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Do the iPhone or Galaxy S matter anymore?

Do the iPhone or Galaxy S matter anymore?
The big news today was that we finally got a date when it is expected that Samsung will be announcing the Samsung Galaxy S7. The big news from last week was that while Apple saw growth in its earnings call, it is expecting that iPhone sales will remain flat rather than see growth, as Wall Street demands; and, Samsung noted that there was a "slowing demand" for smartphones when it announced a slight decrease in smartphone sales during its own earnings call. 

Both Apple and Samsung are facing the same market pressures and troubles. The market pressures are frankly somewhat absurd. Apple sold close to 75 million iPhones in Q4 with overall revenues of just under $76 billion. Apple also has enough money in the bank where it could give away all of its products for hundreds of years and still be in business. Samsung on the other hand had overall revenue of $44.2 billion. This is sort of the mirror of the numbers we saw for a while with Windows Phone. 

Microsoft and its fans would trumpet numbers claiming huge percentage growth, but that's pretty easy to do when the numbers start out small. If you sell one million devices in a year, it may sound nice to claim 130% growth, but in reality that just means you sold 1.3 million devices. When Apple or Samsung add that same amount of growth, it's not terribly impressive, because the percentage is far lower. 

Now, this doesn't mean that Apple and Samsung shouldn't be trying to grow, nor that investors shouldn't be asking for growth. I just think thinks should be put in perspective. Of course, if there's one thing that investors and Wall Street don't understand, it's perspective and mitigating expectations. When your life is run by capitalism, nothing less than growth is acceptable. 

Growth barriers


So, how do companies as large as Apple and Samsung grow? I'm sorry to say, but the flagship iPhone and Galaxy S devices are not the answer to that question. 

The high-end market for smartphone is completely saturated. In Samsung's recent earnings call, the company said it "aims to reinforce its market leadership and drive growth with differentiated and innovative products." The trouble with that statement is that Samsung has been using the same tactic of trying to use differentiation and innovation to drive sales for a while; that's the definition of what all of the Edge devices are. Even so, the company has seen a drop in smartphone sales. 

Do the iPhone or Galaxy S matter anymore?

The vast majority of users in developed nations who want a high-end smartphone already have one. Sides have been chosen and the war is over. Sure, you'll still see people arguing one side over the other, but this is little more than tribalism. At this point, if you go into a store and buy a new iPhone or Android flagship, you're going to get a device that can do everything you want it to and probably more. Now, more than ever, your choice in smartphone is nothing more than personal preference because Android and iOS offer top-level experiences. 

Differentiation and innovation may help get the most hardcore fans to upgrade faster, but it's not really driving growth. Of course, that leads to troubles when manufacturers try to keep growing. Carriers and Apple have tried to wring out more sales (and revenue) by pushing users towards getting new phones every year with various upgrade plans, but that's a minor measure at best. Apple was also hoping that China would be a market that would help extend its high-end market reach, but China's economy has taken a turn, so that plan isn't working out so well. 

Differentiation and innovation may also be farther away than most think, at least for mobile devices. Just think about it - what new feature in a smartphone would be considered revolutionary? A leap in battery life would meet that standard, but it's more likely we're going to get faster and better recharging options before we get legitimately longer battery life. Foldable smartphones might be revolutionary, but we're still a few years from those being widely available. The best bet for revolution beyond that would be more dependent on devices that your smartphone would connect to getting more popular, either in TV, automobile, or Internet of Things (IoT) spaces. 

Emerging markets


As we've been talking about for years, the real growth opportunity for smartphone makers is in emerging markets like South America, India, and Africa. Unfortunately, when the conversation shifts to emerging markets, the iPhone, Galaxy S, and other high-end flagships don't matter anymore. Even more unfortunate, the growth opportunity in these regions isn't something that can be seized simply by offering the right device at the right price. 

The rise of low and mid-range devices has certainly helped, especially in regions like Brazil and India, because there has been a lot of investment in the infrastructure needed to make the most of those devices. There's a good reason why Google has been investing in Project Loon and why Facebook and Google have both been looking into providing Internet access with drones. A smartphone is only as good as the Internet connection available, and only as good as what a user can afford. Low-end devices getting better starts to sort out the latter issue there, but building the networks is a long and expensive process. 

While we're waiting for those networks to be built out, smartphone sales may not move too much. Of course, growth in the mobile space may not be completely dependent on the smartphone. 

New devices


Apple has been spending a lot of time over the past year talking about the new device categories that it is going after. The Apple Watch was released, then came the iPad Pro along with the Apple TV. There have also been consistent rumors that Apple is working on a car, and Tim Cook has expressed interest in virtual reality (VR) technology. Apple knows that smartphones and traditional tablets probably don't have much growth potential, especially since the company would not go after the true low-end market because that would damage its brand as a premium company. 

Samsung has been doing much the same, but it's harder to list Samsung's offerings because the company tends to have a finger (or five) in every pie around. Samsung has TVs, appliances, Internet of Things devices, smartphones, tablets, hybrids, Chromebooks, laptops, cameras, wearables, VR devices, and more. Focus has never been one of Samsung's strengths, but at a time like this, that might not be so bad because it will have a headstart on paving the way in the next big market. 

