iPhone vs the Asian competitors

Apple's iPhone global market share** is about 11%. But this 11% translates to 66% of the industries profit and 32% of the revenue. That's a huge premium for a brand.

Samsung which has a global market share** of 22%, brings in only about 17% of the industry profits. 

Apple's iPhone strategy has clarity. iPhone 1, was a revolutionary product. The subsequent models haven't had path-breaking innovations but noticeable improvements that have kept user interest high. Some of the improvements are fingerprint sensor, bezel-less phones, face recognition, multiple cameras and a fast processor.

Some key observations on their strategy:

• Keep costs low (e.g. dropping the fingerprint sensor, headphone slot, charger, etc.). Don't offer features which customers haven't asked or don't value. 
• If software can deliver the experience instead of hardware shift to software. This reduces the cost but the selling price remains the same.
• Stick to a design/model for a few years. Apple has changed the iPhone design only about 5 times. In keeping the design the same, the manufacturing costs keep reducing and so are support and other costs. Even the minor changes within a design/model are done only once a year (But this hasn't stopped iPhone prices from increasing). Apple Watch design has been the same from launch (about 5 years ago).
• Customer experience is important and so are profit margins. iPhone battery capacity, RAM, camera resolution have been "just enough" without any excess. 
• Don't copy or offer features just because competitor phones have them unless there is a risk of losing the core iPhone customer base (e.g. dewdrop design, 4 cameras, dual sim, foldable phones, etc.). This also helps in delivering better margins.

Asian cell phone companies have been a good alternative to Apple. They have made hitech smartphones affordable and accessible to the larger population. They have kept pace with new technologies and the phones are feature-rich.

But their overall market strategy has been confusing. They lack the razor-sharp focus on their profit margins something which they can learn from Apple.  

A few observations on strategies adopted by Asian smartphone companies:

• Launch new models without a good reason and a schedule. It's almost like Zara's clothing collection. 
• Launch of new models keeps manufacturing costs high, increases costs of post-sales support and servicing. It also increases the cost of inventory. 
• The variety of phones with similar specifications is many and confusing to the buyer and the phone sales person. Samsung has 6 (A, S10, S20, M, etc.) series of phone models and within their A series there are about 10 models. A new version of each of these models is launched at least once a year and at times twice. They seem to have less regard for profit margins.  Imagine the cost of new designs, new model launch, marketing, manufacturing, inventory, post-sales support, etc. in keeping so many models afloat. 
• Within their own models there isn't a consistent design/feature strategy  - front fingerprint sensor vs back fingerprint sensor, punch hole vs dewdrop design, thick bezel vs bezel-less, etc. 
• Samsung seems to be more frugal in the phone features in their top-end premium models. Alas, they are taking a cue from iPhone in some areas at least. 
• The feature specifications are bloated without any business goal (customer interest, market differentiator, premium segment, etc.). Some of the bloated specs are 12 GB RAM, 64 MP cameras, front fingerprint sensor, 6.67 inch screens, etc.   

There seems to be a stark difference in the approach being taken by Apple and other Asian cell phone companies. The only company that seems to adopt some of Apple's obsession with profit margin and other mannerisms (minimalist features, replace software with hardware were possible, etc.) is Google Pixel - but Google isn't an Asian company.   

It's time Asian companies had clarity and structure in their cellphone strategy.  They seem to be launching phones in a transactional manner, without a product management strategy.  They need to work on a design philosophy/style and then stick to it for a few years. The frequent model launches and changes in their models hurts their chances of building a loyal customer base.  

Apples iPhone's loyal use base is hard to logically relate to.  Their ever increasing prices without a big improvement in the feature stack hasn't chipped away this user base. Apple Watch's low 18-hour battery life seems limiting and bad (e.g. how can the sleep feature be used, with such a low battery life doesn't it need to be charged in the night?) in many ways, but this has had little impact on their high sales. When one sees the iPhone 12 models, one gets the feeling that Apple is losing the plot. The thick phones and bad width to height ratio(shape), the sleekness is missing. The layout of the back cameras seem hurried and casual - it seemed to lack Apple's extreme attention to detail. In fact, the outdated iPhone SE looks sleek in comparison.

Let's hope the Asian mobile companies get their act together and challenge Apple's remarkable dominance.

Oneplus seems to have  the virtues to challenge Apple and have a cult-like loyal user base. They need to do some course correction to target the Goliath. They should release new models only once in 2-3 years. They need to put a lot of effort in ensuring the model design is a masterpiece and that can hold people's interest for years. Every model should be well executed with great battery life, camera, etc. It's much harder to create one extremely good phone model compared to creating many somewhat decent models.

Samsung is best placed to challenge Apple.  They have had their flagship S10/20 series for a while but their efforts seem distracted or demotivated. There are many things riding for Samsung phones, excellent camera, lightweight, good screens, their own processors, etc. A confused and mercurial strategy will not help. They should design a couple of great looking phone models which should be in the market for at-least 3 years. In this period they should spend their energy making the model better and better, mostly with software changes. They need to reinvent and regain the brand value they had so that people once again perceive Samsung as a true Apple alternative. 

** source: Counterpoint