Huawei, a prominent communications technology and smart device maker, produces smartphones and laptops that compete with the likes of Apple and Samsung. Based in China, Huawei has spread its influence throughout the world. Huawei leverages its technology, marketing and unique sales channels to boost growth, but faces increasing pressure from policymakers internationally, making its future as the number two smartphone seller by market share uncertain.

Apple and Samsung were long thought of as the untouchable top two smartphone manufacturers. However, as of August 2018, Huawei outsold Apple to become the number two smartphone seller by market share. According to the International Data Corporation (IDC), Huawei sold 54.2 million units in 2018, giving it a 15.8 percent market share in the tech smartphone market. In comparison, Samsung and Apple had 20.9 and 12.1 percent market shares respectively.

While Huawei outsold the U.S. tech giant, Apple historically has strong Q2 sales right after it releases new smartphone models. This means that Apple could overtake Huawei in Q2 before falling back down again. This flip flopping will stop once Huawei takes a decisive step ahead of Apple. Huawei’s market power grew 30 percent from 2016 to 2017 and 40 percent from 2017 to 2018. If this trend continues, Huawei may surpass Samsung. Samsung already has weak presence in China, which accounts for a third of Huawei’s annual sales, according to Huawei’s 2017 Annual Report. Furthermore, Samsung growth is flattening after a weak 2018 fiscal year and reported a 10 percent decrease in Q4 revenue from 2017 and 29 percent down in quarterly operating profit. If Samsung ends up excluded from China, Huawei could overtake Samsung to be the number one smartphone seller by market share.

One reason that Huawei captured so much of the market is its product pricing. Huawei has a much more diversified product portfolio than Apple. Similar to Samsung, Huawei has numerous models of high-end, mid-range and budget smartphones, which attracts more diverse consumers. One of Huawei’s best budget models, the Huawei P Smart, sells for around $200 on Amazon, as compared to the iPhone 7, which costs $449. Having a range of product offerings allows Huawei to appeal to more diverse consumers, especially in low income communities. In contrast, Apple charges a premium for its products, alienating a segment of consumers who cannot afford them. With a wider array of product offerings, Huawei has a competitive advantage against Apple in appealing to a larger market.

Huawei’s budget phones still offer premium features, allowing them to give customers the quality of an iPhone at a much more affordable price. Huawei’s Mate 20 Pro competes directly with the Apple iPhone X and the Samsung Note 9. It also carries a camera that rivals that of Google Pixel, widely regarded as the best smartphone camera according to Business Insider. The Mate 20 Pro has an in-screen fingerprint sensor, which allows the user to unlock the phone from anywhere on the screen. It can charge 70 percent in 30 minutes and has a massive 4,200mAH battery. According to Wired, the Mate 20 is “the phone the iPhone XS should be.” On the tech front, Huawei competes well with Apple and can outcompete iPhones in terms of tech specs. Tech review website CNet says that Huawei is providing customers with alternative phones that rival the quality of an iPhone.

Huawei is dominating the smartphone market because of its unique sales channels. Data from Apple’s 2018 10K shows that roughly half of the company’s sales are dependent on American markets. Huawei, excluded from U.S. markets and only earning just one third of its sales from China, is far more diversified in international markets. Further, in the U.S. most cellphones sold are connected to a carrier such as T-Mobile and AT&T. However, in Europe, smartphones are sold through smartphone dedicated stores, giving consumers a larger variety of options. Huawei also has $7,849 million USD in business to business (B2B) sales in 2017 with expectations to reach around $11,400 million USD in 2020 to complement its consumer sales. With more diverse sales channels and freedom selling through smartphone stores, Huawei is far ahead of Apple in making customer connections.

To compensate for limited presence in American markets, Huawei focuses its efforts on marketing internationally. As mentioned in Marketing Week, Huawei hosts photo competitions that are judged by its Artificial Intelligence (AI). Huawei uses this competition to promote the AI capabilities of its smartphone cameras. Huawei’s Chief Financial Officer, Meng Wanzhou also constantly travels and meets with heads of state, giving more publicity to Huawei’s products. Huawei’s 2017 Annual Report states that the number of non-Chinese consumers considering Huawei doubled. It is the second most recognized brand in Germany, Italy, Spain, Finland and many other European countries. Another facet of Huawei’s marketing and business model is government advisory, which Huawei mentions in its 2017 Annual Report. Huawei has partnered with many global governments to improve their economic standing and help with national issues. For example, Huawei helped the German government implement optic fiber 5G networks to its wireless base stations. This has contributed to the quick spread of Huawei around the world, compared to Apple, which has little involvement with foreign governments.

