By Robert Tuomi
(WINDSOR, ON) – To some it was not unexpected to see the surprising news in the New York Times January 7 about Samsung facing new competitors in the smart phone market. A further suggestion that the company’s once dominance is slipping was said to be proven by a decline in its operating profit. Although today about one third of all smart phones now sold in the world are made by Samsung it is facing stepped up competition in the low end of the market. Reported the Times, various, “Chinese companies are offering phones with similar features at a lower price. More worrying for investors are new signs of vulnerability in premium-price phones, which account for the vast majority of the profit in the business.”
Lately Samsung’s arch rival Apple is doing much better. The company that largely created the industry is back in good form selling, “65 per cent of the smartphones priced at $400 or more worldwide, up from 35 per cent a year earlier, according to Counterpoint Technology Market Research. And that was before Apple added China Mobile, the world’s largest network operator, as an iPhone partner, with sales set to begin this month.”
This is quite the turnaround.
Only a year ago Ian Sherr and Evan Ramstad had almost given up on the company. Writing in the Wall Street Journal on January 28, 2012 they were contemplating the possibility that Apple’s coolness was actually being transferred to Samsung. Time has shown how wrong they were. At the time to prove their point, they claimed Samsung the, “deep-pocketed Korean company has used a combination of engineering prowess, manufacturing heft and marketing savvy to create smart phones that can rival the iPhone in both sales and appeal.”
Samsung, the (then) market leader in smartphones, on Friday said its fourth-quarter profit surged 76% to a record high on the strength of smartphone sales, including its Galaxy S line. The latest version is considered comparable by many shoppers in both design and technical features.
Why has the situation changed so dramatically? The reason is that largely Apple is a brand while Samsung is a large conglomerate manufacturer of products as ready to make a new stove as a new phone.
What might be happening here is that a brand is trumping a follower.
Even though Samsung surged ahead and seemed to be unstoppable it seems to have been stopped.
The message in this is that brands have almost infinite value.
Strangely, even brands no longer existing often don’t lose their value which is why old ones keep reappearing, although not necessarily by the companies that once operated them. A good example is the return to market of the D’Angelico guitar.
As Guitar Aficionado reported on August 21, “few acoustic guitars are as wildly coveted as the nearly 1,200 bespoke archtops crafted between the Thirties and Sixties by Luthier John D’Angelico in his small shop on New York’s Lower East Side.”
Often compared to the work of legendary Italian violinmaker Antonio Stradivari, these guitars are not just exquisite musical instruments but also fine works of art that feature beautiful art deco flourishes and provide a functional showcase for the woods used in their construction.
Though the original production of D’Angelico guitars expired with its maker in 1964, the name has recently been resurrected with a line of imported archtop, semi hollow, and bass guitars – new designs that evoke their namesake through details like the trademark engraved asymmetric tailpieces, gold peg-head ornaments, and stair-step–shaped pick guards.
D’Angelico shows the true power of a brand compared to a product. What is interesting is that there are probably thousands of dormant D’Angelicos waiting to be reinvigorated. Possibly locally what is left of a brand may exist in someone’s attic and could be brought back to life. It is often easier to capitalize on a long gone brand’s equity rather than try and create a new one.
If you happen to find one, you might find that you have stumbled into a gold mine.
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