Apple, Samsung and the Emerging Markets

The one thing that really helped Microsoft capture the personal computer market was its strategy to focus on software that goes on computers made by any computer manufacturer from IBM to Dell. That’s been the company’s strategy which has proven great for it over the years. Windows became the platform of choice for application developers due to its great reach in turn making it irreplaceable for the PC users. Apple on the other hand made really great Macs by developing both the machine and the software that goes on it. A semi-closed ecosystem with a handful of application makers (like Microsoft Office) making software for it. Apple found its niche in the cool and trendy crowd consisting of students, designers and artists.

Bring in the mobile space. The very strategy that worked against Apple in computers playing field is now proving to be its most valued asset. Apple is a company that controls end-to-end development of its mobile phone. It controls all three key elements of the phone – hardware, software and the chip component. This gives Apple an unprecedented advantage in providing integrated user experience. Apple is able to remove any friction between hardware and software. Adding the chip development expertise to this provides Apple accuracy in estimating the processor performance and map it to feature development. The out of the box experience that FaceTime delivers is one of the first examples of how vertical integration is going to do wonders for Apple.

The only other company that has all three elements of mobile phone under its control is Samsung. Samsung, the world’s largest conglomerate, has great expertise in chip development and hardware manufacturing. Samsung manufactured phones running Windows Mobile software have been around for a while, but Samsung launched its bada platform for mobile devices in late 2009 to have complete end-to-end presence in the mobile world and Samsung Wave became the first bada based phone to enter the market a few months back. All the elements coming together positions Samsung perfectly to be a challenger in providing vertically integrated experience on the mobile platform.

Now moving on to talk about the emerging markets. Mobile phone market is growing at a tremendous pace in the developing countries. India and China each have more mobile phone users than the total population of United States. If at one end a smartphone costs more than the monthly income of many people in these countries, it is a wannabe gadget for the growing middle class. While iPhone fanaticism is catching up in these countries as well, no one can dispute the unparalleled hold Samsung’s got in the Asian markets. Samsung has one of the most efficient marketing machinery and brand presence in the electronics market out there. This positions it strongly against Apple et al to get smartphone market share in these countries.

There’s still a while to go before calling out the winner in the mobile devices world. Apple, with its genius design and development of iPhone and iPad, has captivated the imagination of everyone from consumers to competition. But it will be interesting to see how Samsung and others fare in there in the coming years and what role the emerging markets will play in deciding the fate of these companies.

2 responses to “Apple, Samsung and the Emerging Markets

  1. Thanks! This is interesting.

    One point about Nokia, they recently divested their component business to STMicro. They no longer own the entire value-chain like Apple and Samsung (we will have to wait to see how vital that will be for the company).

    Nokia’s global presence and that in the emerging markets is undeniable.