Huawei stands out by investing heavily in Research & Development (R&D). According to Apple’s 2018 10K filing, it dedicates only 5 percent of its net sales to R&D, while Huawei proportioned 14.9 percent of its net sales, or $13.2 billion USD for R&D in 2017 alone, according to its 2017 Annual report. As reported by Reuters, Huawei plans to dedicate $15 billion USD in 2018, keeping in line with its huge R&D spending. As a result, Huawei currently has 74,307 patents, with more than 110,000 patents filed and pending. In contrast, Apple has 75,000 patents with only 10,000 filed and pending. It is important for companies in the smartphone sector to innovate quickly. Samsung’s and Sony’s waterproof phones and Samsung’s Galaxy Note Edge – the first phone with edge-to-edge display – generated buzz and improved sales. Huawei seeks to join the ranks of these innovators by including three back camera lenses, in-screen fingerprint sensor and wireless charging to other phones. Huawei’s R&D progress speaks for itself and helped propel Huawei to the number two smartphone manufacturer by market share. Apple needs to increase its R&D if it hopes to compete technologically with Huawei. While Apple’s phones sell as a status symbol, Huawei’s phones sell because of their functionality.

Huawei seems to be in a good place competing with Apple, but there are risks in its future. Richard Yu, Chief Executive Officer of Huawei’s consumer division, claims that it can overtake Samsung in terms of market share by 2020 despite losing the U.S. market, according to a January 2019 article by Reuters. However, the U.S. has warned against Huawei since 2012. In 2018, the U.S. increased its accusations of espionage against Huawei, claiming that its smartphones, cloud and network are backdoors that allow the Chinese government to hack user data. Countries such as the UK, Australia and Canada are considering banning the use of Huawei devices in their governments and by their citizens. Canadian officials even arrested Huawei’s Chief Financial Officer, Meng Wanzhou, on December 1, 2018. Huawei will need to be able to survive U.S. accusations and masterfully navigate the political atmosphere to remain competitive.

If Huawei’s efforts to prove its innocence are not successful, they will lose much of their current market share. Despite current strong sales in Europe, government regulation around the world has already limited Huawei to far fewer markets to participate in and sell, plummeting their sales. For example, Huawei’s Australia revenue plummeted by $50 million from $673 to $623 million due to delays in product rollouts. According to Bloomberg, Deutsche Telekom, one of Huawei’s biggest customers, is considering disassociating with Huawei, which would cost Huawei an estimated €20 billion. In the U.S., Huawei was repeated blocked by the government from partnering with providers such as AT&T and Sprint. Huawei’s America’s revenue, which accounts for 39.39 percent of its sales, decreased by 10.9 percent from 2016 to 2017, according to Huawei’s 2017 Annual Report.

Despite the slowdown in dominant European and American markets, Huawei’s presence in emerging markets should continue growing. Gene Jiao, President of Huawei Consumer Business, Middle East and Africa, claimed that shipments to those regions grew 76 percent year over year in 2018 and revenue doubled. Huawei is dominant in Egypt, Jordan and Lebanon, with Jiao claiming that Huawei is planning to expand in United Arab Emirates and Saudi Arabia. Bloomberg analysts have even recommended that Huawei begin focusing on expanding in emerging markets instead of developed markets, given the situation they are in.

While the current political atmosphere and spreading weariness of Huawei hold back growth, increasing presence in emerging markets and smartphone quality positively drive Huawei’s growth. Huawei’s future is contingent upon if they can improve their public relations in the face of U.S. accusations, and only time will tell if they can dominate the market.

Apple effortlessly topped Forbes Magazine’s 2016 list of the world’s most valuable brands with a net value of $154 billion, almost twice that of Google in second place. In fact, the total revenue of Apple is so big that it is larger than the GDP of Hong Kong. With the iPhone as the company’s leading money maker, Apple made more than $18 billion in the first quarter of 2016, the most any public corporation has ever made. But how did Apple achieve its unparalleled degree of brand loyalty, and what business strategies made the iPhone so successful?

In 1972, Steve Jobs was inspired to focus on design by a calligraphy course taught by Robert Palladino at Reed College in Portland, Oregon. Today, Apple’s best known traits are its simple aesthetics and attention to detail. Although very little is known to the public about the company’s design process, it is apparent that design is Apple’s top priority in creating any product, especially the iPhone. According to Mark Kawano, founder of Storehouse and ex-senior designer at Apple, the reason that Apple products are designed so well isn’t that Apple has the best design team in the world, but that everyone at Apple cares about design, not just the designers. It is with this design and attention to detail that the iOS user interface, focused on creating a natural consumer experience, sets the iPhone apart from its competitors by creating an iconic, cult-like branding.

Looking at a few of the many examples of the iPhone’s small design features can show some of Apple’s meticulous attention to detail; in fact, many of these features are so naturally integrated into the operating system that they go unnoticed by the average iPhone user. For instance, on iPhone’s iOS 9 home screen, the older arrow button and slider are removed and replaced with a more minimalistic design of using “slide to unlock” text instructions that actually shine in the direction that the screen slides in. On newer iPhone models, many owners have noticed that when receiving a phone call they are presented with either accept and decline buttons or a “slide to answer” slider. The slider only appears when the phone is locked so that phone calls aren’t accepted or declined by accident.

