In the tech industry, every new market starts out with many competitors, each trying to beat the others. In the end, they all drop out except two. In the PC business, it was Microsoft and Apple. The first generation of smartphone saw Blackberry and Nokia becoming the top two. Apple revolutionized the smartphone market and basically rebooted it. A number of big name competitors entered the market at that time. Now, Apple and Samsung are the only two left.
As with the PCs, Apple takes the high road with more profits on high-quality designs, better materials and innovation. Samsung takes the low road with a free OS and plastic hardware. While the two do compete, there is room in the market for both to exist. Apple has been dominating in high end markets since the Mac Classic days and will likely do so into the future. Samsung may not be so lucky.
Samsung dominates the market by creating a cheaper smartphone than anyone else. They have become the Dell of the 1990s. Dell started to dominate because they found a way to make a cheaper PC. The problem with Dell is that someone else found a way to make a PC cheaper than Dell. The race to the bottom is always hard to stay ahead in. Apple creates unique products and does not play in the race to the bottom game.
Like Dell, Samsung does not offer anything really unique in their products. So they have to compete on price. While Samsung is dominating the market right now, they better be looking in the mirror. It won’t take long before another company comes along and creates a cheaper Android phone and take over Samsung’s market share.
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