EU's ruling

http://www.ft.com/intl/cms/s/0/3324b122-da79-11e3-a448-00144feabdc0.html#axzz31gctGzAs

Apple and Samsung both announced a decrease of market share yesterday, what are the consequences of this loss of market share for themselves, competitors??

The media crystal ball has spoken:

“Market leader Samsung shipped 89 million smartphones worldwide in Q1 2014 compared to 69.4 million in the same period last year, according to Strategy Analytics. Its global market share now stands at 31.2%, down from 32.4% a year earlier. Apple, meanwhile, shipped 43.7 million iPhones in Q1 2014, up from last year’s 37.4 million device total over the same period. Its total market share dropped from 17.5% to 15.3%.”

Source: http://venturebeat.com/2014/04/29/apple-samsung-losing-smartphone-market-share/

So, the twin titans of smartphones have taken a trip. Since their combined market share has fallen below the psychological mark of 50%, and if the law of gravity is to be obeyed, we can expect consequences for the loss.

Questions abound: Would the queues outside their stores get shorter? Would their Telco partners drop them in their ‘free-phone’ deals to attract subscriber for line sign-up or reactivation? Would they face stiffer competition in media buy and higher costs of raising their market voice?

The Legend of the Fall

“The report cites strong growth of “second-tier smartphone brands” such as Huwaei and Lenovo and lack of entry-level devices in markets abroad from Apple as the main contributors to slowed growth for Samsung and Apple.”

Source: http://9to5mac.com/2014/04/29/apple-samsung-slip-below-50-in-global-smartphone-marketshare-for-q1-2014/

“Research firm IDC noted that Huawei, Lenovo and LG made up the rest of the top five smartphone vendors in the market, and Strategy Analytics had Huawei and Lenovo as No. 3 and No. 4, respectively (it did not include results for LG, which reported Tuesday that it shipped 12.3 million smartphones in the first quarter).”

Source: http://www.fiercewireless.com/story/analysts-huawei-lenovo-and-lg-dig-samsung-and-apples-market-share/2014-04-30

It seems that cheaper phones and hungrier competitors have caught up with Samsung and Apple. Entering the market are multiple Chinese vendors including Coolpad, Xiaomi, and ZTE.  Now, Samsung/Apple customers have more options to switch loyalty. Why won’t they if they can enjoy the same performance and user benefits from viable alternatives as powerful as Ximi phones?

Losing Mindshare and Impact on Marketing

Exodus or not, the loss of customer loyalty is an expensive episode to recover from. Previously, users would be searching for ‘samsung’ or ‘apple’ when they trawl the web for product info and deals. Now, other brand names are jumping into their choice sets. To keep top spots in the searches, Samsung and Apple face stiffer competition in auction bids for top listings. Competition has an impact marketing budget, you need to out-spend competitors to keep a market voice loud enough to make a difference.

Entry-level phone sellers are drawing smaller margins, and carry heavier burden of marketing budget which needs to be big enough to buy a market voice. Out-spending them in search marketing strategies would probably help Samsung and Apple maintain a market leader’s visibility in the media/world wide web, but the question is how much and how long do they keep out-spending? To their competitors, if Samsung and Apple kept their resolve to outspend them, it is lose-lose situation for all the parties. Media war benefits the media owners, the likes of Murdoch who will be laughing to the bank. Higher media costs mean lower margins, and marketing war chest shrinks further if shareholders demand more pay-out.

Time to Get Creative                                                                                                                           The way out is for Samsung, Apple and all the competitors to get creative and smarter with their marketing. Go for brand differentiation rather than performance comparison, loyalty-driven promotions rather than price discounts, and even cool accessories such as a wearable watch like Samsung Galaxy Gear can be the sticky factor to retain customers before they jump ship.

For their competitors, the loss of market share demonstrates opportunities to leapfrog the giants – Samsung/Apple customers are switching, but what can they offer to stand out? Their marketing engine must crank up targeted search and if they have a wonderful product to rival Samsung/Apple, now is the time to get out and loud. Their websites must contain latest and most updated info. Product videos, demonstrations and customer reviews should be visible and available. Search engine optimisation, search engine marketing, and even social media marketing are now their must-have weapons of mass-marketing destruction of their rival brands. Rest is for the weak, time to go for Samsung/Apple's jugular!