With the newly released iOS 10, Apple further demonstrates its ability to keep up with current trends while remaining true to design by adding drawing and music sharing capabilities to their messages app through an expanding icon bar; this keeps the initial text box clean and simple. In fact, Apple’s simplistic design and extreme attention to detail have become so iconic that even the process of unboxing an iPhone is engineered with a series of arrows and stickers to please the consumer by slowly revealing the iPhone.

Similar to the iPhone, Apple’s stores and website are just as iconic. Apple is able to not only make a consumer-oriented iPhone experience, but also a consumer-oriented iPhone purchasing experience. For example, a simple look on the iPhone 7 website reveals how all of Apple’s selling points for the iPhone 7 are focused on the consumer experience. Apple advertises the iPhone with phrases such as “best performance and battery life,” “advanced new camera” and “brightest, most colorful iPhone,” all of which don’t necessarily use technical jargon to brag about the new features of the iPhone, but appeal to the large majority of consumers by using words that are universally understood. Instead of mentioning competitors by comparing how the iPhone is superior to alternative smartphones, Apple advertises the iPhone as if it is the only phone in the world, comparing its statistics to the previous iPhones using phrases such as “2x faster than iPhone 6” and “longest battery life ever in an iPhone.”

Using this clever advertising technique, Apple is able to market each new iPhone as an improvement to previous iPhones, generating constant sales for every new iPhone release. As for the iPhone 7, there has been controversy at the time of writing of this article regarding the lack of the headphone jack and Apple’s failure to release initial sales figures. Though Apple may be hiding the fact that the new iPhone may not be as profitable as the iPhone 6, its sales are still significantly higher than those of the best-selling android phone, with Ming-Chi Kuo of KGI securities estimating 70 million shipments of the iPhone 7 in the last quarter of 2016 compared to 13 million for the Samsung Galaxy S7 Edge for the first half of 2016.

Looking at the design of Apple stores themselves also provides insight on how Apple brands the experience of purchasing an iPhone. With massive floor-to-ceiling windows at the entrance of each store, Apple stores are made to stand out with generously high ceilings, a clean modern look, copious walking space and, according to online expert averages, an average of $315,000 worth of iconic wood furniture per store. Apple is able to make shopping for an iPhone an experience that is truly enjoyable for the consumer. Their store design closely resembles their product design philosophy, creating a pleasantly predictable experience for consumers. Essentially, Apple has made the iPhone more than just a smartphone, but an integral part of consumer’s lives, and perhaps even a lifestyle.

Incorporated in the iPhone’s simple and detail-oriented design are multiple mechanisms that ensure that anyone who purchases an iPhone becomes an iPhone user forever. According to Slice Intelligence, 85 percent of 5,703 shoppers who bought the new iPhone 6 and iPhone 6 Plus on opening weekend had previously been using iPhones. Apple’s gradual changes in design, though viewed as a nuisance by some critics, create incentives to upgrade to the new iPhone, and its use of applications such as iCloud, iMessage and the App Store, which are exclusive to Apple devices, create preventative barriers to switching smartphones.

The iCloud connection between iPhone and Mac devices makes it tough for users to switch from iPhone back to another smartphone. With the newest iCloud features allowing consumers to sync Photos, Notes, Calendars, Contacts, and Documents on both their iPhones and their Macs, these users are discouraged from switching either their computer or smartphone devices to other brands since the iCloud features are unique only to Apple products.

In addition, Apple’s release of iMessage, an Apple ID-based messaging system that sends texts through Apple’s servers, has made it even harder for iPhone users to switch to other smartphones. Since iMessage can also be connected to Mac computers, Apple is able to further integrate its devices as consumers can send iMessages from Mac computers to other iPhones. In fact, the iPhone has become so popular that according to CEO Tim Cook, Apple’s iMessage system sometimes handles up to 200,000 messages per second. When compared to competitors such as Google’s “Hangouts,” iMessage retains the business edge by remaining exclusive to Apple devices, while Hangouts can be used on any web-browsing device. The high volume of communication exclusively between iPhones discourages users from switching to other brands and effectively creates a barrier to entry in the smartphone market.

With Apple’s clever business model and commitment to detail, it has become one of the most profitable companies ever. Its aesthetic, consumer-friendly products such as the iPhone are able to hold large profit margins and appeal to a broad customer base. The success of iPhone goes to show that businesses can make a lot more money by focusing on design and consumer retention.

From Angry Birds to Instagram to Google Maps, it is fair to say that mobile technology is becoming increasingly essential in our daily lives. We use our cell phone not only to make calls or text friends, but also for private dealings such as managing our bank accounts, emailing our employers and even trading stocks. The name of the game seems to be convenience. Never has it been easier to check email, view bank statements, or buy useless junk online. Just scan a finger and gain access to heaps of personal information. The latest fad is digital wallet services such as Apple Pay, but with so much of our personal information already stored on our phone, where do we draw the line?

It has been over a year since Apple released Apple Pay in October of 2014, and it is off to a slow start. According to the research body Aite Group, only one percent of all retail transactions performed in the United States are through Apple Pay. Furthermore, only 13% of the 1500 people surveyed by and InfoScout even said they had tried the service. Yet, even with Apple Pay’s subpar results thus far, expect to see digital wallets come into fashion within the next few years.

