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  • When is a Rival Not a Rival?

    December 28th, 2010

    So I read a story this week from columnist Daniel Eran Dilger, writing in AppleInsider, entitled "Samsung to Rival Apple's iPod touch with Android Galaxy Player," and I wondered, all over again: Just what are these companies thinking? Do they not understand the difference between innovation and copying?

    Certainly, a company as successful as South Korea's Samsung ought to know better. They are major players in a number of consumer electronics markets, such as flat panel TVs and Blu-ray players, not to mention the fact that they supply parts for loads of other companies, including Apple. So we have this always-peculiar situation where a company will compete with another in one or more product categories, yet at the same time partner with them in others.

    Now Daniel aptly and succinctly summarizes Samsung's previous problems building competitive mobile gadgets. A Samsung mobile phone is runs pretty well, and their iPhone knockoffs, using the Android OS, are decent as such smartphones go, but not trendsetters. Indeed, Samsung is hedging its bets with its own fledgling platform, called Bada, but there's nothing to indicate that it's a potential game changer.

    Besides, building an iPod touch knockoff doesn't require much creativity. It's mostly about making a smartphone without the phone, with perhaps a slimmer form factor to justify the lack of a few parts. Or maybe not. Besides, didn't they once call the iPad nothing more than a larger iPod touch?

    Now Samsung's 7-inch Galaxy Tab tabloid is said to be the most compelling potential iPad killer so far, with some 600,000 sales reported during its first month of availability. But it has received middling reviews, and suffers from using a platform, the Android OS, that's not yet certified for use on tablets. Or at least that's what Google told its hardware partners, but those partners are clearly so desperate to produce something in response to the iPad that they don't care. Android 3.0 will reportedly be tablet ready, and one hopes Samsung and other tablet makers will be so kind to let their customers upgrade. That's not always a given in Android land.

    It's also not at all certain how well the Galaxy Tab will fare on the long haul, since the launch was worldwide and no doubt reached countries where the iPad was, at that point in time, unavailable. It's not necessarily even cheaper, unless you saddle yourself with a two-year data contract. As you recall, the iPad 3G lets you make a month-to-month deal, one that you can cancel whenever you want without an early termination penalty. That's because there is no subsidy in the purchase price of the iPad. You pay the same whether you use a data plan or not, which is great if you only need one when traveling for limited periods during the year.

    Unfortunately, the consumer electronics industry is largely saddled with this "monkey-see, monkey-do" approach to dealing with credible competition, and Apple is always credible, even if the product in question is a "hobby," such as the Apple TV. Once the basics are duplicated, in part, a few features are inevitably added in a usually failed bid to demonstrate superiority.

    In the days when the iPod was initially taking off, the iPod killer products would often sport FM radios or other features that Apple hadn't included, hoping that would earn the sale, but they didn't. These days, those other tablet computers may sport one or two cameras, not because they can make a difference in the real world, or that they have great video software available, but because the iPad doesn't have them. At least not yet, because it's widely reported (and expected) that the iPad 2.0 will indeed ship with one or more built-in cameras. Whether one or two is an open question, as I'm not convinced that a ten-inch tablet computer is suitable to take photos and movies, anymore than that function is flexibly achieved on a 13-inch MacBook. That's why the MacBook only comes equipped with the front facing camera. It's not that Apple can't easily add one for the rear as well.

    What's unfortunate about all this is that far too many consumer electronics makers are ceding much of the creativity to Apple. They'd rather provide a decent knock-off, with the hope they'll succeed simply by having loads of barely different models from which to select. That causes the peculiar situation where the Android OS might have greater market penetration in the U.S. than the iPhone, but not because any single model or maker sells more units than Apple. It's the total number, and many of those are giveaways, offered via two-for-one sales.

    Indeed, it doesn't seem Microsoft is doing much better with the first Windows Phone 7 devices. AT&T has already begun a two-for-one sale, meaning they can't sell enough of these smartphones at the regular price, and they need to give you an extra incentive to sign on the dotted line.

    Notice, that we don't see two-for-one sales on any Apple mobile device, even if there are occasional modest price reductions, but usually on refurbished gear.

    Is this any way to compete with Apple? So far, the answer is no.



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