What are the benefits and drawbacks of a search marketing?

Unless you have found the Sultan Mahmud’s gold bullion in our neighbour’s yard (read: Could Malacca treasure be Sultan Mahmud's riches?), you should ask the question “Why did the chicken cross the road?” as you carefully weigh the pros and cons before diving into search marketing.

If want to get really lucky, here is the map for the Malacca treasure:

Source: http://news.asiaone.com/news/malaysia/could-malacca-treasure-be-sultan-mahmuds-riches

Good luck joining the poor chaps who are hammering and drilling for the gold, they deserve a return on their money and efforts. Which brings us back to the real topic of returns: what are the returns for dabbling in search marketing? Every carrot seems to be tied to a stick, so what are the drawbacks?

The Story of Search Marketing

It is an internet marketing strategy for optimising your website and positioning it as ‘search engine’ friendly for the paid/sponsored and unpaid/organic searches. With over 2.5 billion internet users out there, it is vital for your marketing plan. To get started, you need Search Engine Optimisation (SEO) - your website content, layout and indexing, resources and tagging must be best practice. Give tips, info and resources that people want. SEO achieves highest unpaid listing for searches and helps Search engine marketing (SEM) to be successful too.

SEM takes over from SEO by promoting your website to increase the visibility in search engine result pages (SERPs). Millions and billions of people will know you by clicking the mouse. It include paid listing, contextual advertising and paid inclusion. 

Here is a neat diagram explaining what it involves:

 

Sources: https://www.thepamediagroup.com/sem-benefits/

How it Works

You become an advertiser in the search engine world now dominated by Google, Yahoo and BING, as well as Yandex, Baidu, etc for non-English speaking folks. Your website will appear on the top and right hand sides of the first page and receive the most click throughs. More web visitors means more sales opportunities. The magic of SEM!

It’s Always Carrot and Stick

We can quickly pick up the benefits:

• WWW never sleeps, so your website gets traffic 24x7. With over 94% of Internet users using search engines to find what they’re looking for, having an effective SM is vital!
• Cost is spread over returns - Using everything from location placement to network targeting, it is very targeted so when right prospects come knocking on your web door, it is easier to convert them into customers. 
• Fast to implement - website launch takes weeks and SEM campaign takes a few months to kick in, you get results within the same year unlike traditional media.
• Measurable and flexible – SM campaigns generate tons of data on user responses, you don’t need a crystal ball to spot problems. By directly linking your marketing dollars to returns, you can change tactics such as updating site content, different keywords instead of guessing what went wrong.
•  Maximise visibility – the more people find your website and easier, faster and before your competitors, you win a mile ahead. This is huge plus for your brand, organisation, sales and your job-safe-keeping.

 Now, for the drawbacks:

• SEM is often referred to as PPC or Pay-Per-Click advertising. As the name tells you - there are payments involved, and SEM or PPC can be very costly.
• The devil is in the details, and the complexity of managing SM campaigns can be overwhelming. Dealing with settings, targeting, and optimising strategies takes a lot of time and expertise. Expect more white hair!
• Competition doesn’t go away, including the mother-in-laws. Companies with deeper pockets and bigger teams dominate. Increased competition means higher costs of marketing for you, so be mentally prepared to out-spend, out-wit and out-play these buggers!

Food for thought:

"Research shows that organic search engine listings receive about 75 % of all traffic, while sponsored listings using SEM only receives 25% of the traffic. Still organic traffic and traffic gained through SEM converts almost equally to buyers in percentage of the clicks. A normal conversion rate is claimed to be 1%-3%. These conversion rates are good. You should then keep in mind that the increase of using Search Engine Optimisation SEO over Search Engine Marketing SEM is approximately 270%!”

Source: http://www.relevant1.com/benefits-of-sem.html

Apple and Samsung both announced a decrease of market share recently, what are the consequences of this loss of market share for themselves, competitors??

Samsung faced tough competition from Apple at the higher-end of the smartphone market and from Chinese brands such as Huawei at the lower-end.

