iPhone 6S created by Samsung?


On 9 September 2015 Apple presented the iPhone 6S, where they claim: ‘The only thing that has changed is everything’ (Apple, 2015). On the other hand, Samsung claims that ’The next big thing is (already) here’ with their new smartphones (Samsung, 2015). Since I need to buy a new phone very soon, I am starting to doubt how different these products actually are.

The acknowledgment must be made that these companies do not make these phones by themselves. For example, Apple has over 200 suppliers to create their products (Apple Inc., 2015). Besides that Samsung aims to strengthen its position as worldwide computer chip manufacturer (ANP, 2015), which implies that they supply other firms to make their electronic devices (e.g. iPhones).

According to Kaufman et al. (2010) these business networks emerge because customers are more informed and therefore increasingly demanding products and services tailored to their specific needs. This results in business networks, which are able to break up their value chain into independent modules (Kauffman et al., 2010) and thereby are able to add more value to the final product (Ketchen Jr. et al., 2004). One of the reasons to participate in a business network is that it accomplishes more as a whole than the value it can capture by its individual parts (Kauffman et al., 2010). Another reason, especially in this technology driven industry, is that business networks tend to be more innovative (Möller & Rajala, 2007) (Gnyawali & Park, 2011). Therefore all these firms help to grow their entire business network (Gnyawali & Park, 2011), to motive more external parties to join the network (Gallaugher, 2014) and further improve their competitive advantage with their final product (Ketchen Jr. et al., 2004).

apple-vs-samsung3The uniqueness of Apple’s business network is that a direct competitor (e.g. Samsung) is a supplier for their products (e.g. iPhone). Scientific literature names this phenomenon co-opetion, where end-product competitors are contributing in each other’s value chain. As aforementioned a reason to embrace co-opetion is more innovation (Gnyawali & Park, 2011), but this still does not clarify why for example Samsung might cannibalize its own products. An explanation is that co-opetition is only beneficial when businesses are still able to differentiate with their value adding activities (Ketchen Jr. et al., 2004). Therefore if end-product competition is growing, businesses are trying to further protect their differentiating activities (Ritala & Hurmelinna-Laukkanen, 2009). A good example from Apple and Samsung are the patent wars they are having for the past few years. They are blaming each other for copying each other innovations to protect their differentiating activities. However, co-opetition will still be beneficial for both parties, since another observance states that it results in less vertical integration and more diversification (Gnyawali & Park, 2011). For example, this ensures that Samsung can further grow as a chip manufacturer without the interference of Apple. Additionally, the suppliers of companies such as Apple benefit from the demand they generate (Zhang & Frazier, 2011). Therefore the question about co-opetition should be: do we as a business want to capture value from competitors or establish a greater competitive advantage? (Park et al., 2013)

To be honest I really admire the research done about this phenomenon named co-opetition. However I still can’t figure out my personal issue. Therefore I would like to ask you: what phone should I buy? Since I can’t see the difference between the products of Apple and Samsung anymore after this study.

Vincent Laduc (417658vl)

References
Anderson, A., Park, J. & Jack, S., 2007. Entrepreneurial social capital: Conceptualizing social capital in new high-tech firms. International Small Business Journal, 25, pp.245-72.

Anon., 2014. In Gallaugher, J. Information Systems: A Manager’s Guide to Harnessing Technology. Saylor.

ANP, 2015. Samsung wil verder groeien als toeleverancier. [Online] Available at: http://www.nu.nl/mobiel/4132940/samsung-wil-verder-groeien-als-toeleverancier.html [Accessed 25 September 2015].

Apple Inc., 2015. Supplier Responsibility. [Online] Available at: https://www.apple.com/supplier-responsibility/our-suppliers/ [Accessed 23 September 2015].

Apple, 2015. iPhone. [Online] Available at: http://www.apple.com/iphone/ [Accessed 1 October 2015].

Gnyawali, D.R. & Park, B.-J.(., 2011. Co-opetition between giants: Collaboration with competitors for technological innovation. Research Policy, 40(1), pp.650-63.

Greve, H.R., Baum, J.A.C., Mitsuhashi, H. & Rowley, T., 2009. Built to Last but Falling Apart: Cohesion, Friciton and Withdrawal from Interfirm Alliances.

Hitt, L.M., 1999. IT and firm boundaries: Evidence from panel data. Information, 10(2), pp.134–49.

Kauffman, R.J., Li, T. & van Heck, E., 2010. Business Network-Based Value Creation in Electronic Commerce. International Journal of Electronic Commerce, 15(1), pp.113–43.

Ketchen Jr., D.J., Snow, C.C. & Hoover, V.L., 2004. Research on Competitive Dynamics: Recent Accomplishments and Future Challenges. Journal of Management, 30(6), pp.779-804.

Möller, K. & Rajala, A., 2007. Rise of strategic nets — New modes of value creation. Industrial Marketing Management, 36(7), pp.895-908.

Park, B.-J.R., Srivastava, M.K. & Gnyawali, D.R., 2013. Walking the tight rope of coopetition: Impact of competition and cooperation intensities and balance on firm innovation performance. Industrial Marketing Management , 43, pp.210-21.

Ritala, P. & Hurmelinna-Laukkanen, P., 2009. What’s in it for me? Creating and appropriating value in innovation-related coopetition. Technovation, 29, pp.819-28.

