As Galaxy S4 launch approaches, has Samsung surpassed Apple where it matters most — Marketing Hype?

The real smartphone wars are nothing more than a battle between Samsung and Apple. No one else is even close.

Blackberry and Windows Phone barely rise to the level of also-ran. Operating systems such as Tizen, Jolla, Aliyun, Firefox Mobile et al appear to be nothing more than tools for hobbyists. Across nearly every single market, Android dominates in market share and iPhone dominates with profit share.

Even this is a distortion, of course. While Android and iPhone may lead the pack, one company, Samsung, thoroughly dominates Android. Samsung dominates Android to such an extent that there are real questions about the sustainability of the Android brand and the Android ecosystem.

As Unwired View reported last year and as the Wall Street Journal noted last week, Samsung has grown so dominant that Google is concerned the South Korean giant could effectively swallow the ecosystem. This is not a linkbait assertion. As we discussed last January, “Samsung could destroy Android.”

Only Apple stands in Samsung’s path for complete global smartphone dominance.

Who is winning? Samsung leads in nearly every relevant metric — excepting profit.

Part of the reason for the ‘profit gap’ is because unlike Apple, Samsung sells numerous devices across many price points, including into lower-priced, lower margin markets. Another reason why Apple wins on profit is because unlike Samsung, Apple has full control over its operating system — iOS — and the entire iOS ecosystem. This includes iTunes and App Store, Safari, integration with its OS X computer platform, a massive retail point of presence. Samsung, though a vertically integrated chaebol, is still highly dependent upon Google for Android, for Google Play, for Chrome (and Chrome OS), and even to help expand distribution.

There is another reason, of course, why Apple does so much better on profits: Rabid product buzz.

With Apple, there is a constant stream of news, an unending cry of new product rumors, even rumors of mere product updates. Has anyone actually seen the iWatch? The Apple Television? Doesn’t matter. With Apple, press buzz months and weeks before a semi-official product launch grows and grows, the tech blogs incessantly discuss what new specs, what bold new design will be revealed. All in rapturous language, naturally.

No one comes close to Apple in building anticipation, nor in rousing the faithful. In all the ways Samsung has copied Apple, make no mistake: they desperately want to develop Apple-like buzz. Samsung may mock Apple fanboys but  that’s exactly what they want. Rabid fanboys waiting in line to buy the newest product, delivered from on high.

Samsung is a Marketing Company

Samsung is everywhere, it seems. On billboards, YouTube, Facebook, splashed our television screens. There seems to be nowhere we can go without Samsung touting its Galaxy S smartphone.

Samsung spent a small fortune — an estimated $15 million — on advertising during this year’s Super Bowl. They are spending lavishly at the South by SouthWest (SXSW) show. And, very Apple-like, they are feverishly working to gin up breathless anticipation for their launch later this week of their Samsung Galaxy S 4 flagship smartphone. The launch event will take place in New York’s Radio City Music Hall — and everyone who’s anyone will be there to report back and live blog the entire production. Samsung, naturally, said they will live stream the event — since so many want to join in from all around the world.

No matter what side of the platform wars you find yourself, one thing appears obvious: if Apple does it, Samsung follows suit. Samsung’s aggressive promotion of “The Next Big Thing,” complete with Twitter hashtag (#nextbigthing) even sounds like it was taken straight from the Steve Jobs playbook

Is it working? 

This 2012 year-end report from Asymco sought to understand how much Samsung spends on marketing its smartphones and tablets helps reveal just how much Samsung spends on marketing and advertising overall compared to Apple. It’s not even close.

Samsung advertising

And if you pay close attention to Samsung’s incessant advertising you will also note that Samsung rarely — if ever — mentions Android or Google.

But is it working? All the ads, all the hype? Does it make any difference?

The answer is…sort of.

Samsung sells an astonishing 40% of all devices using Android. Last year, Samsung sold over 200 million smartphones and it has forecast sales of over 300 million in 2013. No one else, not even Apple, will come close to that many.

Samsung is the dominant Android handset maker around the world  and it maintains a sizable lead over its (Android) competition in the critical US and China markets. Nonetheless, all the hype and all the marketing spend may now be a cover for a startling truth. Samsung may have peaked.

In their latest survey of the US market, comScore noted that while the Android ecosystem declined in the US from the previous quarter, Samsung gained 1.9 points. Apple’s iPhone, however, gained 3.5 points. Moreover, as Unwired View revealed last month, Samsung’s Android market share has been in decline for the past nine months.

Samsung-Android-market-share-2011-2012

Of course, these numbers do not predict how well the shiny new Samsung Galaxy S4 will do. Google’s purchase of Motorola has certainly not slowed Samsung down. The very companies that should be able to challenge Samsung, including Sony, LG and HTC, remain effectively marginalized. Apple’s “thermonuclear war” against Samsung earns the company small victory after small victory in court, but Samsung continues selling its smartphones by the millions.

Can Samsung be stopped?

I have to wonder if a few years from now we might see Apple run a series of “iPhone versus Galaxy” commercials like the old Mac vs PC advertisement below.

 

Author: Brian S Hall

Brian S Hall writes about technology, immortality and food for ReadWrite, Techpinions, Unwired View and other publications. His thoughts on the 'smartphone wars' and how these are rapidly de-constructing markets, industries, business models and relationships around the world can be found on his personal site at www.brianshall.com.

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