Apple’s loss of share is down to continued lack of presence in the entry-level category (aka: there’s still no budget iPhone) - where it’s losing volumes in fast-growing emerging markets such as Latin America. At the premium end of the smartphone segment Apple is continuing to perform strongly and on top of this, the lack of new features in recent releases has seemed to result in the company losing their market share.

Also, there are threats from Microsoft who had some significant gains in the European Union Five market compared to last year, climbing 5.3 percentage points even there was no growth in China over last year.

 Huawei and Lenovo are both threatening to take more marketshare from the market leaders.
Huawei is expanding swiftly in Europe, while Lenovo continues to grow aggressively outside China into new regions such as Russia.

 
If various governments approve Lenovo’s Motorola takeover, that joint company will prove an even greater threat to Apple and Samsung later.

What are the benefits and drawbacks of a search marketing

Search marketing, a process of gaining traffic and visibility from search engines through both paid and unpaid efforts. It encompasses:

    SEO: Earning traffic through unpaid or free listings

    SEM: Buying traffic through paid search listings

Below are the pros and cons of having a SEM:

Organic Search

Organic search are non-paid search result as compared to those paid ads.

Advantages:

It’s free! Search engines don’t charge to have our website come up in results.  However, it takes a lot of time and effort to develop the most relevant web presence. And in this business, time is money. Of course, we can hire an SEO firm to do it for us, which is an investment much easier to measure.

 

It’s trustworthy. People trust organic results a lot more than paid advertising. They are much more likely to click on organic listings than on a paid ads.

Disadvantages:

Lack of Control: there are a lot of factors and elements that are out of our control when dealing with organic results. What our competition does, our past history, and Google’s constantly evolving result preferences are all out of our control

Unknown Factors: Google is fairly secretive about what they use a formula for “relevant” sites. While we do know some general “best practices” Google likes to see, it’s not 100% clear what will drive your page to the top.

Paid search traffic

Paid traffic can take many forms including ads on search engines, ads within context, social media ads, etc. This type of traffic often takes the form of pay-per-click, where by clients only pay for visitors who have clicked on their ad.

Advantages:

Cost Control: with the payment set up, we can set budgets and limit how much we spend on a daily basis to ensure you’re not going over budget. Similarly we can manage each keyword’s bid to help target higher returning keywords.

Disadvantages:

Complexity of managing campaigns: There are a lot of settings, targeting, and optimization strategies that can be used for profitable campaigns. Organizing and strategizing these can take a lot of time and expertise.

Competition:  increased competition in this market has driven costs up, more so in certain markets.  Higher competition also means that those companies with big budgets and man power.

 

Conclusion

Search continues to become more and more complex as time goes on.  Paid search campaign shave introduced special shopping results, location extensions, and click-to-call capabilities. Organic results now feature local businesses, images, news, and even location adjustments.  What we can be sure of is that the landscape is constantly changing, so a real commitment to user experience and targeting is important in developing a search engine marketing campaign for any kind.

 

 

Apple and Samsung loses smartphone market share

Apple and Samsung loses smartphone market share

The recent report by Strategy Analytics showed that both Apple and Samsung had lost market share in the mobile phone market.  It is interesting to note that both Samsung and Apple actually shipped more devices during the first quarter of 2014 as compared to last year.  What this means is that both companies are still growing in the mobile market, just that they are not growing as fast as the market itself is.

The main reason for this drop in market share can be due to the fact that a bulk of the share is actually coming from emerging markets, especially China.  This is seen by both Huawei and Lenovo growing their shipments.  Both Chinese firms accounted for 4.7 percent of the market during the first quarter of 2014.

The emergence of more cheaper Android handsets are beginning to eat into market shares of Samsung and Apple and it is becoming more evident now.  Apple haven’t been catering to emerging markets and have yet to release any entry-level smartphone that is more affordable to consumers in these regions.   Innovation has played an important role in the success of the Apple’s products.  However, the lack of new killer features in recent releases has seemed to result in the company losing their market share.  This, coupled with the fact that there is a lack in an entry-level smartphone model, resulted in Apple losing their status as a the market leader over the years. 

