Likewise, no other technology company is quite like conglomerate Samsung which makes electronics and appliances, but also smartphones, tablets, and PCs, and yet manufactures many of the electronic components for competitors, including Apple. Since Apple takes home most of the smartphone industry’s profits, why not just copy Apple?
Not all technology companies are cut from the same cloth; each tends to carve out a niche that allows them to stay in business, and if they’re very good, prosper. As prosperity goes in the smartphone business, there are two major players. Samsung and Apple. Of the two, Apple’s prosperity in smartphones is unequaled while Samsung is dominant as a component manufacturer (displays, CPUs, chip sets, memory).
Why not just copy Apple?
Technology companies can and do copy specific features and functions as well as designs of their competitors, but business models are more difficult to replicate, and if you look at the industry giants, few of them have similarities, let alone create an exact copy of how a competitor functions.
Apple’s differences relative to competitors:
- Operating Systems – macOS, iOS, watchOS, tvOS
- Hardware Design – Mac, iPhone, iPad, AirPods, Apple TV, et al
- Component Design – CPUs, Displays, chipsets et al
- Retail Distribution – Apple Stores, Online, Retailers
- Accessories – AirPods, Beats headphones, etec
- Services – Apple Pay, Apple Music, App Stores
Each competitor may have similar components in their respective business model, but few copy exactly the same as what makes Apple distinct. Yet, Apple does not manufacture most of its hardware and relies on third party manufacturers for both finished hardware and components (Samsung does displays and storage, TSMC does A-Series CPUs, etc. Not one of Apple’s competitors has had as much success with creating similar distribution breadth. Microsoft has a few dozen stores. Apple has over 450 stores. What about Samsung, Google, Amazon, et al? A retail presence, yes, but few actual employees, and nothing that resembles the Genius Bar for support.
Apple has an entire ecosystem which provides all that customers need, from end to end. Hardware and software, privacy and security, support, accessories, and, in general, higher quality products which come with higher resale value which helps to mitigate the higher entry price for each product.
Google, Samsung, and Microsoft have a similar ecosystem but not as complete or end-to-end. Microsoft has no presence in mobile devices. Google sells very few products and fewer unit sales compared to Samsung and Apple. Samsung sells components and end user devices, but specializes in both components and mobile devices. Samsung’s software development pales in comparison to Google, Apple, or Microsoft.
Samsung and other smartphone makers have copied the iPhone’s design since it launched in 2007, but cannot easily copy the company’s growing and changing business model. Google went back to the drawing board on Android and copied iOS. Microsoft copied early versions of Mac OS. Most PC notebooks today look like Macs from just a few years ago. Copying features and functionality is rampant in the technology industry, but copying an entire business model is next to impossible.
Apple’s success, iPhone success not withstanding, seems to have come about because the whole ecosystem is more valuable than the sum of the parts. Can you imagine Apple’s supremacy if it manufactured major components like Samsung’s displays and TSMC’s CPUs? The nature of technology component manufacturing changes so quickly in the 21st century that Apple may be wise not trying to make all its own parts, but instead use its wealth to help specialist component makers provide the company with the best of advanced technology.
After all, Samsung doesn’t need to make its own operating system (Tizen doesn’t count) and Google doesn’t need to make its own hardware, either. Copying a business model just ain’t easy.