In fact we should have been looking at Samsung. Though its construction and other non-electronics divisions such as insurance may as well be separate companies, within its core electronics businesses Samsung displays an astonishing ability to maintain coherence across a wide range of activity, and shows no sign of slowing down its adjacency moves. In the 1990s there were those of us who dismissed the Korean conglomerate as too unwieldy and incapable of real innovation. We need to think again.
There are significant differences between the two of course, but isSamsung becoming the more sought after of the two? Is Samsung becoming what Appleonce was, a company that everybody looks to as a model?
That also begs the question of exactly what kind of model people believed Apple used to be. It looks as though Apple is about to lose its most admired company status, an award it has held for each of the past five years – in fact for the full life of the iPhone. And the iPhone has a lot to do with why Apple became so admired.The iPhone changed Apple and changed our ideas about how a business can function.
Want to enter new markets with new products? Those are adjacency moves, outside your core competency – do it? And while you’re at it scale up your business through community (Apple’s apps developers) rather than capital investment.
That’s what made Apple so admired and that admiration was reflected in people’s search activity. “iPhone” is still a benchmark for most searched product.
If you look at global search interest now, people search Google for “iPhone” about twice as much as they search for “Apple” the brand. Search interest is like a popular vote for Apple – or the iPhone, every day.
If you look at the first graph (on page 2) you will see Apple (blue), iPhone (red) and Samsung (yellow) plotted against each other. Search interest in “Samsung” long ago exceeded search interest in Apple.
And you can see in the second graph it has now reached more or less the same levels of interest as we see in “iPhone”, except when there is a spike around an Apple product launch.
So is Samsung approaching the same status of being universally admired. At Mobile World Congress in Barcelona this week Samsung walked away with a handful of awards, as it did last year. Clearly to a jury of its peers Samsung is very much admired, not just for phones but also for its infrastructure innovations.
They won best device manufacturer and best Best Mobile Enabled Consumer Electronics Device for the Galaxy camera, and Best Mobile Infrastructure for Smart LTE Networks (they also won the CTO Choice award for their LTE technology).
Actually, the difference between the two makes a comparison unfair onSamsung. Apple is much less diverse and arguably worse positioned for the next generation of connected devices such as the TV.
In the US, highly admired companies like Apple and Google are also highly specialized and dominant on a single track – they also tend to steer clear of manufacturing in favor of design and software. That means they have done some phenomenal customer engagement (iTunes, Apps Store, Play, Google +) and earn what might seem like easy dollars.
That’s great as far as it goes but Samsung makes things. It sells 31 million flat panel TVs a year, making it the world’s largest by market share. So while Apple and Google dream about a role in TVs, Samsung is a dominant force.
Samsung also spends research dollars on the nitty-gritty of infrastructure and components, positioning itself against low cot producers in 4G infrastructure.It is also a pioneer in physical storage devices. It has a 40% market share inDRAM and NAND Flash where companies like Sony and Apple are its major customers. It has 26% of the global LCD market and 97% of Active Matrix OLEDs.
Market researcher IC Insights has predicted that Samsung will become the world’s-biggest semiconductor chip supplier by 2014 when it surpasses Intel. For the ten-year period from 1999 to 2009, Samsung’s compound annual growth rate in semiconductor revenues has been 13.5 percent, compared with 3.4 percent for Intel
Hewlett Packard, DELL, Verizon and AT&T are all major customers for Samsung components. Samsung meanwhile is supporting the development of the Tizen OS for mobile phones, an HTML 5 based open source project that will shift the balance of power in mobility away from the device app store to the networks, a move that looks set to be the next disruption in smartphones. Samsung is restless, jut like Google.
It is also becoming an astute user of social media (dating back to 2010 and its rise in public sentiment) and advertising, showing the world that Asian companies can also hire smart creative agencies. Apple sits above social media.
In fact Samsung have also moved into ad platforms (how? – Hire someone in the Valley) and are now looking at a content strategy to support their devices.
Samsung is in fact what American companies should aspire to be, ranging across products and components and bringing employment and prosperity to people who engage with it.
When Nick Vitalari and I wrote The Elastic Enterprise we focused on Apple and Amazon as exemplars of the new, post-core competency strategy we outlined – radical adjacencies coupled to complex strategic options management.