Despite the lack of presence in this area, Apple is still performing very strongly at the premium end of the smartphone segment.  As a result, Samsung continues to face tough competition from Apple at the higher-end of the smartphone market and from Chinese brands such as Huawei and Lenovo at the lower-end.

Huawei is beginning to expand into Europe and Lenovo recently announced their plans to takeover Motorola.   If the takeover is approved, these companies will create a bigger competition for the two market leaders.

What are the benefits and drawbacks of search marketing?

Search marketing could be broken down into two entities. SEO (Search Engine Optimization) - Organic listing and SEM (Search Engine Marketing) – Paid listing. Search marketing have become an important part of a marketing plan, especially so, with the widely use of search engine. Starting as a directory, search engine evolved with the stellar growth of website and webpage on the internet. With this growth, search engines have become a new avenue for marketers, as part of their marketing campaign to acquire traffic and customers.

Out of the many, the top three search engines are Google, Yahoo and Bing. With 2 billion searches done daily on Google alone, it is now an important marketers’ choice for promoting their products or services.

Drawbacks

One of the main drawbacks of search engines, that have been a marketer’s nightmare, is that they are known to keep changing their algorithm in determining the ranking on the SERP (Search Engine Result Page). Search engines rankings also take a long process to be listed especially for organic listings. Apart from that, there is the steep learning curve for someone to do it themselves or the cost to hire someone to do SEO for their page. For a site owner, there is also the need to make sure that the contents are relevant and sites to be search engine friendly to be able to get a good result in their Quality Score. This is a long process, where site owners have to wait for the search engine spiders to crawl the site to get it listed.

For paid listings, there is the missed opportunity as many searchers would over-look the paid listing and click on the organic listings. For some popular search terms, it could be too competitive and expensive for small businesses.

Benefits

One of the benefits to search marketing is that it is measurable that you can directly measure its effectiveness when executing a campaign. Be it from the number of click-through to the number of views of the website. If you are using paid listings, your page could be listed as fast as within a few minutes. Many marketers found search marketing to be the most effective, with higher ROI compared to other traditional marketing. Another benefit of search marketing is that it is non-intrusive, whereby the person being marketed to is more receptive as they are usually somewhere in the buying cycle.

Implementing search marketing also improves visibility and particularly for paid listing, this result in immediate traffic. It is also the easiest to implement and has the ability for testing. The search result being presented to the viewers are also relevant to what they had searched for.

Apple and Samsung both announced a decrease of market share. What are the consequences of this loss of market share for themselves, competitors?

As what Strategy Analytics had announced last week, Apple and Samsung saw their smartphones market share declining when in fact the global shipment grew. It seems to show that the smartphones market are getting competitive. Apple and Samsung, being the market leaders, could no longer stay on their pedestal perhaps any much longer, compared to a few years ago.

No doubt, the two heavyweights are still the top two in the smartphones market, but the other players are catching up pretty well. Such examples are Huawei and Lenovo, players from China. As with any technology, new players are entering the market or old players who are catching up in technology, brought with them more choices for the consumers.

Both Apple and Samsung have in fact, their own pain points. Samsung, for example, is facing tough competition from Apple at the higher-end market and faces Huawei at the lower end. As for Apple, they are losing volume in the fast-growing emerging markets due to the lack of a ‘budget iPhone’. Even with the introduction of the iPhone 5c, it is still considerably not affordable for the masses in emerging markets in Latin America where Apple has seen a drop in shipment volume to this market which on the other hand result in tremendous growth for Huawei and Lenovo instead.

Huawei, as reported by CNET.com, has also been expanding swiftly in Europe while Lenovo has been aggressive outside China, especially Russia. Amongst the growth, the most growth seen are really not the top four but other small players in the market.

This is understandable, especially so since Apple and Samsung has by far been largely catered to the developed market, while it is still seen as too expensive for the emerging countries, notably India, China and Latin America. In contrast, the small players has seen growth in volumes in these emerging markets.

We could also see that there is little growth in the developed market at this point. Practically, almost everyone now has a smartphone and it has reached its saturation point. The only way for Apple and Samsung to overcome this stagnation would probably be to innovate and come out with something new or start making cheaper smartphones for the masses, to really overcome the drop in market share. 

