last March (just 77 percent of Samsung owners express a similar faith). What’s more is Apple fanboys know they’re just that—56 percent of Apple customers admitted to “blind loyalty” to the company.
That’s a pretty astonishing feat in a post-recession market with consumer spending just barely beginning to recover. Shrinking wages and a plethora of online retailers have made U.S. consumers far less loyal to any one particular brand: Apple seems to be the largest exception, despite making a generally more expensive product than their competitors.
This is where Samsung has found the largest hole. Galaxy phones are competitively priced and often offer the exact same functionality as an iPhone—hence all those patent wars. What this does mean, however, is Samsung devices will perennially play second string to Apple when it comes to high-end purchasing. This past holiday season, when consumers are typically willing to splurge on themselves and others, saw Apple trounce its competition with 51 percent of new devices coming from Apple.
It’s this notable status as the lead icon of consumer electronics that has the entire gadget world waiting for the release of the Apple Watch. Despite numerous smartwatches released in the last year—including the Samsung Gear—the market is largely being considered unproven until Apple releases the Watch later this year. Even its name—which drops the famous “i” for simply “Watch”—implies the effort to do what the iPhone accomplished back in 2007, erasing prior competition and redefining the market in its own image.
Apple, as always, is happy to follow a cardinal rule in the tech world: Never be first.
Which is something Samsung has never done and likely never will. The Samsung Gear landed with a decidedly depressing thud, buoyed only by its own novelty as the first smartwatch you could buy in a store. But as CES showed, the wearable market is clamoring for a device to lead the way and Apple, as always, is happy to follow a cardinal rule in the tech world: Never be first.
Yet heavy is the head that wears the crown. Apple’s fame also brings notoriety and increased scrutiny. Problems with the industry as a whole are often heaped at Apple’s feet, unfairly or not. Ethical issues surrounding workers rights, tax avoidance strategies, and even the downfall of the Finnish economy are often brought right to Apple’s door, despite Apple being far from the only company to produce these issues.
In comparison, Samsung is likely happy to let Apple take the heat for an issue such as working conditions at the notorious Foxconn factories, a scandal that grabbed Apple unwanted headlines. Samsung’s factories also have questionable ethics, forcing workers into 12-hour standing shifts, unpaid labor, and even forced underage labor.
And if it’s tax avoidance you care about, Apple’s country-hopping plan looks downright puny compared to the family at the head of Samsung. Samsung has a rich history in South Korea of such disloyal practices as bribery, price gouging, and tax evasion. But it’s not simply that Apple has relieved pressure from their competitor: South Korea has cloistered Samsung in an extralegal bubble simply because the nation’s entire economy is tied so strongly to the company who produces a fifth of its gross domestic product.
Despite Apple’s presence as the most profitable and popular company in the world, it’s facts like these which show Samsung to be far more than Apple could ever hope to be. Samsung is massively successful in a huge variety of industries, not just smartphones, and even makes money when Apple makes money through its microchip manufacturing business. Apple grabs the headlines, sure, but with hype comes the potential for disappointment. Don’t let their massive marketing budget fool you: Samsung has far more on its plate than Apple, and while winning never hurt, the underdog is already having its day.
Photo via vernieman/Flickr (CC BY 2.0)