What is Apple Pay? In one sentence Apple Pay is a digital wallet that is more convenient and secure than traditional plastic credit cards. Apple Pay utilizes a technology called near-field communication (NFC), which allows it to send secure credit card data directly to enabled readers over lengths of around four to five inches. As a result, Apple Pay allows you to pay by holding your phone close to a reader and scanning your fingerprint. In addition to Apple Pay, Samsung and Google have recently released their own digital wallets: Samsung Pay and Android Pay respectively. Just as their names would suggest, they are very similar to Apple Pay.

A significant part of the reason that Apple Pay is off to a slow start is that the infrastructure of mobile payments was not in place at the time of release. According to Strawhecker Group, a payments consultant company that specializes in advisory services, only 27 percent of U.S. retail stores have the upgraded checkout terminals with the NFC technology that Apple Pay needs to work. In addition, those who have tried using any of the three mobile payment systems often report that employees are generally unaware of how to react to mobile payments.

Recently, however, a significant amount of progress has been made to make Apple Pay more accessible. Apple has partnered with PayAnywhere, a company that sells Apple Pay compatible card readers. The newest readers, as a result of the partnership, will retail for a meager $40, and as an added bonus will have no transaction fee for the first $5000 of transactions. As a result of the declining prices of NFC enabled card readers, small businesses in particular are quickly upgrading their terminals with these cheap card readers. Furthermore, Apple CEO Tim Cook stated at Apple’s quarterly conference call that they are “on track for Apple Pay acceptance at over 1.5 million U.S. locations by the end of 2015” and that Apple Pay is adding 80,000 small and midsize businesses every month. Moreover, over the year that Apple Pay has been available for the public, Apple has used its influence extremely well in the world market to convince banks to accept Apple Pay. Apple Pay now works with over 500 banks around the world, and more are constantly being added. Finally, Apple has said that it will be adding the ability to register loyalty cards (yes, Starbucks included) with Apple Pay, an important feature that makes using Apple Pay even more convenient.

In addition to businesses, Apple Pay is also targeting colleges and universities. Cook announced that 700 U.S. colleges and universities will accept Apple Pay in the coming school year. The first of them is the University of Oklahoma, which on September 1st became the first college to fully accept Apple Pay across its campus. The students are able to use Apple Pay at over 400 locations around campus, including bookstores and restaurants.

The most valuable feature of the digital wallets, however, is not convenience, but rather security. Many consumers who are unaware of the method in which Apple Pay works, often assume that Apple Pay is less secure most likely because it has not been in use as long as plastic credit cards. This is absolutely incorrect as digital wallets are considerably more secure than plastic credit cards.

Apple Pay, along with Samsung and Android Pay all use the same form of security. All three require you to enter a password or fingerprint to access the wallet and pay for goods. Moreover, the full credit card number is not displayed so even if you lose your phone, thieves will not be able to steal your credit card information. Comparing just those facts to the old, brown leather wallet you probably have in your back pocket right now, digital wallets offer substantially more security. The important difference, however, is in the way that digital wallets send credit card information.

After paying with a card, the digital wallets send a 16-digit token to your phone that acts as a temporary dummy credit card number so that if a hack occurs the hackers will only get a useless dummy number, and not the actual credit card information. With hackers becoming increasingly organized and adept at stealing credit cards – remember that giant Target hack in the winter of 2013 in which 40 million credit card numbers were stolen? – digital wallets provide a much needed extra layer of security. In the words of Catherine Pearce, a security consultant for the mobile and cloud security provider Neohapsis, “Mobile payments have the capability to be far more secure than mag-stripe or even chip and pin credit cards, while being more convenient.”

Digital wallets offer better security, more convenience and are almost frighteningly easy to use. So is there a reason not to start using them? The answer is a resounding no.

The number of NFC compatible readers is nearing the threshold at which point consumers will demand that they are in use universally, and business are scrambling to upgrade their terminals to match their competitors. Moreover, digital wallets like Apple Pay are beginning to seamlessly integrate loyalty cards into the payment process and they have potential to do much more. Digital wallets could in the future have applications that help track spending and possibly even have options to set transaction limits on certain cards. Now, nearly all new smartphones either come with a preinstalled digital wallet, or one that can be easily downloaded. There is no doubt that the age of digital wallets is coming. The best thing for you to do is register your card and join the future.

What is an Apple product release day without the frenzied furious tweets, the tortuous lines that outdo any Black Friday queue, or the live coverage on national television? The blockbuster launch days of Apple products have thrilled the world time and time again. But I am surprised to say that there will be no metal barricades in sight this time around for the hugely anticipated Apple Watch.

The release of the Apple Watch marks a significant milestone in the company’s history, as its first venture into the smart “wearables” market and the first product whose earlier iterations were not created under Steve Jobs, but rather under current CEO Tim Cook. It starts an entirely new category of products for the company that I am bemused to see is uncharacteristically a latecomer to the smartwatch scene.