What are the benefits and drawbacks of a search marketing

SEM is a form of targeted marketing that allows us to be able to advertise our business on search engine results pages. This involves bidding on keywords so that our ad is shown when those particular keywords or phrases are searched.  We then pay the bid amount every time someone clicks on the ad. SEM is advantageous because it allows us to target very specific audiences who are actively searching for our offering.

Advantages:

Get in front of a large audience

Search Engine Marketing gives us the ability to get our company name and services in front of a large, interested audience. In Google, alone there are over 400 million queries a day. Obviously not all would apply to our business, but we can get an idea of how many people we may be able to reach. The more visible we are to interested searchers, the more opportunities we’ll have to capture new customers.

Be as targeted as you want it to be

One of the main advantages to SEM is that it can very targeted.  Besides being able to bid on specific relevant keywords and phrases, platforms like Google Adwords allow us target based on specific devices, locations, times of day, and languages.

Cost effective

SEM can be very cost efficient. It’s cheaper than traditional forms of advertising such as TV or Radio, and it’s also better targeted. Since we’re only paying for clicks to keywords or phrases relevant to our business, it allows us to spend our marketing dollars wisely.

Disadvantages:

SEM requires time and ongoing maintenance

Search engine marketing requires that we monitor and update our campaigns constantly. It takes time to figure out the right combination of ad text, targeting, and bidding. That’s why testing is a critical aspect to SEM, in order for our campaigns to ultimately be successful and profitable. Whether it’s making sure our spend isn’t getting out of control, or testing different ad copy to see what works best, we could be missing out on opportunities if we’re not constantly monitoring and analyzing our results.

Can be cost prohibitive

Even though we previously stated that SEM was cost efficient, it can also be cost prohibitive depending on our space/ industry. Popular keywords can be very expensive sometimes costing $30 dollars or more per click. Since PPC advertising is essentially an auction system, it may be tough to out bid competitors with deeper pockets and larger budgets.

Also if we don’t have the necessary expertise, which most people don’t, we may not be running our campaigns as best as we could and therefore be overspending. We may need to invest a little time getting up to speed.

Conclusion

Having a well-rounded online presence is essential to our business growth and SEM is a great way to do it. The advantages of SEM can outweigh the disadvantages, but every company is different. SEM is definitely worth trying out – Use a small test budget to see if it works for our biz. By focusing on longer keyword tail phrases, we may be able to narrow in on more profitable phrases with less competition, therefore keeping our marketing spend down.

Apple and Samsung both announced a decrease of market share yesterday, what are the consequences of this loss of market share for themselves and for competitors?

Apple and Samsung both announced a decrease of market share yesterday, what are the consequences of this loss of market share for themselves and for competitors?

Market share losses are signs of long-term problems that require strategic adjustments. For tech giants like Apple and Samsung, this is an early indicator of future opportunities in a new market - wearable technology.

Why? To retain their existing share of high-end smart phone market, a truly revolutionary product will need to be developed and be integrated with the existing high-end smart phone user experience. This means a wearable device that will alter the way we use our smart phones (e.g. health monitoring, nutrition management). Samsung has already started working on wearable devices and in this month, they have released two smartwatches and an activity tracker. The world's largest online retailer, Amazon, just launched a new section for wearable device shopping where consumers can learn more about the possibilities of wearable technology - a clear sign of the next big thing in digital technology.

The loss of market share is also an indicator of both tech-giants problems in the entry-level smart phone market.

The iPhone5C was a flop for the low-end smart phone market. It is a cheaper iPhone but not cheap enough. With 2^nd tier brands like Xiaomi and Huawei entering the mid to low-end market, Apple and Samsung will need to continue to drive true innovation in this market segment and offer truly competitive prices. This will have to be faster than the growth rate of these 2^nd tier smart phone brands in the market.

As for the competitor brands, they will continue to enjoy the free-rider effects just by studying the market leaders’ technology and strategies. They will still be able to provide quality smart phones at unbelievable value-for-money prices at their local market. Perhaps this is why the patents infringement lawsuit is so important to Apple as a message to the rest of the other players in the market. And perhaps that is why Xiaomi never compared itself as China’s Apple but more like Amazon where they monetise their audience quickly through selling services to its users.

