As we approach one of the busiest periods of the year, with Christmas, Black Friday and the January sales all within the next period, the Mobile team debates the impact of the two big manufacturer's market dominance.
Is Samsung & Apple's dominance good for the UK?
Zak Garner Purkis - Yes
Samsung and Apple create demand – it’s as simple as that. Even with mobile phones at 81% market penetration in the UK, these two manufacturers still have the power to drive people into retail stores and capture the public’s imagination. Operators, retailers, distributors and even other manufacturers benefit from the heightened consumer interest that these brands generate. Every pound spent by these two giants – and there are many millions of them – is one more that supports the mobile industry.
It should also be noted that many all-conquering brands have come and gone from the mobile market. The rise and fall of brands such as Nokia and BlackBerry are testament to the fact that a place at the top of the mobile market is only ever temporary.
The demand these brands consistently deliver to the market presents an opportunity rather than an obstacle to its rivals and partners. If you can present a genuinely different, innovative product that stands out, the interest in mobile is guaranteed to you by the huge marketing budgets of Samsung and Apple.
In fact, it encourages innovation because if gaining market share is simply a case of going blow for blow in spending terms, there is little motivation to create a product and for companies there isn’t the same benefit to being an originator.
Jack Courtez - No
Despite a launch-day recall of Samsung’s second biggest device, not a single Android manufacturer has been able to capitalise on it. In the saturated UK market, trying to win users means taking on the financial and logistical muscle of Samsung. For many, the high spend required coupled with the low return makes the UK market unappealing compared with growing markets such as Brazil and India. For those that have tried, the results aren’t encouraging. Huawei’s door-busting entrance to the UK equalled 3.1% of sales in August.
Samsung and Apple aren’t the first superpowers – Motorola and Nokia have both filled that role, and both dramatically fell from it when a new player with deep pockets came along. However, that was when a
growing high margin market met the risks with high rewards, not today’s saturated one.
And it’s not just bad news for manufacturers, as evidence shows this muscle is being leveraged in the wider industry. In the past year we’ve seen Samsung threaten distributors over box breaking, and penalise retailers for not hitting sales targets, in the same way that Apple is renowned for. Economists from Keynes to Hayek all agree that a duopoly is bad for business and bad for consumers, Samsung and Apple’s is no exception.