Do the iPhone or Galaxy S matter anymore?

The most likely segments to be the next "big things" are VR (if the cost and use-case can be sorted), cars, TV (especially if Tom Wheeler can #unlockthebox), and IoT. The interesting nexus point for all of those devices is with mobile. High-end VR will run through a PC or gaming console, but average VR is being sustained by smartphones. The two fights in the auto space are self-driving cars, and whether Apple Carplay or Android Auto can make connecting your phone to your car's dashboard as seamless as possible. The smartphone is probably the best controller for new TV systems. And, your smartphone will likely be the control hub for IoT as well. 

The new lock in


None of these new segments will spur growth in mobile, but they will certainly create stronger lock-in. As is, Apple, Google, and Samsung can try to lock in users through cloud services, content services, and app investment. But, all of that is on the software side, and can aide from losing money on app investments, most of that data can be switched relatively painlessly. However, it may not be so easy to change your car's software from Carplay to Android Auto if you want to switch smartphones. Similarly, if the appliances in your home communicate more easily with one platform over the other. 

Apple and Google are working hard to extend the reach of iOS and Android beyond just mobile devices, not only because there are new device segments to explore, but also because smartphone growth is going to be harder and harder to come by. Soon, the fight won't be for smartphone growth but simply to keep the users that a company has on a regular upgrade cycle and keep users from switching to the competition. That will be a more subtle fight and not as focused on smartphones, but could be just as interesting. 

62 Comments
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posted on 31 Jan 2016, 20:58 3

1. TheBiz (Posts: 232; Member since: 13 Apr 2015)


for most people iphone still matters a lot, galaxy s series is meh for most people atleast in india

as far as im considered what doesnt run on ios is what that matters the most

posted on 31 Jan 2016, 21:08 10

2. Jason2k13 (Posts: 1217; Member since: 28 Mar 2013)


So why wouldn't android matters, when more people use it than ios?

The galaxy S is 2nd place to iPhone, so then again why wouldn't that matter?

posted on 31 Jan 2016, 21:13 1

3. lyndon420 (Posts: 4565; Member since: 11 Jul 2012)


I'm pretty sure he was referring to Android being the one that matters more - "...what doesn't run on iOS is what matters the most".

posted on 31 Jan 2016, 21:18 7

4. Jason2k13 (Posts: 1217; Member since: 28 Mar 2013)


Woops, yeah read it wrong... But the galaxy S definitely matters since its 2nd place to the iPhone, if it's sales that we're talking about.

posted on 31 Jan 2016, 21:30 16

6. maherk (Posts: 4070; Member since: 10 Feb 2012)


Well Samsung sold the most in India last year, his fanboyism level went through the roof in his comment.

posted on 31 Jan 2016, 23:38

26. TheBiz (Posts: 232; Member since: 13 Apr 2015)


well number of samsung smartphones is lesser than numver of phones from micromax

and they sont get the same treatment as other flagships

posted on 31 Jan 2016, 23:38

27. TheBiz (Posts: 232; Member since: 13 Apr 2015)


well number of samsung smartphones is lesser than numver of phones from micromax

and they dont get the same treatment as other flagships

posted on 01 Feb 2016, 00:36 2

33. Ahovking (Posts: 710; Member since: 03 Feb 2015)


Samsung sold the most in India last year.. most however wasn't high end phones, i would bet Apple made more money in india than samsung, and with people like investors and developers mading more money from ios than android in india.. IOS matters a lot more than android.

posted on 01 Feb 2016, 08:30

48. marorun (Posts: 3917; Member since: 30 Mar 2015)


Marketing make IOS matter a lots more but android is catching up.

posted on 01 Feb 2016, 01:36

37. CatherineEaster (Posts: 1; Member since: 01 Feb 2016)


I agree, Samsung is the most sold brand in India. Here are some good information about wearable gadgets that you should found good. Check out here hjmt.com.

posted on 31 Jan 2016, 21:31 5

7. Unordinary (Posts: 1961; Member since: 04 Nov 2015)


Because more people can afford $27 plastic smartphones that run Android

posted on 31 Jan 2016, 23:40 9

29. submar (Posts: 481; Member since: 19 Sep 2014)


At least they are smart enough to prevent apple to milk money from them

posted on 01 Feb 2016, 05:36

45. submar (Posts: 481; Member since: 19 Sep 2014)


Buying android phone scene 1
customer:i want a $300 phone
oem:yes, sir

Buying android phone scene 2
customer:i want a metal phone
oem:yes sir

Buying iphone
apple:unless u r are willing to pay at least 649 or get the **** out of here
customer:yes sir

posted on 01 Feb 2016, 11:38 2

55. tedkord (Posts: 12313; Member since: 17 Jun 2009)


Yes, Android cover all the basses. You can get a low end budget phone, or you can get top of the line, like the Note 5 - the best there is.

posted on 01 Feb 2016, 00:34 2

32. Ahovking (Posts: 710; Member since: 03 Feb 2015)


DUDE!!! more people use android because its cheap.. in the West Apple and android is normally tied and keeping in and Apple only sell top end phones and android sells everything from low to high end.. its clear apple's high end phones do so much more better than android high end.