Now, the winner shall be the one who has the more popular hardware and the backend infrastructure that can support convenient services like e-commerce and mobile payments in our daily activities. Too bad iPhones don’t come with Near Field Communication (NFC) chips. Yet. There are already many NFC-enabled mobile phones in the market, but there was never one that had a large enough consumer group that could drive the need for NFC-enabled point-of-sale systems on the supply side. 

Search Marketing...

The wins for Search Marketing

Ability to target

The ability to segment, target and zoom in on the right audience is the key to success for any marketing campaign.

Marketers are increasingly excited by ways which they could target their audience and techniques like programmatic targeting and re-marketing provide additional firepower for marketers.

Measure, tweak and adjust almost instantly

In the past, it took a long time to even gather results and some results are often aggregate results based on extrapolation and/or approximation (e.g. AC Nielsen TV ratings, circulation audits of publications etc.). The time lag between measurement, understanding the numbers and follow-up marketing actions allowed for very little flexibility for marketers.

Never has there been a time when marketers could monitor almost real-time results, make necessary tweaks to their marketing campaigns and adjust their tactics/plan almost instantly. Marketers can look at keywords used, monitor web traffic and make any adjustments they want and opens up many possibilities to test/optimise different creatives, messages, offers with their target audience.

Draw-backs or pitfalls...

Complexity and Effort

Search marketing is getting or already complicated. Understanding how to optimise sites and/or wanting to improve SEM and persistently wanting to do it well is becoming extremely complex.

Trying to improve one’s ranking for natural search at any point in time is already complex enough. It does not help that internet is really a big battlefield where everyone is trying to game the rules and search engines are also constant changing the rules to ensure fair play and marketers can get caught out. Keeping up requires understanding of these complexities and when the goal posts are shifting.

Wanna find out more about complexities of optimising? Check out how "animals" like Penguin or Panda could possibly penalise you rightly (or wrongly). Even big brands get it wrong amid the confusion and even Google themselves get penalised... (what irony)

Costs

If your marketing budgets are small, it will be bare register a ripple in the water (see Mistake no.9). It’s unlikely that marketers are able to carry out all the optimisation themselves for search marketing themselves without hiring consultants/agencies. Being successful requires high level of persistence and it’s not a one-time effort for any marketer.

The website experience, your product or service still matters

Yes, search marketing isn’t the silver bullet that will end the war, while marketers can do excellent work in search marketing and bring people to your site. Having a bad website that gives a bad experience, poor content will put all the work into waste.

It’s also important for marketers to remember that the product/service still matters, the end goal is still to convert traffic into leads/sales!

Both Apple and Samsung reported a drop in their market share

Samsung shipped 89 million smartphones worldwide and captured 31 percent marketshare in Q1 2014, dipping slightly from 32 percent a year earlier. Meanwhile, Apple shipped 43.7 million iPhones worldwide for 15 percent marketshare in Q1 2014, falling from the 17 percent level recorded during Q1 2013.

The reason behind the dip could be due to market saturation and competition. While things are slowing down at the high-end of the smartphone market, there is intense competition from the lower-tier smartphone brands.

Saturation – In need of product innovation

Consumers are become more reliant on their smartphones as days go by. While both Apple and Samsung have been launching new models, each new model comes more as an “enhancement” rather than with “ground-breaking technology”. This lowers the motivation to upgrade or switch to another phone.

Consumers are seeking for a better entertainment experience – for viewing and gaming. Perhaps a 3D experience (be it in area of viewing or printing) would create a big buzz. Also, the society is moving towards a cashless society. Hence, it will be beneficial if the smartphone which they are holding could allow consumers to experience easier in-store transactions, example “scan to pay” or “click to pay” within premises. Wearable gadget is also another area to explore.

Consumers are expecting a lot more and companies that pursue innovations will thrive in this smartphone war.

Competition – Price factor

While smartphones are common in our everyday life, smartphone adoption is very much still on the rise in fast growing emerging markets like China, India and Latin America. There are many consumers who will be shopping for their first-ever smartphones. Hence, a lack of presence in the entry-level category continues to cause both Apple and Samsung to lose volumes in this area.