A completely new sales strategy accompanies the new product line, which forgoes the long in-store queues by shifting purchasing processes online. To browse physical samples, prospective buyers of the Watch must book a fifteen-minute “try-on” appointment with Apple.

Although the Apple Watch represents many new developments for the company – an entirely new product line, a new marketing strategy, a new stage in the company’s growth – one thing that remains constant is Apple’s attention to design. The Apple Watch looks great with its sleek, sophisticated lines of cool metallic sheen. In terms of design, Apple has proven to be still far and ahead of its competitors – especially Samsung’s range of smartwatches that resemble having a band-aid wrapped around your wrist.

But once I was past the design of the Apple Watch, I must confess I ended up wondering what exactly I would be paying for if I were to buy the Watch. Despite the fact that it comes with enough functions that it could very well be a wrist worn computer, I am still at a loss as to what, in essence, it does. I cannot see it as anything above unnecessary and impractical.

We currently live in a world where the traditional function of the watch has long since been minimalized. Even in my room, I already have three sources from which I can tell time – the bedside clock, the right hand corner of my laptop screen, and my phone. The watch has become solely an accessory.

In addition, the Apple Watch is linked directly to your phone, so that any notifications such as text messages, emails, or phone calls, would be directed simultaneously to the Apple Watch by vibrating on your wrist. While this might pertain to Apple’s statement that the its watch is its “most personal device ever,” I question whether this is an effective function. With my Macbook linked to my iPhone, I had multiple devices ringing at me whenever I received a notification and I’ve always checked either my phone or my laptop – never have I used both to check the same notification.  Adding the Watch to this hodgepodge of gadgets entails turning off yet another ringing bell, or charging yet another device every night, as I’m sure many of us already do in our technology-dominated lives.

Having the Watch ring with notifications while strapped to our wrists is also highly likely to create some socially problematic situations.

For instance, after spending a week with the Apple Watch, Bloomberg’s Josh Topolsky noted that while he was alone or on the go, checking notifications on the watch was not a hassle. When he was in meetings or even casual conversations, however, looking down at the Apple Watch when it vibrated immediately took the form of rude behavior.

Turning off the notification setting would unlikely solve the problem. The wearer has to either look down once in a while to see if any messages have arrived or sacrifice the watch’s primary functions in their near entirety.

Apple advertises other functions of the Apple Watch that are also available on the smartphone, such as the use of Google Maps and the ability to take pictures and videos.  On a half-inch screen, the practicality of these capacities is absolutely minimal, perhaps saving the wearer the ever so troublesome action of taking out their phone in return for squinting at a 14 millimeter wide watch face ($50 more expensive than the 38 millimeter version).

Admittedly, it does have functions unseen in the iPhone, such as the ability to send your heartbeat to another Watch wearer, or sketch a drawing on the – I must add – half-inch screen. But knowing that the novelty of these equally uninspiring properties of the Apple Watch will wear down after a few uses, I have yet to find a valid reason to purchase it.

That said, it is an Apple product – this in itself pulls those like myself, who harbor breathless adoration of the brand.

Yet, the Apple Watch is merely an acutely smaller, bodily-attached version of the smartphone. Unless somebody truly needs the Mickey Mouse Watch face that taps its foot in synchronization with all other Apple Watches around the world, I remain doubtful as to whether we will be able to see as many versions as the iPhone.


It’s no secret that since Job’s passing just over three years ago, Apple has slowed its rate of innovation. Instead of creating new devices at its usual pace, Apple has been releasing derivative products that are themselves increasingly unchanged. These are not encouraging signs from a company whose success is based on its ability to create innovative products.

Given this situation it was no surprise when Apple’s new and current CEO, Tim Cook, became the scapegoat for the company’s lower performance. Cook has been blamed for everything from lacking vision and exhibiting poor leadership to making faulty business decisions and selling out Apple’s values.

While these criticism may be true to some extent, it’s important to recognize that Jobs’ abilities and importance to the company tend to be overstated and Cook’s understated. Only by looking beyond the two CEO’s can we appreciate the new competitive environment Apple finds itself in as well as its impending institutional shift.

Ghost of CEOs past

One of the many things Jobs established during his time at Apple was a cult of personality around himself. It was Jobs’ ideas which inspired the company, Jobs’ personality which made the company work, and Jobs’ leadership that kept the company successful. Jobs was Apple; Apple was Jobs. A permanent spotlight thus became focused on Apple’s CEO.

When Cook became the new holder of that title in August 2011, the spotlight transferred onto him. Unfortunately the cult of personality didn’t – that remained centered around Jobs. Though Cook claims that Jobs told him “I never want you to ask what I would have done. Just do what’s right”, few have resisted the temptation to compare. Combined with Apple’s downtrend, it was only a matter of time before Cook became the disappointing younger sibling.

