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Samsung Hammers Apple, as I Predicted in 2011.

Written by Gary North on May 23, 2013

Samsung is the dominant producer in the smartphone market today. Apple is falling behind.

In second place in China is Lenovo, not Apple.

Which market is the market of the future? The USA or Asia?

I knew this would happen. I said so in 2011. Samsung uses the Android operating system. Android is the future, not Apple. Open source beats proprietary. Free beats royalties. Price competition beats customer loyalty. Why? More customers.

Apple’s strategy is to capitalize on its patented operating system. Customers care about price and performance, not patents.

Apple stifles innovation with its patents. Android says: “Come one. Come all. May the best products win.” Result:

“Samsung is also making profits from its Android smartphone sales, and captured a 95 percent share of all Android smartphone profits in the first quarter, research firm Strategy Analytics said earlier this month. Global Android smartphone profits reached US$5 billion in total during the first quarter of 2013, and accounted for 43 percent share of the entire smartphone industry’s operating profits.”

Apple is suing Samsung for patent infringement. It is relying on a judge to save its market share. By the time a judge decides, Android developers will be on to the next design, the next innovative product.

Apple’s stock is down 36% from its high. It will fall even more. It is fighting a rear-guard action with its strategy of patent protection.

Apple will still produce good products, as I said in 2011. It just won’t produce the best products.

Entrepreneurship favors customer satisfaction. It favors innovation. The free market rewards successful innovation, not restricted innovation.

Apple has made a challenge: “Our lawyers can beat any guy in the room.” There are too many guys in the room. The room is the whole world. The courtroom that counts is this room: the courtroom of customer opinion.

As for me, I don’t own a smart phone. I own a long-obsolete AT&T cell phone. It works just fine. It’s a lot smarter than I am, digitally speaking. But among smart buyers of smartphones, Android is the future, not Apple. The judges who matter are customers around the world, not some robed judge in northern California.

Continue Reading on www.pcworld.com

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12 thoughts on “Samsung Hammers Apple, as I Predicted in 2011.

  1. How true. I switched awhile back from an ipod to a mp3 player that happens to be a Samsung, mostly because maintaining my music files on an Apple device was such a PITA.

  2. Mobulas says:

    Sorry, this is just another half-baked attempt by a writer who doesn't do his homework. Was there any mention of the recent Chinese start-ups that have overtaken the mobile market in China. Huawei and ZTE for example. What about the discontent with Google and Android? Firefox Mobile OS could be a game changer for everyone.

  3. Sorry, but I cannot stand Samsung or Android. My dissatisfaction with Samsung began with their half-baked entry into the television market in the last century with their pushing that cheap junk on the American market further driving domestic television manufacturers out of business. Their current entry into the cell phone market is no different. So, Samsung is taking over the Chinese market. So What! The Chinese market has never been fair to American producers beginning with their incessently undervalued currency. It is time that Americans awakend from their slumber and recognized cheap junk for what it is.

  4. This essay is an extension of the "Customers are in Charge" essay today. I don't know of the relative merits of the two (or more) products, but Apple WILL have to compete on the merits of their product eventually, and not rely on court decisions (government intervention) to tilt the playing field in their direction. Re Flynn's argument above, Samsung didn't "push" their "cheap junk" on the American market–they simply offered their products for sale. Individual American customers chose them often enough to make Samsung's entry successful. If Americans had rejected those products, Flynn would not have a complaint. So his complaint is really with the American customer, whom I think he regards as disloyal. Mises (and Gary) demonstrate that loyalty really has no bearing on customer choice, nor should it.

  5. i choose apple over goggle it is that simple for me. i do not trust goggle.

  6. I was a Windows user since the beginning before switching to Apple in 2011. If I have the choice I will never buy a non-Apple device for the rest of my life. My personal productivity has soared. I don't care if I pay a premium for that nor do I care if Apple is not on the bleeding edge of technology. I don't need bleeding edge. I need stability, functionality and a streamlined workflow. Apple's homogenous environment and fascist-styled rule over its application vendors gives me that.

  7. The problem with the Apple product was the itunes software that wants to manage and monitor my music choices, bombarding me with advertising and pushing new "artistes" I have no interest in whatsoever. Even disabling the itunes software for better control was a multi-step nightmare that I do not have the time to screw with. With Samsung it's drag-and-drop or delete my music files: simplicity itself. Thank you, Samsung. Bye-bye, Apple.

  8. Monkeypox69 says:

    Do YOUR homework: Huawei and ZTE use Android on their phones.

  9. Monkeypox69 says:

    LOL drink the crApple Kool-Aid.

  10. Monkeypox69 says:

    crApple wants to control everything that its customers do. crApple also creates the products that it wants to produce, not the products that its customers want.

    iSheep buy whatever crApple produces without thinking, and say that it's "great".

  11. Maybe there are markets for ALL these different ways.

  12. Re: Flynn,

    — It is time that Americans awakend from their slumber and recognized cheap junk for what it is. —

    Look like the fools are not getting it, Flynn. Americans still prefered the "cheap junk" over the expensive junk that just happened to be built in America. Would you want the government to do something about it?