The genius of Samsung
Farhad Manjoo identifies the amazing success of the Korean giant.
Consider the ‘‘phablet’’. Back in 2011, when Samsung first unveiled the Galaxy Note – a 5.3-inch smartphone that was big enough to be a minitablet, hence the ugly portmanteau of phone and tablet – the world’s tech pundits couldn’t stifle their giggles. Was it a phone? Was it a tablet? Was it a joke?
Smartphone industry blog Boy Genius Report called the Note ‘‘the most useless phone I’ve ever used’’, adding: ‘‘You will look stupid talking on it, people will laugh at you and you’ll be unhappy if you buy it.’’
Gizmodo argued that the Note ‘‘isn’t just designed poorly – it’s hardly even designed for humans.’’ I couldn’t resist joining the chorus. The firm was, I wrote, hoping that ‘‘when you whip a phone as big as the Galaxy Note out of your pants, some dudes will think you’re a god.’’
But the joke’s on me and my wise-guy tech journo colleagues. Confounding our predictions, Samsung sold 10 million Notes in 2012, making it one of the most successful smartphone launches in history.
Then, a few months ago, Samsung launched the Galaxy Note II, an upgraded version with an even larger screen – and it promptly sold 5 million of them, and is on track to sell 20 million over the course of the year.
The Note’s success has spawned a spate of copycats, with phablets becoming the hottest new smartphone category. Over at qz.com, Christopher Mims argues that the phablet is becoming the computing device of choice in the developing world. ‘‘If your budget is limited, why deal with two different upgrade cycles and two different devices, when you can put all of your money into a single device?’’ he argues. Mims believes that the Note’s success may even force Apple to build a rival phablet.
I’m not so sure. Samsung is having a moment, and every one of its rivals visited its enormous booth at the Consumer Electronics Show a few weeks ago to keep an eye on the Korean tech juggernaut. Recently, Techcrunch’s MG Siegler crowned Samsung the ‘‘fifth horseman’’ – the only worthy rival to Apple, Amazon, Facebook and Google, the foursome that dominates the world’s tech markets. Note that Microsoft doesn’t make the list any more.
Samsung earns that spot in part because of its fearsome stats: It is the world’s largest tech company by revenue, and in 2012 it became the world’s leading smartphone maker. According to the market research firm Canalys, Samsung’s smartphone market share in the third quarter last year beat that of Apple, Sony, HTC and Research in Motion combined. It still lags behind Apple in profit – Apple sells fewer iPhones but earns more money doing so – but Samsung’s smartphone proceeds have doubled in the past year, so it may well one day catch its rival.
But there’s something else besides sheer size that makes Samsung so successful, a brilliance exemplified by the way the company stumbled into success with the Galaxy Note: Samsung is willing to try anything.
Actually, it’s willing to try everything. By building dozens of models across a range of product categories – it makes everything from phones to tablets to refrigerators to washing machines – Samsung offers a device for every conceivable market niche.
This flood-the-market strategy isn’t elegant. It can be confusing for customers, a pain for Samsung’s partners, and very difficult for the firm’s engineers and designers to keep up with. It also doesn’t have history on its side. Other firms that have tried the build-everything approach – see Apple in the early 1990s, or Hewlett-Packard over the last decade – eventually begin to lumber under their own complexity.
Samsung’s current dominance stems from its wise response to the iPhone. When Apple’s smartphone began to shoot up the sales charts in 2007, Nokia and RIM, then the world’s biggest smartphone companies, more or less ignored it. Samsung saw the iPhone as an opportunity – it showed what consumers wanted, so why shouldn’t Samsung give it to them, too? Some of the firm’s early touchscreen phones were slavish copies of the iPhone but Samsung’s devices worked well, and they were priced right.
There is something charmingly humble about Samsung’s see-what-sticks strategy. Other tech giants operate according to lofty philosophies. Apple prizes aesthetics and usability, Google cherishes the free flow of information, and Facebook wants to connect us all to one another. Samsung has no such philosophy. All it wants to do is make stuff that we’ll buy. This strategy is an admission that customers, not companies, know best.