Of course, no Apple product has ever been the work of only a single man, even if that man is named Steve Jobs. Indeed, Jobs worked closely with Jonathan Ive, Apple’s Senior Vice President of Design and the man who Jobs called his “spiritual partner”. As the designer of the iPod, iPhone, iPad, and other Apple products, Ive can be described as Apple’s other creative genius. And while some may argue that it was Ives andJobs which made Apple products so unique and successful, it’s very unlikely that Jobs handpicked Cook to be his successor without considering Cook’s abilities as an innovator. At a minimum Ive and Cook are approximate to Ives and Jobs.

Furthermore, the impact that Jobs had has often been exaggerated. Jobs seems to have  actively presented himself as playing a larger-than-life role at Apple. According to Walter Isaacson’s acclaimed biography of Jobs, Jobs regularly took personal credit for other people’s ideas. And because Jobs was the face of Apple, it was Jobs – not an anonymous Apple engineer – that consumers believed attended to the details of each device. The list of people from whom Jobs pocketed ideas include Ive and cofounder Steve Wozniak. As Jobs put it, “Good artists copy, great artists steal.”

With these items in mind, it becomes clear that the disparity between Cook and his predecessor isn’t as wide as critics make it out to be. Indeed, if we believe so much in Jobs, we should also believe in his choice of Cook as his successor. But if the identity of Apple’s CEO isn’t the cause of Apple’s slowdown, what is?

The “Cult of Mac”

To understand why Apple hasn’t been keeping up at its normal pace, one must first understand its customers. In a paper entitled “The Psychology of Intuitive Forecasts of New Product Utility”, authors Robert Meyers of the University of Pennsylvania’s Wharton School of Business and Shenghui Zhao of the University of Miami’s School of Business Administration explain that consumers make decisions about whether to buy a new product based on projections of its benefits. Since the reality of these guesses can only be observed after the product has been purchased, Meyers and Zhao argue that what consumers are really buying is “a speculative option: the ability to begin a stream of consumption that will reveal whether or not something is worth consuming in the future”.

This is the mechanism that formed Apple’s famously loyal customer base. By creating a line of innovative devices Apple has trained its clientele to expect a certain level of satisfaction from Apple products. Appropriately, the “Cult of Mac” believes so strongly that Apple is “worth consuming in the future” that they have gone to extremes to follow its products.

Few companies in the world enjoy such devoted customers, but as Apple is slowly coming to realize, this blessing is also a curse. Apple has reached a point where it appears to have exhausted all current directions of innovation and needs time to think of new ones. The problem is, its fans aren’t used to be patient. It is this pressure to produce something as groundbreaking as its past products which has put Cook – and all of Apple – under scrutiny. Forced to release a new product, Apple can only improve its existing devices in order to buy time. But even iterating old designs diverts resources that would have otherwise gone towards innovation, and so Apple finds itself in a difficult balancing act between the customers it must satisfy and the time it needs to research and create.

Rearranging the totem pole

Meanwhile, the tech industry is changing. Last year marked the first time digital track sales (think iTunes) suffered a decrease as streaming services became more popular. Apple’s response has not been convincing. Earlier this year the company acquired Beats Electronics for, according to many analysts, no apparent reason. Critics debunked the possibility of buying Beats for its streaming service, pointing out that Apple could have achieved the same purpose by expanding iTunes or directly buying already well-established services such as Spotify. And as John Gruber of Business Insider notes, “If Apple wanted to sell expensive high-end headphones, they [didn’t] need to spend $3 billion.”

Apple’s competitors, however, definitely have been noticed. Heading the charge against Apple is Samsung, whose Galaxy S5 became popular enough earlier this year to take an (albeit small) share of the smartphone market from Apple’s iPhone. In September, Apple answered with the iPhone 6 and iPhone 6 Plus, phones that are surprisingly reminiscent of the S5 with their larger-than-traditional 4.7” and 5.5” display, respectively, and similarly-rounded edges. This apparent imitation was on top of already comparable technical specs between the two brands’ devices. Not to be outdone, Samsung released the Galaxy Alpha later that month and the Note 4 the month after, both of which have been widely praised for their increased power and improved design.

Apple’s declining share of the tablet market is even more dramatic. According to the market research company International Data Corporation, the iPad now has only 26.9% of the market as of the second quarter of this year, down from 60% two years ago. Samsung once again made ground against Apple, gaining almost 10 percentage points to clinch 17.2% of the market.

Apple is also shockingly late in entering the immerging smartwatch market. While Apple plans to release the Apple Watch early next year, it has been more than a year since Samsung introduced the Galaxy Gear, and this past spring Motorola Mobility came out with the Moto 360. Furthermore, the current leader of the smartwatch trend, from the up-and-coming company Pebble, supports both iOS and Android, making the already generously praised device even more uncomfortably competitive to both Apple and Android bids alike. And while the Apple Watch is taking its sweet time coming into market, the Pebble Steel, Pebble’s next generation of smartwatches, has already arrived.

