I noticed at least 10 people carrying a Samsung Note today, in a span of couple of hours. They were everywhere – at a B-school, around the snazzy offices in Electronic City and even in a not-so-refined restaurant. When it comes to mobile handsets, Samsung seems to be the brand of choice among a wide variety of consumers. Advertising executives whom I have interact with seem to gravitate towards S2 or the new fangled S3 naturally. There are still a few for whom iPhone is the gold standard but I suspect they are already exposed to the Apple ecosystem and are happy with it. Even those who carry the lower rung of the Samsung Galaxy range (how many are there anyway?) seem to happy with the Android smartphone experience – driven by the price and the features. No wonder it shows in the numbers:
Interestingly, 3 of the Top 5 players have declined in the last year. While these are the top line revenue numbers, I suspect Samsung is profitable in India too despite spending heavily on marketing. Their marketing machine is on a permanent overdrive with highly visible campaigns for their top end products like S3 and the mass market models. Additionally re-sellers like Univercell, Sangeetha Mobiles and other local players promote their smartphones aggressively. The Saturday edition of Bangalore Time is filled with their promotions. On-ground activation campaigns for S3 is a regular feature in upmarket malls in Bangalore.
In contrast, Apple, who can be credited with sparking the global smartphone revolution in 2007 with iPhone, has ignored India completely. In Asia, they have chosen to focus on China. It could be the right reading of the Indian market where value-for-money is the name of the game in most categories among a majority of the consumers. The ‘kitna deti hai?’ syndrome perhaps. Globally Apple has focused on the bottom line and it shows: on a quarterly (Jan-Mar ’12) revenue of $39.2 billion they earned a net profit of $11.6 billion. Everything about the Apple ecosystem is geared to deliver higher margins. That does not mean that they are gypping off gullible consumers (thought its detractors would like to believe that) – the magic around the Apple experience commands a premium. From a product strategy point of view too, Apple and Samsung have taken different paths – both correct and effective. Apple has just 1 phone model as compared to 100s (feels like it!) from Samsung, not to mention several others peddling Android phones. What’s working? My views:
Middle-finger-to-Apple syndrome: Apple fierce loyalty from its ‘fanbois’ is only matched by the rabid hatred from Android fans, the fandroids. With so much global hype around the iPhone (an unprecedented 6 months prior to the launch in 2007) and online buzz & anticipation before a product launch it is bound to attract negative attention. And the lack of ‘subsidized contract plan’ strategy in India led to prices above 30k for a phone (a first perhaps). So when Samsung launched a slew of offerings from 15k onwards promising a smartphone experience, it is lapped up. More importantly it probably evoked the ‘thank you, Samsung for being the anti-iPhone’ feelings. I have heard it from friends who are Samsung users – they genuinely feel that India finally has something that can put paid to the iPhone hype. During the Mac vs PC wars, the PC users defended their choice, kind of meekly. They were forced to use a Windows in their office & elsewhere. With iOS vs Android, its different. The choice of models and the cool quotient of Android imbues an aggressive posture to the anti-Apple brigade. What iPhone can do, we can do better stance. But that hasn’t worked for all Android phone makers – HTC reported a loss in the last quarter. With the same OS being offered across so many devices targeted at the same segment, it is going to be a battle to claim superiority over another Android model. That’s the reason for TouchWiz, HTC Sense and other ‘skinning’ over the Android OS. But that’s a separate discussion.
Android ups the game: whatever one might say, I firmly believe that Android copied the iPhone UI to the last icon. But that’s the easy part. The much-mocked (by the detractors) seamless integration of hardware, software and services went unmatched initially. Add to it the attention Apple paid to the developer community by making life easy for them – single OS across phone & tablet, hardware controlled by Apple and you had a winning combination. It resulted in depth & width of Apps unmatched by Android. The fragmentation of Android devices (several OS versions across hundreds of devices) was a another factor that worked against developers. The UI and user experience of a majority of early Android devices was fugly, to say the least. Things changed over time: fragmentation of OS has been reduced, though not resolved fully. The UI has improved and App count has gone up. All of which has added to the cool quotient of Android. The halo of the Google brand and its aggressive marketing of its own hardware (Nexus mobiles & tablets) has helped consumers feel cool owning an Android device. Add to it the much friendlier pricing, aggressive promotions and choice of hardware works in dimming the halo around the Apple brand. In India, the halo was dim to start with anyway.
The big screen tipping point: The game changer according to when it came to Apple vs. the rest was the big screen in S2. The device may have been a copy of the iPhone but it offered a tangible, show-off value in the screen size. Suddenly, it was convenient whip to beat the iPhone’s 3.5-inch screen with. Then on, screen size has almost become a clincher. Bias aside, I believe a 3.5 inch screen was perfect. The reported big screen in the next version of iPhone (not as big as the Note, I hope) will only give credence to the fandroids who love to repeat the ‘Apple does not innovate but only copies’ mantra. In turn, it will boost the middle-finger attitude I alluded to earlier.
All said, I strongly believe iOS will continue to grow. It may lose market share in tablets & phones – it is bound to happen with Android market share counted across so many devices. But given Apple’s penchant for profitability over market share, they will continue to protect their margins. More importantly, they have a brigade of Apple loyalists (like yours truly) who are not going to be swayed by the goings on in the Android world. Even if its an S3. Having used some of the Android devices – an S2, the HTC One and an S3 I strongly believe that the combined experience of iOS, the hardware, services like iCloud, iTunes (yes, iTunes – many hate it from the bottom of their hearts) and the App Store makes iOS a superior consumer experience. But admittedly will appeal to a smaller audience in India. To the majority, Android rocks.