Everyone remembers the kid who sat next to you in high school and conveniently turned his head toward your Scantron to “cough” during an exam. Even worse are the ones who peer pressured you into letting them copy the entirety of your homework. Copycats are a nuisance — a fly you just can’t seem to swat for good. Even in the team-oriented corporate world, there are colleagues who ride the coattails of your work. But what happens when a $700 billion company strategy is rooted in these very grounds?
Apple has created an ecosystem that most students at the University of Michigan have bought into. Send a text on your iPhone, track your workout on an Apple Watch, write your essays on a Macbook and indulge in your morning podcast on those AirPods. When you run out of storage, make sure to upgrade your iCloud storage for only 99 cents. Every picture you take, place you go, thought you have and person you talk to circles back to these environs. But beware: The ecosystem comes with a side effect of allegiance. The easiest way to start a friendship on the wrong foot is observed when you carefully type a new number into your phone and watch the green text fail to turn blue.
When the iPod became wildly successful after its release in 2001, Apple looked ahead and accurately predicted the inevitable smartphone takeover. Thus, it quietly began creating the iPhone. The iPhone was groundbreaking when its first few models came into fruition, capturing 3.4 percent of the smartphone industry’s market share within the first quarter on the market. And by 2012, the iPhone made up more than half of Apple’s revenue.
A quick glance at Samsung and Apple’s timelines show the iPhone broke grounds first. The debut iPhone was released in January of 2007, while the Samsung Galaxy was released in 2010. While the first 8GB iPhone cost a whopping $600 (approximately $740 today), it was widely regarded as the most anticipated gadget of the decade, and thus saw booming success. But since its first few models, Apple has let its branding and consumer loyalty take the lead, working in the shadows of Samsung while carrying the gold medal.
Excited for the AirPower wireless charging technology set to release later this year? Samsung debuted this capability back in 2015, even featuring it in an ad mocking Apple. Tired of getting the “Not Enough Storage” notification right as you’re about to snap the perfect photo? Samsung introduced microSD expandable memory in 2014 with the Galaxy S5 — it can now expand up to 400 GB. And while your water-resistant 2016 iPhone 7 may save your life during a poolside Instagram photoshoot, the Samsung Note7 introduced waterproof technology that same year, after implementing water resistance since its S4 in 2013. The 2016 Note7 also debuted facial recognition technology, which Apple picked up for its iPhone X in late 2017.
The mimicry pattern runs deeper than surface-level features. After Steve Jobs bashed OLED screen technology in 2012, Tim Cook ultimately implemented it in the Apple Watch in 2015, then the Macbook and iPhone soon after for better picture quality and power efficiency. But while Samsung has used OLED screens since its 2010 Nexus S, Apple deserves some credit, as OLED technology has been argued to be primitive until used in Apple products.
Though the Samsung versus Apple rivalry can often feel as bitter as that of Coke versus Pepsi, what many tend to forget is that Samsung actually produces a substantial number of processors and OLED screens for Apple. While their supplier relationship altered in 2018 with Apple’s decision to bring on a second OLED supplier to reduce their reliance on Samsung, the South Korean mogul once made $110 off of every iPhone X that was sold. And while both companies continue to play tag in legal battles year after year, they still lead a critically symbiotic relationship. As they say, keep your friends close, but keep your enemies closer.
It is hard to deny Apple is winning in the smartphone race in the U.S. Despite Samsung being a global leader in market share, their smartphone market share in the U.S. hovers near 25 percent, while Apple’s sits at 45 percent. Apple was also the largest company by market cap last year, while Samsung took 12th place. Beyond getting kids acclimated to their products through elementary school classrooms equipped with iPads and Macs, Apple also continues to offer features that are deeply integrated in our daily lives: iMessage and FaceTime. It can be argued Apple is leading in the U.S. because of these features, while other countries use third-party apps, such as WhatsApp, and thus find more value in Samsung products. While Samsung often innovates earlier, Apple still capitalizes on a rare pairing of luxury branding and ubiquity to hold on tight to their dominance.
But perhaps Apple’s lack of innovation will eventually catch up to them. Three months ago, Goldman Sachs slashed their stock price forecast of Apple, citing a lack of success in China as well as the iPhone XR’s flop in performance. And just 4 weeks ago, Apple announced they too are slashing their own revenue forecast for these same reasons, ultimately causing their stock price to plummet by 10 percent. Minor model changes and steep price jumps may no longer be the ticket to success in Apple’s playbook.
You can only play copycat for so long. But for now, as enticing as cutting-edge technology and waterproof systems are, no one wants to be a pixelated Snapchat, or worse: a green text message.
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