Strong competition in the emerging markets include Huawei and Lenovo. And Lenovo continues to grow aggressively outside China into new regions such as Russia. If the recent Lenovo takeover of Motorola gets approved by various governments in the coming months, this will eventually create an even larger competitive force that both Samsung and Apple must contend with in the second half of this year."

Strong support for operator subsidies in these markets is also important as this will determine the price factor for smartphones. Having low-priced smartphones are particularly critical for generating growth in the market and fuelling a switch from even lower-cost feature phones.

How to make a cheese wall?

When you walk into a DIY shop and you are looking for “that thing that has a handle and that screw thing that spins and goes grrr grrrr” Search Marketing is the salesman that will tell you: “drill ah! Power or Hammer?” You reply with a “make hole in my wall” and he will tell you “power drill”. He continues to ask you what type, how often you are going to drill etc” 

Source: ergoemacs.org

The salesman continues to bombard you with questions and provides a more specified type of drill catered to the cheese wall you have planned for your wall. He is your Search Marketing. He is trained to know what you are looking for in your simple terms. This is the benefit of search marketing. The salesman would not waste your time showing you the hammer or the toolbox. After you buy your drill, he shows you the drill bits expansion set, or even another set that can double as a hammer drill known as the combo drill. This is another benefit of Search marketing; it tries to predict what else you might look for as well.

In the first place, for all the above to happen, the salesman has to be trained. He has to know the products that he is selling well. All of this is time and money invested. The shop would have to spend resources training the salesperson in order to secure sales. Just like search marketing, he has to know which drill would make holes in walls and which drills would drive the screw in. This constant updating and monitoring of new products is time-consuming. But changes would last a long period of time and often producing a long term result. And if the customer is happy with the service and product, it would return as a customer, hence driving free traffic just like how search engine optimization works.

Of course a shop must exist for the customer to walk in. Just like how businesses must have online presence tied it with a good website to drive people to their site. The advantages of SEM can outweigh the disadvantages, but every company is different. It all boils down to meeting the needs of the customers. The “thing that has a handle… and make holes” etc are all search keywords for search engines to drive these people to websites that sells drills. Business will need to know the language of the customers and this could prove to be the most difficult yet most essential.

And now, I have two drills at home, feel free to borrow!

Impact of Loss of Market Share

Today, the advancement in technology and its influence is so salient that social media plays a significant role in helping consumers decides between competing brands. The level of competition is so stiff, that the idea of brand loyalty or monopolizing market shares becomes a thing of the past. For instance, Nokia from Finland was once the leading brand for mobile phones, in the early stages of mobile phones but in this day and age where smart phones has become the norm, Nokia's market shares has since then taken a beating to the likes of the dominating Samsung of Korea and Apple from the United States of America. Once the loss of competitive attractiveness, consumers will lose interest in the products and it will make it more difficult to win back customers when you lose them.

Both Apple and Samsung are being squeezed as Apple and Samsung wins high-end users from one another and Xiaomi, Lenovo, HTC, Huawei and others pack advanced features into inexpensive models. They are not growing as fast as the global market, especially in emerging mid-market.

Even though Apple increased sales over year-over-year, but due to lack of innovation and loss of Steve jobs' leadership in Apple, competitors have chance to gain market share if they have new and innovated products. Apple has not shown new innovation in the pipeline and hence lost its shares to cheaper Android sets such as Xiaomi, Huawei in China. Apple needs to have product differentiation rather than a low cost product (iPhone 5C – a blotched case). A low cost product is not a good long term strategy for Apple.

Samsung too is facing slumping profit growth, even though the percentage of loss of market share is smaller as compared to Apple. Samsung is trying to make its mobile unit less dependent by shifting strategy. It will make an all-out effort to make the most of the lower-end market as it is the biggest and fastest maker of the cheap handsets as many competitors are able to mimic the newest and latest technology. Importance of a product specification is not as important as a differentiated marketing strategy for Samsung.

Competitors such as Xiaomi, it's strategy is to increase market share and hence designs its phones with high-end specs and sells them at midrange prices. Even though Xiaomi phones are not of the same quality category as Apple & Samsung yet, but the company entices its consumers at an affordable price, the principal factor for many consumers in China and emerging markets. However Xiaomi is still weak in terms of sales in the conventional market and through telecom channels and it will lose its pricing advantages if it has to share its profits with retailers.

