Before Steve Jobs came back to Apple, technology was becoming less and less exciting. Since the release of Windows 95, nobody was really lining up for much of anything, nor were they waiting for a new whatever to come out.
We used to get excited about the new cars coming to market and there were times we got excited about TVs and sound systems.
But prior to Jobs, we kind of let the technology market drift to beige boxes and DRM strangled devices that most of us couldn’t get to work.
Post Jobs, the market has returned to a design focus, and while clearly Apple dominates the markets they play in, people get excited and line up for smartphones and some computers again (granted mostly iPads) but even the Nexus 7 and initial Kindle Fire products sold out.
Granted I wish more firms emulated Apple better, and I’m very worried that a post Steve Jobs Apple is more focused on litigation than in creating magical products. But I think the market deserves a little magic and I know it will be deadly dull without it.
It’s not that I don’t think Samsung could create excitement; it’s that I doubt they will, and unless this is fixed I think it would be better for the technology industry if Apple won.
Let me explain.
When Cars Were Exciting
I was at the Blackhawk Museum over the weekend and you really get a sense for how much the automotive market has changed for the worse over the last 100 years. It started off being market that created amazing and fanciful vehicles, and up through the 1960s there were a ton of little car companies competing with the major firms to create ever more beautiful moving pieces of art.
Then the Japanese entered the market and they made incredibly good copies of cars from Jaguar, GM and Ford and the market flipped to being more focused on cost than on creating wonder. Granted this was helped by a near brain dead focus on creating safer and more environmentally friendly cars with the end result being really ugly cars with very inefficient lower powered engines.
The 1970s were defined by ugly boat like cars which ran poorly, frequently broke down, and lacked the power to get out of their own way.
The 1980s were a little better and the 1990s improved a bit as well, but then the U.S. companies seemed to lose their way and most almost failed last decade. Currently, there are few cars that exciting out of GM, Ford, or Fiat owned Chrysler but there are some interesting things coming out of Toyota (Lexus division), Tata (Jaguar Division), Tesla, and Fisker. It is interesting to note that Lexus and Jaguar now top the industry in customer satisfaction scores. Korean company Kia has the top car (Sportage).
I think Samsung is likely to take the technology industry where cars went in the 1970s, which isn’t a good place. Using the Kia example doesn’t have to be a regional thing; clearly Toyota and Nissan are stepping up as well. But right now I don’t see Samsung driving excitement just slipstreaming on the excitement Apple creates and I think that will lead to every cheaper crap and away from where we are.
I was in competitive analysis in years ago and one of the cases we studied was Toyota vs. GM. What is interesting how fast the car industry went to hell and who fixed quality first. In the 1960s, Japanese cars were mostly crap. But they were very affordable and the car industry operating on a five-year development cycle, seeing folks buy these crappy cars responded with crappy cars of their own. Thus we had the Ford Pinto, Chevy Vega, Cadillac Cimarron, Lincoln Versailles and the Chrysler K cars.
These cars showcased that U.S. car companies could build crap better than any Asian company.
At the same time, Toyota, Nissan and Mazda improved their quality and suddenly the high mark in quality was no longer set in the U.S., or most of Europe (Porsche and Mercedes were exceptions) but from Asia.
But few, if any, of these cars were very collectable or iconic.
They were relatively reliable cheap cars. Samsung currently builds attractive appliances, which generally improved on GE designs and typically fall below market averages in customer satisfaction. They make good inexpensive TVs that few get excited about, and they make the closest thing to an iPad clone outside of China (which is currently awash with iPad copies).
They even have a cheap iPod touch clone in market.
They don’t assure customer experience and do improve on Apple hardware designs, but they don’t really improve on the experience and seem to exist in the current market as a cheap Apple copy with benefits.
Wrapping Up: Apple Becoming GM
Now my premise is based on Apple remaining Apple and continuing to drive the market, but there may be evidence that Apple is no longer doing that, and that they may be increasingly forced to build the technology equivalent of the Vega. The iPhone 4S really isn’t that competitive with current top end phones from Samsung and it looks like they are starting to chase, with the iPhone 5, the market rather than lead it.
If that’s true, backing Samsung over Apple might lead to a Toyota-like resurgence more quickly, and while the end result won’t be as good as last decade, it could be far better than the next couple of Apple led years might otherwise be, if Apple starts bringing out Vega-like products again (those that bought from Apple in the 1990s may remember that Apple was defined by attractive crap back then).
In the end, an Apple slide may be unavoidable. If it is, Samsung may represent the only path. I just hope this view is inaccurate, because like many of you, I enjoy the excitement of a new Apple product.
President and Principal Analyst, Enderle Group
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