And it does matter.. its just matters a lot less. remember Apple has built a cult around itself, the media adores them and the industry followers them, if apple moves away from the analog jack then so will the industry.

posted on 01 Feb 2016, 01:12 8

36. xchatter (Posts: 13; Member since: 25 Mar 2013)


You obviously are one of the sheep, Comment based on some yellow paper statistics. If you try, you can find all kinds of statistics in favor either to iOS or Android. You have to build your own opinion and explain it to yourself so it does not seem like blind sheep statement without any knowledge of the capabilities of the OSes. I can definitely tell you that Android can do LOTS more than iOS, but you have to be advanced user and know what you are doing(not programmer, but simple enthusiast). I have built various integration from my phone to different other devices and web apps. I have built automation projects, tasks, modifications. And I don't tell you that I build apps(apks). Android just gives you this freedom and choice, you just have to want to do it, and there is a way. Things that are NOT possible with iOS. And this is it. If anyone tells me this is not true, then he simply did not do his homework.
So there you have it. iOS is the simpler OS for the simple needs of users. Android is for the more demanding user group.

posted on 01 Feb 2016, 02:10 3

38. Diezparda (Posts: 874; Member since: 23 Oct 2013)


LOL... I think you forget some US carriers offer some nice contract for the iPhone & upgrade programe. So it's like you're saying Beats headphone is much better than Sennheizer just because it's expensive & does sell more? Well people who don't understand much about audio quality probably pick Beats because the brand is well known through many advetisement, celebrity endorsement, etc... You can't say it much better because it's simply not, depends on how much people value them.

posted on 02 Feb 2016, 04:20 1

61. riteshrkm (Posts: 52; Member since: 15 Apr 2015)


Agree with you ....apple sells so much bcoz its the brand that sells.. people still buy iphone 4s only coz they have to show off the apple logo even whatevr may be the functionality inside.....
Anyday apple is a bigger brand than samsung no matter who wins the functionality battle....

posted on 01 Feb 2016, 03:15 1

40. Macready (Posts: 1146; Member since: 08 Dec 2014)


In thie west, Android sells more and Apple lost ground in all Western areas, except Spain. Check Kantar.

posted on 31 Jan 2016, 21:51 7

11. rd_nest (Posts: 1607; Member since: 06 Jun 2010)


with 1.3 billion people in India, I wonder how many you have in your friend list? knowing what matters for 'most' people in such a large country would need something really special.

posted on 31 Jan 2016, 21:28

5. maherk (Posts: 4070; Member since: 10 Feb 2012)


Well, looking at sales numbers, then yup, no doubt.
Here in Lebanon you ll either see an iPhone or Samsung with the vast majority of people.
There was a time people started going away from Samsung when looking into a mid ranger, mostly went with a Sony or an HTC mini, but Samsung did a great comeback with the A series.

posted on 31 Jan 2016, 21:39 2

8. jesus_sheep (Posts: 262; Member since: 18 Apr 2015)


The only thing keeping me from buying a Galaxy is their audio quality. Samsung phones sound like garbage over the headphones.

posted on 31 Jan 2016, 21:45 9

10. maherk (Posts: 4070; Member since: 10 Feb 2012)


You would've had a point if you were talking about built in speakers, but you lost it when you said over the headphones. Samsung flagships are rated as one of the best when it comes to best smartphones for audio.

posted on 01 Feb 2016, 08:41

51. marorun (Posts: 3917; Member since: 30 Mar 2015)


Compare samsung to
HTC Audio output power and quality and you be surprised.

posted on 01 Feb 2016, 01:11 8

35. johanbiff (Posts: 405; Member since: 31 Mar 2015)


the Wolfson DAC is no joke..sure, the output is not as high as iphone but it sounds ages better quality wise.

posted on 31 Jan 2016, 21:40

9. warrenellis93 (Posts: 200; Member since: 21 Jul 2011)


um yeah, because people will go with what they know works regardless of what they could get cheaper even if the cheaper item is better. its brand recognition and apple and samsung are doing it well. i personally dont like either

posted on 31 Jan 2016, 22:16 1

12. yoosufmuneer (Posts: 1507; Member since: 14 Feb 2015)


They matter alot. People prefer Samsung and Apple devices over any other brand. 95% of the phones I see are Samsung Galaxies and iPhones in my country. HTC desire 626 is quite popular here too.

posted on 31 Jan 2016, 22:16 1

13. dimas (Posts: 2273; Member since: 22 Jul 2014)


Tldr, just relied on the title. Yes they still matter, having the latest technologies introduced makes previous models cheaper. Demand for the latest will increase older model's depreciation value. Win-win for the early adopters and the budget conscious.

posted on 01 Feb 2016, 08:33

49. chenski (Posts: 449; Member since: 22 Mar 2015)


But early adopters only represent a very small percentage of the population

posted on 31 Jan 2016, 22:29 1

15. Awalker (Posts: 1578; Member since: 15 Aug 2013)


The iPhone does. I'm not sure about the Galaxy S series.

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