With more competition from either ends, this could lead to lower pricing for consumers. The cost in production could increase for the fear of infringement of copyrights and hence lowering profits. An example would be the case of Apple and Samsung lawsuit case that’s ongoing.

Apple and Samsung both announced a decrease of market share recently, what are the consequences of this loss of market share for themselves, competitors??

Year 2014 is expected to cause a lot of stir in the Smartphone market for the manufacturers and users for several reasons:

1.       The number of smartphones shipped will go up to 1.2 billion in 2014 from 1 billion in 2013 – a YOY (year-on-year) growth of 19.3%, down from 39.2 % in the previous year. In Q1 of 2014, Samsung and Apple have seen their market shares slide down by 1.7% & 1.6% respectively, whereas brands like LG, Huawei, Lenovo and Others are gaining market shares in the range of 0.3% to 2%, as compared to Q1 of 2013 (Source: IDC)

2.       Last year saw 322.5 million smartphones under $150 being shipped. Many smartphone announcements in this Price Range have been made for this year, with some prices going as low as $25.

3.       Microsoft’s acquisition of Nokia last week for $7.2 billion has made marketers wonder on their strategy. Microsoft’s initial strategy while acquiring Nokia was to change its ‘horizontal’ strategy of selling software to hardware makers to ‘vertical’ strategy like Apple’s, to manufacture software as well as hardware

4.       Lenovo acquired the Motorola Mobility business from Google at $3 billion earlier this year

The consequences of these developments are following:

1.       6 countries are contributors of 50% of the mobile phone market. Even though their total mobile phone penetration is high, there is a large opportunity in the Smartphone market. As worldwide growth slows and mature markets become saturated, the price of the smartphones will be the primary driver to gain market shares in these emerging markets. Average smartphone price has fallen from $443 in 2011 to $335 in 2013 and is expected to reach $260 in 2018 (Source: IDC)

	Country	Mobile Phones	Population	Penetration (%)
		Total		Mobile Phone	Smartphone
-	World	6,800,000,000	7,012,000,000	97.00
1	China	1,227,360,000	1,349,585,838	89.20	46.90
2	India	1,104,480,000	1,220,800,359	90.47	16.80
3	United States	327,577,529	317,874,628	103.10	56.40
4	Brazil	273,583,000	201,032,714	136.45	26.30
5	Russia	256,116,000	142,905,200	155.50	36.20
6	Indonesia	236,800,000	237,556,363	99.68	14.00
	Total	3,425,916,529
	% Contribution	50.38

2.       Local manufacturers will pose a threat to the international giants – Samsung & Apple in the emerging markets. This is an interesting graph showing how 7 Local Smartphone manufacturers in China & India together (Huawei, ZTE, Lonovo, Coolpad, Xiaomi from China and Karbonn, Micromax from India) have had their market share go up continuously to achieve 11 times growth in 3 years’ time, thus overtaking Apple’s share and closing in on Samsung’s share.

3.       Sony, Xolo, Micromax and Archos are set to enter the Windows Phone smartphone market starting this year. Considering the fact that Nokia is already under Microsoft, it would be interesting to see if Windows Mobile leverages on these brands with an enhanced OS.

4.       Lenovo is growing aggressively into new markets outside China such as Russia. Its acquisition of Motorola mobility would give its market share a major boost, as Motorola is no. 3 manufacturer in USA.

So, what should Samsung and Apple do to maintain their foothold in the Smartphone industry:

1.       Work with network operators to offer bundle deals in emerging markets like they do in mature markets.

2.       Breakthrough in OS – to retain their edge and position of leadership

3.       Enter the Phablets market with a bigger screen size – Iphone started off as a large screen device but features nowhere now in the Phablets market with screen sizes ranging from 5.5 to 7 inches

4.       Low end products – While Samsung has a full range of smartphones, Iphone may need to launch a low priced smartphone to maintain its market share in emerging markets in long run.

5.       Smartwatches and other wearable devices may be the right way to go to upset the balance in the smartphone market.