Samsung, 2015. Homepage. [Online] Available at: http://www.samsung.com/us/ [Accessed 1 October 2015].

Zhang, J. & Frazier, G.V., 2011. Strategic alliance via co-opetition: Supply chain partnership with a competitor. Decision Support Systems , 51, pp.853-63.

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3 responses to “iPhone 6S created by Samsung?”

  1. ikbenamy says :

    Thank you for the very interesting post about co-opetition and this new insight of the Apple and Samsung war!

    However, I want to comment on the fact that you mentioned that Samsung might cannibalize its own products by offering its chip to Apple. I think Samsung is rather expanding its scope of business instead of cannibalizing its own products. Sure, by offering the chip to Apple does not deliver direct competitive advantage for the end products, but it does make Apple dependent on its biggest competitor. Moreover, in this highly technology driven society we are living, the competition between smartphones does not only occur between Apple and Samsung. Other fast growing companies such as Huawei have also joined the pie and enhanced their market share rapidly (Mawston, 2015). Therefore, by offering chips to Apple, every sale of the iPhone benefits Samsung as well since they deliver the chips. So the more iPhones are sold, the more chips Samsung has to produce and the more value it will add to the company and its revenue model.

    However, we do have to bear in mind that Samsung is not the only company that delivers the chips to Apple. Taiwanese manufacturer TSMC also delivers the chip, although the chips between these two companies are not exactly the same. Despite the smaller chips of Samsung, and therefore claiming to be more efficient and less energy consuming, the overall battery performance of the iPhone with a TSCM chip is 2 hours better than the iPhone with a Samsung chip (Dremali, 2015). So to enhance their bargaining power as a supplier and being the leading company of computer chips, Samsung still has a lot to improve. (I’m sorry to deliver you this depressing information if you have already bought the iPhone and it happens to have the Samsung chip).

    But perhaps you still haven’t solved your inner conflict about which phone you ought to buy yet. Therefore, I found this online comparison between the smartphones on your demand: http://www.trustedreviews.com/opinions/samsung-galaxy-s6-vs-iphone-6. Take a look at the video and perhaps it will enlighten your mind. Good luck with choosing and let me know which company has the final charm to lure you in!

    Sources:

    Dremali, A. (2015) Does your iPhone have a good or bad A9 CPU? http://www.engadget.com/2015/10/06/does-your-iphone-have-a-good-or-bad-a9-cpu/, 8 oktober 2015

    Mawston, N. (2015) Huawei Become World’s 3rd Largest Mobile Phone Vendor in Q2 2015, https://www.strategyanalytics.com/strategy-analytics/news/strategy-analytics-press-releases/strategy-analytics-press-release/2015/07/30/huawei-becomes-world's-3rd-largest-mobile-phone-vendor-in-q2-2015#.VhZKOHqqqko, 8 oktober 2015

    Sawh, M. (2015) Samsung Galaxy S6 vs iPhone 6: Which is the best? http://www.trustedreviews.com/opinions/samsung-galaxy-s6-vs-iphone-6, 8 oktober 2015

  2. nielsvanderwolf says :

    Very interesting post. I agree with you that the products of Samsung and Apple are really similar and hard to differentiate. A few years back, Apple was beating Samsung on almost all areas in the smartphone business. They were more innovative, had a better operating system, better marketing etc. etc. Nowadays, we see that Apple’s major strengths of a few years back are outpaced by Samsung. Samsung’s new Galaxy S6 is more innovative than the Iphone 6, Samsung’s marketing has improved amazingly and Samsung’s operating system (Android) is not any worse than Apple’s operating system (IOS). However, Apple still has a few advantages over Samsung: Apple is one of the top most companies of the world for its brand equity. From the days of mcintosh computers, Apple is known to be a brand with promise. Also, Apple’s consumer loyalty is more sustainable than Samsung’s. An Apple loyal customer will proudly proclaim in front of the whole world that he is a Apple guy. The brand loyalty of Apple Iphone can be compared with the Harley Davidson brand loyalists. Just like the HOGS are known to be furious Harley enthusiasts, so are the Iphone owners.

    Since deciding between Samsung and Apple is mostly about personal preference, I will not give you an advice which phone you should buy. However, to make deciding easier, I think you should focus on the operating system. Don’t make a decision between Apple and Samsung, decide if you prefer Android, or IOS!

    Niels van der Wolf
    355821

    References:
    http://www.marketing91.com/swot-analysis-apple-iphone/

  3. joonchik says :

    Android. Both try to raise barriers to prevent their customers from leaving their ecosystem for another. It’s not an trivial decision to move to a different ecosystem when you know you will loose the investment you made in apps in the App Store or Google Play Store. And when you have been using that system for some years, your investments could reach a large amount. And while moving from one model to the next has been made easy with backup tools allowing you to transfer all your data and settings, moving from one ecosystem to another can be a tedious task requiring a lot of preparation.
    Apple has the most effective lock in here. There ecosystem encompasses not only to the smart phones but also a complete range of other products like tablets, computers, media players and accessoriesbut that work perfectly together, but refuse to work with other brands. Sometimes a ‘choice’ is not complete voluntary!

    JH Aben 171724

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