Ask a Korean! News: Apple v. Samsung

One of the Korean's favorite blogs is Alternative Hypothesis, providing analysis on technology market with respect to Korea and other world leaders. The blog is run by Mr. Kim Sang-Hoon, a reporter covering business for Dong-A Ilbo.

Mr. Kim recently penned an extremely interesting piece comparing Apple and Samsung, as reflected by their newest smartphones. Below is a translation. (Because the Korean is unfamiliar with tech terms, the translation may not match up perfectly.)

Great Product and Great Factory - the Difference Between IPhone 4 and Galaxy S

I just came back last night from Japan. I was there for the Google Conference, but apparently the world is now full of chatter about Apple and Samsung Electronics. Many commentators in the news said that iPhone with strong software augmented the hardware, and Galaxy with strong hardware augmented the software, in the end resembling each other. I don't know about that -- really, what things are similar?

Actually, there is nothing special about iPhone 4's hardware. The A4 Chip, reported to have been improved in quality, was previously used in iPad and fundamentally is a semiconductor using ARM's core. Of course the detailed specifications are very important, but to put it very simply and just looking at the numbers, it is not much different from the 1 GHz chipset used in Snapdragon or Galaxy S by Samsung. Also, the "Retina" Display that caused a stir is no more than an IPS-style LCD with excellent resolution. Although it is much better than any other low-cost LCD, with respect to the ability to display outdoors or the view angles, (roughly speaking,) there is not much difference with HD LCD that goes into phones made by LG Electronics. Personally, I believe that LG Electronics had the ability to order a single-standard component as many as Apple could order, LG would have been the one introducing the Retina Display. (Of course, it is a separate question whether LG has enough marketing acumen to name it "retina.")

At any rate, what is important is not the specs of each and every hardware. What is important is the purpose for which this product is made, and how the new functionalities organically unite with the old functionalities to serve this purpose. Apple is really good at this. To give an example, I personally think iPhone 4's camera -- which was buried by the fanfare over other parts -- is the prime example.

In talking about iPhone 4's camera, Steve Jobs said one should focus on the purpose for which the camera is used instead of engaging in a megapixel race, because a phone camera is fundamentally a tool that one always carries around to record one's surroundings. Therefore, a phone camera ultimately has a smaller image sensor (which acts like the film) and smaller lens. Then naturally, the picture is murky and the quality of the photo taken in a dark place is even worse. Given this characteristic, a phone camera will never be better than a DSLR. Instead, Steve Jobs emphasizes that iPhone 4's camera can be as good as a point-and-shoot camera. IPhone 4's camera takes in relatively more light because the megapixel number of the camera's sensor increased but the size of each sensor speck remained the same. The result is that apicture taken with iPhone 4's 5 megapixel camera is not that far behind in quality compared to a picture taken with a regular compact point-and-shoot digital camera.

As an aside -- for the sake of providing more context -- I really like the camera on iPhone 3GS. Although it is only 3 megapixel, I only use the iPhone camera unless I have to take out the DSLR. I do that because there is hardly any "shutter lag," which is the time it takes to capture an image after the shutter is pressed. With other cell phone cameras, when the shutter is pressed when a child is smiling, the image captured is the child with his face turned away. That's about 0.5 seconds, which is a very long time as semi-serious photographers would know. DSLR takes the picture instantaneously when the shutter is pressed, but it is heavy and a chore to carry around all the time. For a person like me who takes a lot of pictures of children, this is a very considerate function. In contrast, other smartphone makers talk about the megapixel of their cameras but keep mum on shutter lag. Nor does iPhone particularly emphasize it -- you just know when you use it. Then iPhone users, instead of playing number games, create a word-of-mouth ad that says "You just know the difference once you use it." This is because Apple is a company that cares about how we use a machine.

This is how Apple makes a great product. Seeing Facetime after seeing the existing video conference that features low resolution and static-laden audio makes you widen your eyes with wonder. A video conference screen that sends images captured by a HD-capable camcorder is a functionality that redefines video conference. Facetime commercials nicely shows how Apple is accomplishing its mission of making a good product.

Compared to this, Galaxy S is not a great product. Although it receives praises of "best functionalities among all the Android phones thus far," it feels more like a well-rounded thing without a big flaw rather than the best. This is why it is difficult to imagine anyone who would stay up all night to buy Galaxy S, children who jump up and down with joy after receiving Galaxy S, or a friend who is on the verge of tears after receiving a Galaxy S as a gift.

But even the greatest product is meaningless if it is not there by your hands when you want to buy it. Therein lies the greatness of Samsung Electronics. It was reported that Samsung pre-ordered more than a million Galaxy S. Worldwide, 110 communications companies are planning to purchase Galaxy S, and Samsung plans to supply them all at the time they want the phones. In contrast, iPhone 4 will only be available in five countries (including the U.S.) by the end of June, 18 countires by the end of July, and even later for other countries. Until then, people cannot buy an iPhone no matter how much they want one. When the demand outstrips the supply, Samsung can conjure the magic of instantly increasing supply by expanding the production line for Product A into the production line that used to make Product B. Apple cannot do this. Instead, Apple takes reservation on the quantity of its products, gets its product based on that deadline, then increases the supply if the order increases. Although Apple is always late to respond to the market, it covers its weakness by its product's outstanding attractiveness. Apple even goes so far as to use the reactions of the waiting customers in its marketing.

In contrast, if the demand for its products is lukewarm, Samsung Electronics -- which runs its own factories -- simply changes the production line to produce something more popular. On average, Samsung only takes two months to re-educate its workers for the new line. Samsung's employees, who are divided into a number of ranks, always endeavor to become a higher-ranked engineers. Because the working environment is dynamic (in other words, not boring,) there is no employee who kills himself; in fact, the job satisfaction for Samsung's factory workers is on the high side. Furthermore, based on the market's reaction, Samsung adjusts the amount of production within 48 hours. It is not an exaggeration to say that Samsung has the world's quickest reaction time among global corporations. Apple cannot order Foxconn to adjust its production within 48 hours. If Apple did that, it would not be able to have the contract that allows for Apple to put out its products at this price. But Samsung makes a lot of cell phones other than smartphones; because Samsung orders so many parts, it can acquire components at prices as low as Apple's. Samsung also has a production system that is just as efficient as Foxconn. On top of this, Samsung has the advantage of an incredibly fast market-reaction-time that Apple-Foxconn combo would have difficulty achieving. The strength that makes Samsung great is this unique advantage that allows the company to make approximately similar products for cheaper price and put them out in the market when the customers want them. I think the company learned this strategy when it was battling Nokia.

Therefore, my belief is that while Samsung did not build a great product, it built a great factory. Even though it does not make an Anycall phone that drives customers mad with their desire to have, Anycall phones maintained the basic level of quality, were available at appropriate price, and existed at the time and place when the market wanted that product. Instead of trying to be the most innovative company, it seems as if Samsung is trying to be a company that will continue to be in second place even if the first place may change.

위대한 제품과 위대한 공장, 아이폰4와 갤럭시S의 차이점 [Alternative Hypothesis]

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