The next big brand war

HARISH BHAT | Updated on May 30, 2012

In the world of brands, a battle between global giants is always interesting to follow, and holds many lessons for marketers everywhere. Over the past decades, we have watched and relished many such glorious tussles. Coke vs Pepsi. Unilever vs Procter & Gamble. Nike vs Adidas. General Motors vs Toyota. Now, the big battle of this decade is taking shape. The combatants: Samsung and Apple. The big prize they are battling for: Domination of the world of digital devices.

Both Samsung and Apple are huge brands. Consider these remarkable statistics:

Samsung recorded revenues of $220 billion last year. Apple recorded revenues of $108 billion last year. If these brands were countries, both would feature in the top 60 nations of the world, ranked by size of their economy (GDP)!

Both Apple and Samsung feature regularly in the list of the world's most valued brands. In the latest Millward Brown annual ranking of the world's top 100 most valued brands released a few days ago, Apple was ranked No. 1, with a staggering brand value of $183 billion. Samsung also featured prominently amongst the top 100 brands, and in fact moved up a handsome 12 ranks from last year.

Apple and Samsung are locked in a close battle for leadership in the smart phones market, and both are well ahead of Nokia in this product category. In addition, Samsung, with a global market share of more than 25 per cent, recently overtook Nokia as the world's largest brand of mobile phones.

While both brands command huge fan followings, it is not yet clear whether one of them will emerge a clear winner. In such fierce marketing wars, sometimes one brand vanquishes the other. At other times, both brands win, by establishing distinct consumer franchises. However, this article examines a very interesting aspect of this battle: the fact that Samsung and Apple are so different from each other, in so many areas. Some of these stark differences are highlighted below.

America versus Asia

Apple is a quintessential American brand, hailing from California. It has all the makings of a Silicon Valley superstar. It rules the US market, and is a new symbol of American pride. On the other hand, Samsung is from South Korea, an Asian Dragon which appears to have overtaken Japan as the technology engine of the Orient. Its market share in many Asian and African markets is well ahead of Apple. In many ways, the Samsung vs Apple battle mirrors the race for economic supremacy between America and Asia. The fall of Nokia reflects the relative decline of Europe.

Both Samsung and Apple are leaders in device technology. Yet their brand propositions are dramatically different from each other. Apple represents the pinnacle of “innovative cool”, with beautifully designed, highly ergonomic devices which blend minimalist design with a host of attractive features. Apple launches only a few products each year, but each new device is yet another celebration of this refined and well articulated brand philosophy. On the other hand, Samsung is much more about the power of electronics, with the brand representing the raw power of new technology, rather than innovation in design. To re-emphasise technology leadership and muscle, it delivers rapid-fire launches of multiple products, which hit the market in quick, impactful waves.

Arrogant vs Inclusive

Apple may be greatly admired, but it is an arrogant brand. It is elitist, preferring to focus only on the top end of the smart phones market.

It espouses its own operating system for mobile phones (the iOS), which is a closed world that admits no outsider. It is a brand that seeks to set the Apple consumer apart from the common man. Contrast this with Samsung.

It is inclusive and caters to all consumers, with a product offering that ranges from the most basic mobile phones to the most advanced Galaxy Tablets. It uses the Android operating system, which is open and widely available. It is a brand that empowers consumers without building elitist walls around them. Clearly, the philosophies are at two different ends of the spectrum.

Cult vs Mainstream

Apple has all the makings of a cult brand, much like Harley Davidson or Vespa or Star Trek. It commands a fanatical following, which is in passionate love with the brand. These consumers will swear by Apple, and always choose to buy Apple products. In many cases, they will also be unwilling to tolerate observations which are critical of the brand. Samsung, however, is much more of a mainstream brand. It commands loyalty and trust based on the tremendous and consistent value it offers, but unlike Apple it does not inspire passion or blind faith amongst its large consumer base. The world will always be divided into Apple owners and the rest, but Samsung will never inspire such a divide.

Premium vs Value

Apple products – mobile phone, tablets – command very high price premiums. The latest version of the Apple iPhone is priced higher than Rs 40,000. Reflect on this price for a moment. It is not very different from the cost of a good, fully loaded laptop computer. These price premiums also make Apple a highly profitable brand. Relative to these price-tags, Samsung appears to pursue value-for-money pricing. While shopping for a new mobile phone recently, I came across several new and feature-rich Samsung smartphones priced below Rs 15,000. Being a somewhat thrifty individual, I bought myself a Samsung Galaxy phone, but clearly there are several million consumers who are willing to pay far higher prices to buy themselves delicious Apple iPhones!

Steve Jobs vs Who?

Apple continues to be strongly associated with its founder, Steve Jobs. He was the magician who made it all happen, and his artistry defined its success. Consumers worship him as much as they admire the brand. In many ways, his strong and distinctive personality epitomises the brand. Even in the post-Jobs era, the new CEO of Apple, Tim Cook, is very well known, is the world's highest paid Chief Executive, and has done his best to continue in the “superstar” footsteps of his predecessor. Now think of Samsung.

Most of us will be unable to put a face to the brand. It appears to be managed by highly competent technologists and professionals, but they are entirely unknown to the world at large. Once again, the two brands present a study in contrast. One is a superstar brand, the other is a brand cloaked in anonymity.

It is perhaps too early yet to call the results in the Samsung vs Apple battle. Both Samsung and Apple are highly successful today, and both brands are currently on the ascendant. With widely differing philosophies and strategies, their appeal is markedly different from each other. Yet these differences may eventually define the heights that these brands reach, and may separate the very good from the truly great.

Ringing in an ecosystem

Seven of the top 10 brands worldwide in 2012 are technology or telecom brands, says a new WPP study conducted by brand research specialist Millward Brown Optimor.

The study identifies and ranks the world's most valuable brands by their dollar value. It also pinpoints new trends and its impact on brands. In telecom, a key emerging trend, the study finds, is the development of independent ecosystems. This is happening thanks to the convergence taking place between content providers and device manufacturers – Apple leading the charge on that with its iPad in 2010.

Amazon and Google are other ecosystem creators who are bringing together devices, content and distribution in one offering. Formally, there had been ecosystems without much connectivity across these three areas. “But this year,” according to David Keefe, Senior Client Director, Landor, “was the first time that we were really seeing that and there will probably be more ecosystems in the future”.

Given the recent buzz over Facebook's entry into smart phone development and Google's forward movement in this space (last week the search major completed its $12.5-billion acquisition of Motorola Mobility), surely that future is not far away.

(Harish Bhat works with Titan Industries Ltd, where he has held senior business roles.He is currently on a sabbatical. These are his personal views).

Published on May 30, 2012

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