“Think Different”

So what does all this mean for Apple? One interpretation of Apple’s recent slacking is that it is maturing as a company and in the process and is in the transitioning from creating to perfecting. “Cook and Apple are facing the harsh reality that no company can expect to continue innovating at a consistently high rate… retain control of large market shares and provide high profit margins in the face of increasing competition,” notes Wharton’s online business journal, Knowledge@Wharton. And it may be that Cook is just the right person to organize this transition with his efficient and methodical style. Apple’s purpose is no longer to get to the top but rather to stay at the top, and to do that it’s going to need to become more competitive.

Another possibility is that Apple could be on the brink of starting a whole new venture. The personal device industry has long become saturated and it’s hard to imagine many more revolutionary advances, even from Apple. If Apple wishes to continue to be “the innovator”, it has to start considering innovating in an entirely new branch of technology. In fact, Apple may already be stepping into the wearable tech with Apple Watch, and it’s easy to picture a cooler Apple counterpart to Google Glass in the near future. Alternatively, it could explore smart home appliances, as did former Apple engineers Tony Fadell and Matt Rogers with Nest.

Apple is at a crossroad, and judging from its recent change in behavior, Apple knows it. The Apple of yesterday can’t hold up for much longer. Now is the time to figure out what it will do next. It’s a daunting task, to be sure. But with the renewed leadership of CEO Tim Cook, nearly limitless resources, and the privilege of reputation and loyal fans, Apple will succeed as it always has.


iPhone 5 or Samsung Galaxy S3 is now the choice that many consumers are facing these days.

On one hand you have the iPhone: a sleek, refined product of American innovation, a phone touted by enthusiastic techies and laymen as simply the most revolutionary phone product to hit the market. On the other you have Galaxy S3, which generated enough excitement in its early stages of development for many to dub it the ‘iPhone killer’. It is an amalgamation of cherry-picked features, slight alterations, and excellent execution.

After a high-profile patent case, Samsung was forced to pay over $1 billion in damages for infringing upon a number of Apple designs and patents. Nonetheless, Samsung’s business model of essentially “playing catch-up” to Apple and improving on Apple’s designs ended up paying off. In Q3 2012, the Samsung Galaxy S3 beat out the iPhone 4S (an older model) to become the world’s best-selling smartphone.

At their core, the business strategies of Apple and Samsung Electronics represent fundamental differences in thinking and attitude. The anti-corporate culture of Apple, as embodied by the image of a barefoot Steve Jobs, versus the massive, South Korean conglomerate (chaebol) Samsung Electronics.

While much could be said about how individuals have shaped their separate corporate philosophies, and in turn their trajectories, perhaps we can take a look at the intellectual and academic environments in which these two corporations formed. Perhaps Samsung’s ability to copy rather than innovate is reflective of South Korea’s education system, which many say is top-notch but doesn’t nurture creative thinkers.

A recent study done by an education research firm, Pearson, places South Korea among the most well-educated countries in the world. Considering how well South Korean students have traditionally fared on standardized reading and math tests, the results of this recent study are certainly no surprise. In contrast, the U.S. is a middle-of-the-road country when it comes to education, despite its status as the leading economic power in the world.

Educational spending could be one cause of this achievement gap. According to the Center on International Education Benchmarking, South Korea spends 7.6% of its GDP on education, the second highest among OECD countries.  Intense schooling starts from the age of 6, culminating in the College Scholastic Aptitude Test, a high-stakes college admissions test that often determines one’s future financial, social, and personal success. The average Korean student attends regular schooling in addition to “cram schools,” private after-school academies that specialize in skills ranging from English and math to playing an instrument. Nearly 9% of children are forced to attend such places past 11pm.

For all the success that the South Korean system has produced, it has many flaws. Consequences of such a high pressure educational system manifest themselves in all sorts of manners including the abnormally high prevalence of youth suicides and poor social skills.

Furthermore, in such a system it is difficult to cultivate innovative and creative thinkers. Instead of valuing individualism and unconventional thinking, children are taught at a very young age that memorization and brute repetition will lead to good grades, admissions into prestigious universities, and a successful life.

Former South Korean minister of education, Byong-man Ahn, notes, “Students have no time to ponder the fundamental question of ‘What do I need to learn, and why?’ They simply need to prepare for the test by learning the most-effective methods for digesting tremendous quantities of material and committing more to memory than others do.”

The South Korean government is currently in the process of implementing reforms that it hopes will help foster creativity. Such reforms include reducing material students need to study and refining the ways teachers engage their classes. Interestingly enough, the government itself may be the cause of the educational system’s problems. The Ministry of Education develops a national curriculum that is then disseminated to nearly all of South Korea’s primary schools. The fact that educational reform is implemented from the top-down may discourage experimentation with more effective forms of learning, such as a switch to more hands-on activities and a greater degree of freedom for students to pursue their own academic interests.

Furthermore, while there is reason to be optimistic, such reforms may not be enough. In order to truly foster a nation of innovators and outside-the-box thinkers, South Korea may need an entire cultural shift. The social stigma against those unable to gain entrance into a prestigious university may be forcing creative thinkers to focus all their time on brute memorization, which in turn could push them into despair.

