I’m fascinated to watch vendors re-learn expensive lessons in the personal technology market. For instance at Mobile World Congress (News - Alert) in Barcelona this week Samsung launched two stunning phones, the Galaxy S6 and Galaxy S6 Edge - and both are far superior to the iPhone on paper. And it isn’t even a close call, for the money the Samsung products are clearly superior but I don’t think Apple (News - Alert) has anything to really worry about. The reason is a lesson we learned very expensively in the Automotive Industry, with luxury products it is more about the status and experience than it is about the product.
Let me explain.
To compete with Luxury cars, initially GM and Ford, and eventually Toyota, Nissan, and Honda (News - Alert), created special brands and wrapped them with special services. Most recently it was Toyota creating Lexus, Nissan creating Infiniti, and Honda creating Acura. These luxury brands had dealerships which had far more luxury customer services and once you get used to the additional service and attention that you get from a luxury brand, it is tough to go back. For instance we went to look at Corvette’s a few years back and my wife, upon entering the Chevy dealership, took one look around and said there was no way she was buying a Chevy.
Mazda tried to buck the trend and even though they are second only to Toyota in quality, their Amati luxury car line failed - even though it was significantly cheaper than a comparable Lexus or Acura. Folks were paying extra for the status that comes with a premium brand and weren’t interested in a deal if it meant giving up that status.
Samsung Galaxy S6 and S6 Edge
The new products from Samsung are very impressive. They use a faster type of memory that should lead to faster app loading. They have stunning OMLED displays that make other display types look dull in comparison. They have fast charging batteries (4 hours in 10 minutes) often thought to be critical to Smartphone users. They support the two most common inductive charging standards - so they should charge on the new Starbucks charging tables (if Starbucks ever turns them on). They are also using BlackBerry to enhance their Knox security effort giving them a potential significant security advantage.
The phones also have a fast capture camera which should get you shots that other’s miss (just tap on the camera button twice and the camera is ready to go). While Android (News - Alert) often looks like a poor copy of iOS, they run Android Lollipop which looks more advanced than iOS does today. Their payment technology, Samsung Pay, will work with magnetic strip readers, making it far more useful today than either Apple Pay or Android Pay. Oh, and the phones are stunning to look at.
On paper the iPhone (News - Alert) just can’t compete. But…
But the iPhone comes with Apple store support which is unique in the industry. In addition the Apple brand is synonymous with Luxury and exclusivity (this last is kind of funny given how many people have iPhones). You go into an Apple store there are people that will set up your phone for you, answer questions, and, often, they’ll even swap out your broken phone for free.
Folks that have an iPhone show pride in the device and brand, they don’t get into arguments about features because the iPhone, to them, is a feature unto itself. It says they have arrived, they are part of the elite and that they stand with the top of their class.
You see with the iPhone a big part of what people are buying is status and the overall experience, not just in store, but with the integration with the Apple Apps and how people perceive the iPhone. You can’t overcome this with features you can only overcome it by creating a better experience and Samsung hasn’t even really tried to do that yet.
Wrapping Up: The Galaxy S6 Family Beats the iPhone but…
But I doubt the majority of the market will care. As long as the iPhone is good enough it’s other advantages in terms of brand, experience, and status should allow Apple to hold Samsung back. If Samsung is serious about taking the high ground and going after Apple they’ll need to create a premium brand and wrap it with a premium experience. Surprisingly in this post Internet world and with a cell phone that shouldn’t be that hard but it does require a substantial investment and apparently that remains a bridge too far for Samsung.
That doesn’t mean there is no risk for Apple however, they can’t drop too far behind or much of the status they have, particularly with young buyers, will move to trendier products. So the new Galaxy line from Samsung puts Apple on notice that they’ll need to up their game or be left behind. But that is in the future, for now, the iPhone stands alone as the premier smartphone in the segment. And only if Samsung can challenge on status and experience can their technology advantages come into play to create a knockout punch.