Apple vs. Samsung: Galaxy S's Perfect Recipe for Success (Failure)
How Samsung could get rid of the bad luck
Apple Inc.'s rivals have been selling tablets that aim to compete with the iPad, but their year-long conquest has been futile. Hewlett-Packard, the world's biggest seller of desktops and laptops, has given up, opting to send its TouchPads to $99 fire-sales. Even worse is that Samsung Electronics is already facing defeat even before it could put its Galaxy S Tab device on shelves.
UPDATED STORY ON APPLE VS. SAMSUNG, READ Samsung Has Aces Up One's Sleeve in Fight Against Apple
Samsung last week confirmed that it has again agreed to delay the launch of its Galaxy Tab 10.1 in Australia. Earlier this month, Samsung, as part of a lawsuit filed by Apple in Australia, signed a "mutual agreement" not to release the Galaxy Tab 10.1 in the region until the court rules on the lawsuit, although the agreement allows Samsung to release a different variant of the device in the Australian market.
However, just last week, as it was set to release the modified variant of the Galaxy Tab 10.1 -- which some say is inferior to the Samsung tablet released in the U.S. -- Apple again opposed the launching in Australia, saying that the new device still infringes on three Apple patents. Now, Samsung is awaiting a court's decision at the end of September.
Although Samsung is saying these events do not affect tablet sales outside Australia, Apple has filed intellectual property lawsuits -- targeting the Galaxy Tab and Samsung smartphones -- in numerous locations that outnumber those shown in a James Bond movie. And Samsung appears to be on the losing end in these skirmishes.
In Germany for example, a court granted Apple a preliminary injunction that prevents Samsung sales of the Galaxy Tab 10.1. In the Netherlands, a court banned imports of three Samsung smartphones, including the Galaxy S and Galaxy S II, after finding that the smartphones breached an Apple patent. Lawsuits in the U.S., other parts of Europe, and Asia are also ongoing.
Apple in July filed a complaint with the U.S. International Trade Commission, claiming that Samsung's Galaxy phone and tablet computers "slavishly" copy the iPhone and iPad. Apple has asked the ITC to stop Samsung from selling those devices in the U.S.
Out of Luck
Apple has been piling up lawsuits against device makers that use Google's Android platform. But Samsung has the most to lose. For one, it is the top producer of Android devices. Samsung sold five million units of the Galaxy S II in just 85 days, and is poised to sell more than 50 million mobile phones by the year-end.
One more thing. Google, the developer of the Android, has already armed itself in the patent wars by buying IP assets from International Business Machines Corp. and paying $12.5 billion to buy Motorola Mobility Holdings Inc.
While the Motorola sale could help Android avoid litigation and focus on fine-tuning the not-yet-bug-free Android ecosystem, Samsung will now be facing competition from Google itself. Note that while Samsung has barged into the top-five largest smartphone makers, it did not take market share away from Apple. It simply took market share away from Motorola, as well as Nokia and Research in Motion.
Now Google is poised to boost Motorola's smartphones sales in order to recover something from the billions it has paid for the smartphone maker. RIM ended a year-long hiatus and this month has barraged the market with new BlackBerry devices. Handset giant Nokia later this year is also unveiling its Microsoft Windows-based phones.
Even the gods have been playing favorites. Samsung was scheduled to unveil on Aug. 29 the Galaxy S2 in the United States, the world's largest economy. But what could have been the record launch of "the best smartphone that is not an iPhone," was taken over by Hurricane Irene, which caused massive blackouts, billions in damages and at least 44 deaths. Aug. 29 would have been brilliant timing, as Tim Cook is still rearranging the furniture at Apple's executive offices (after being abruptly asked to succeed Steve Jobs), and the iPhone 5 is still stranded in production.
Twist of Fate
The Galaxy S2 is set to rival the iPhone based on the positive reviews the Samsung device has been reaping. Engadget has called the Galaxy S2 "possibly the best smartphone, period."
And Samsung's Galaxy S 2 has better specifications than the iPad 2. The Galaxy Tab 10.1 has a 10.1 inch and a higher resolution display than iPad 2 (1,280 x 800 versus the iPad's 1,024 x 768), is also technically thinner than the iPad 2 (0.01 inch thinner), and weighs 1.24 lb compared to iPad 2's 1.33 lb. The Galaxy Tab comes with a Tegra 2 dual core 1 Ghz processor, a top notch touch response, 1080p video playback, 720p video recording, WiFi, Bluetooth and a long-lasting battery. Galaxy Tab also has a gyroscope and accelerometer for motion gaming experience.
In addition to improving the specs, and possibly focusing on innovation - rather than imitation - to avoid problems from Apple, Samsung could eye HP's webOS (or even HP's entire personal computing business, or even Nokia Oyj, or even RIM.
Samsung is trying to fight back against Apple. It informed the court in Australia last week that it is pursuing counterclaims that say Apple's iPad and iPhones are violating Samsung's patents. But is doubtful if Samsung at present has enough IP ammunition against Apple.
Nokia's stock has been down this year, and it's shares are now only worth $22 billion. RIM is also in disarray, with its value down to $16 billion. Nokia would be attractive to Samsung as it has a patent portfolio that is strongest among smartphone makers (even Apple is a Nokia licensee) and is still the world's largest handset manufacturer. If it goes for RIM, Samsung can take advantage of RIM's reach among business users and the U.S. market, as well as the BlackBerry platform.
A bargain purchase for Samsung could be Hewlett-Packard's mobile devices business. HP paid $1.2 billion in July last year for Palm Inc., the creator of the webOS. Given that HP has already announced that it is ending production of webOS devices, Samsung could grab the business for much less. Samsung need not leave Android as this is the only platform that has apps that could rival those available in the Apple App Store. But by taking webOS, Samsung could also differentiate itself from other Android makers. The webOS has its own unique features: a cards system for swiping through open apps, built-in Skype support, wireless printing, and syncing with Google Docs, QuickOffice, Dropbox and Box.net.
If Samsung fails to beat the iPad and the iPhone, it will likely not start selling Galaxy devices at $99.99 apiece. But it needs to go beyond what the Android ecosystem is providing in order to get rid of the bad luck.
What do you think?
"Luck is what happens when preparation meets opportunity." - Seneca (Roman philosopher, mid-1st century AD)
"Luck is when opportunity knocks and you answer." - Author Unknown