The general thought is that Samsung's strength in diversification is evident in most of their product lines. It is in their televisions, home appliances, digital cameras and other electronic gadgets. So much so that they are actually the reigning--and defending--consumer electronics champion in the world, a title they stole from the only company that taught them to be that way--Sony, once a true pioneer and idol.
When Apple entered the phones category with a singular product, Samsung completely ignored Steve's methodology. They thought, "there is absolutely no way that one product can sell more than an entire series of products." In short, no one believed that such strategy would work. Fast forward to now from the iPhone's launch in 2007, Apple's formula has clearly proven itself to work. In fact, it worked more that anyone expected. Can companies such as Samsung emulate Apple's principle in minimal SKU thinking?
I do not think they can do it. Here are a couple of reasons.
Samsung's organizational structure won't allow it. The fact that Samsung's passion in product development is diversity, it is very improbable to get to a point where they'll slash product teams in favor of one superphone. Their line of refrigerators, for example, show how much options are available to meet different consumer expectations. This method isn't exactly wrong or improper. In fact, everyone outside of the Apple universe--albeit a few notable ones here and there--continue to play by this manner. The immediate takeaway with having so many SKUs is cost. There's too much overhead running about on design, manufacturing, redesign, maintenance, restocking, retirement, et cetera--for one model! Consider 100. How about 1,000 or 5,000? Compare how many different final products Apple has versus Samsung's. The difference is massive.
Samsung wants to touch on all walks of life. As much as the preceding, Samsung is not alone in feeling the need to have different models for different consumer types. As market segments are defined, behaviors and characteristics must level with specific needs and expectations. The end result is a plethora of models that have been created to satisfy the sporty type, the professional, the chic and hip (which can actually be two different things), the pop and musically-inclined, the average adult, the average kid, the social media phenom--the list goes on. Interestingly, the iPhone seems to be answering all of these in one model.
Only a deep sense of belief in great products--the kind that Apple has--would work. Well let's go direct shall we? Samsung does not have this soul in their DNA, period. Apple lives and breathes in perfecting the human experience in a product that redefines a category. Note that difference versus building a category that defines products in meeting certain human experiences. This comparison is vast and one that puts Apple in its own class. Steve Jobs once said: "We do no market research... We just want to make great products." Challenging this piece is hard when a singular product brings dozens--hundreds even--of products to their knees.
Ultimately, both companies have their strengths. Only, Apple's is clearly on a stronger, more financially feasible, and less complicated path. Earlier this April, Apple met a valuation barrier they've never been to before--a monumental $600 billion market cap. (The record holder, Microsoft, capped at about $619 bilion last 1999.) With Apple's latest revenue report last quarter, it's harder to resist the truth about its value. In fact, one analyst hinted of the possibility of $1 trillion.
$1 trillion.
Okay. iPad, iPhone, iPod, Mac. That's a fairly small list of SKUs (apart from others of course). It works, doesn't it? This is a lesson every manufacturer ought to internalize really deeply.
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