The race to the bottom is always catastrophic

For a while Samsung enjoyed being the king of marketshare mainly due to massive marketing, lack of competitors (in the Android world) and its ability to crank out multiple models of essentially the same smartphone with small variations, here and there, that too at very competitive (by that I mean extremely discounted) price points. This led to a great influx of customers who either were not interested in an iPhone or could no afford iPhones. As a result Samsung enjoyed a great couple of years (2012 & 2013) in terms of marketshare in the smartphone industry. And most of the analysts were behind its bandwagon hailing it as the nemesis of Apple and that Apple is doomed as it was losing marketshare to Samsung.

The Apple iPhone has the highest profit margin in the industry (Source: Apple.com)

The Apple iPhone has the highest profit margin in the industry (Source: Apple.com)

However there were some shrewd analysis on the situation mainly comparing the profit share in the smartphone industry and Apple's dominance in that aspect over literally every other player and how the profits are the ones that will help sustain a company's dominance in a field (refer to this post on The Verge, to compare Apple's profit margins over every other company out there). Come 2014, things are looking gloomy for Samsung. Their actual sales and sales outlook seems much below the expectations (via WirelessWeek) and recent news from Asia is that they have been overtaken by Xiaomi in China (Canalys report) and by MicroMax in India (IndiaTimes) in terms of market share. These are significant events in the smartphone industry on the whole as the growing markets are not the ones form the saturated West, but rather from the populous East. Xiaomi has been ruthless in copying Apple in everything from its products to its Marketing material to even its CEO's attire(!) while MicroMax is not that blatant, it too generally lacks originality. The only ways to make cheap smartphones, apparently, is to skip the R&D expense all together and rip-off Apple. Anyway these two companies are doing nothing different than what Samsung did a few years back, in blatantly copying not just Apple's devices, but its entire smartphone strategy (Cough ... cough... taste of your own medicine... ). And it does not look like they are going to learn either, from the recent leaks of Samsung's new "innovation", a metal, very iPhone-esque, Galaxy smartphone (via GigaOm). Of course there is only one way to make a metal smartphone, and just because Apple made it with the iPhone first, doesn't mean that they invented the design, right? It was Samsung yesterday, it is Xiaomi (and MicroMax) today, who will it be tomorrow? 

And it does not look like Samsung is going to learn from its earlier mistakes either, from the recent leaks of Samsung's new "innovation", a metal, very iPhone-esque, Galaxy smartphone (Source: Weibo via GigaOm)

And it does not look like Samsung is going to learn from its earlier mistakes either, from the recent leaks of Samsung's new "innovation", a metal, very iPhone-esque, Galaxy smartphone (Source: Weibo via GigaOm)

Today, the theory that 'only a strong strategy and sound business model survives in the ever competitive technology industry' is just becoming more apparent and people who were blindsided by this obvious fact are starting to wake up (Why is AAPL at its all time highest now?). While most of the ignorant - old school analysts were forcing the idea that Apple has to compete with the cheap Android smartphones and go after market share, Apple resisted and so far has come out on top. Again I am not saying Apple cannot fail, but making cheap phones (which Apple never does) is definitely not the way to prevent an imaginary doomsday scenario for Apple. Apple is better off doing what it does the best, strive to get even better at its specialty, leaving the also-runs to compete in the "race to the bottom" catastrophe!