It may be years before South Korea can champion its own Silicon Valley. It would take nothing short of a complete revamp of education and a cultural shift that promotes individuality and iconoclastic thinking to produce an environment conducive to producing the Steve Jobs of tomorrow. But for now we all may have to make do with products like the Samsung Galaxy S3; effective but not groundbreaking.

Imagine developing and patenting the technology that allows a user to return a “sleeping” iPhone back to functionality. Apple did just this with its “slide-to-unlock” feature, a defining characteristic of the iPhone that users have come to love. Specifically, Apple was granted a patent by the U.S. Patent and Trademark Office for the diagrams that it had submitted, showing a white rectangle with curved edges that, when dragged to the right by the touch of a finger, unlocks the device and directs the user to the home screen. Over the years, more and more smart phones have appeared with very similar features. After all, all devices need some way to unlock, and there are only so many ways to achieve this. The unlock feature, however, is an example of what has caused a great deal of controversy and led to the emergence of a recent phenomenon regarded by many as the “Patent Wars.”

Certain Samsung phones allow a user to touch the center of a circle on the screen, and then unlock the device by dragging a finger to any point outside of the circle according to the user’s particular access code. In February, Apple filed suit against Samsung with claims that Samsung violated a series of its patents, including the slide-to-unlock feature. Apple and Samsung are currently engaged in a 20-lawsuit, 10-nation battle over this disagreement. Additionally, Apple has asserted claims against Motorola for alleged patent violations of similar nature. However, something unexpected happened earlier this year – a Swedish company called Neonode Inc. declared that it had already been granted a patent for a version of the slide-to-unlock feature. Apple had unknowingly been beaten to its own idea, and arguably should neverhave been granted its patent to begin with. Stories such as this have become a familiar trend as innovators continue to develop new technology each and every day. Can a fine line between patents, particularly in the smartphone industry, ever be effectively established?

The answer to this question is extremely unclear, and whatever solution that may exist will likely be difficult to find. Thousands and thousands of characteristics of smartphones such as the unlock feature of the iPhone exist as patents. In fact, Google’s chief legal officer, David Drummond, has expressed that up to 250,000 different patents may apply to a single modern smart phone. After all, companies have claimed the rights to the most minuscule of features, and often the distinction between these features is highly ambiguous.

Professor Scott Stern, who teaches at the Sloan School of Management at the Massachusetts Institute of Technology, is a patent expert who is well aware of the uncertainty involving patents of today’s technology industry.

“The trouble is that in this industry so often a patent is not a clearly defined property right, but a lottery ticket of uncertain value,” said Stern, who is convinced that this patent ambiguity unintentionally creates risk and cost. If patents no longer provide a guaranteed incentive to innovators, the enormous benefits of technology patents appear to be diminishing.

However, news of massive patent buyouts executed by some of the world’s largest technology companies has covered recent headlines. In 2011, Apple, Microsoft, and four other companies completed a $4.5 billion joint buyout of Nortel Networks, a bankrupt Canadian telecommunications maker. Google purchased Motorola Mobility for $12.5 billion last August, and Microsoft bought $1 billion worth of AOL patents in April of this year. The aforementioned buyouts value individual patents of each deal at $750,000, $400,000, and $1.3 million, respectively. These numbers are staggering. What use value do large numbers of patents bring to the arsenals of the world’s top technology companies, especially if patents are becoming increasingly difficult to distinguish from one another? What is causing this recent trend of massive patent acquisitions?

Historically, the main idea behind patents is to provide ongoing incentives for individual innovation. However, the original inventors of these ideas are largely forgotten in today’s world. Recently, the main premise behind the massive acquisitions of patents, particularly in the rapidly expanding field of smart phones and tabloids, has become increasingly geared towards security. Ownership of patents grants companies both a stronger legal and negotiating position when faced with the growing ambiguity of the world of technology patents. Loaded with large stockpiles of patents as a defense mechanism, companies have the increased capability to secure their products and defend against potential litigation. The potential for future innovation is also strengthened. The extremely high cost of eliminating these risks is thought to greatly outweigh potential future risks themselves.

It is difficult to say what the future may hold for technology patents. Interesting responses are already beginning to emerge. Just this April, Twitter announced that it will allow its engineering inventors to veto lawsuits against alleged infringers of patents that they develop. Under the agreement, Twitter cannot sue another company or person without the consent of the engineer to whom the patent was rewarded. This action may provide an effective model for companies to avoid expensive legal messes, such as those currently fought by companies such as Apple.

One thing is certain – too many technology patents remain vague and excessively broad. Michael Carrier, a professor at Rutgers School of Law, is correct when he states, “When you have companies spending hundreds of millions in litigation, something is seriously wrong with our patent system.” Patenting of technology products will continue to face struggles unless lawmakers scrutinize the recent troubling trends and develop an appropriate response.

It was a casual Wednesday night when I had first heard the news via Facebook: “A visionary died today. Steve Jobs, you will always be in my heart forever. Thank you for creating the iPhone; I love it!” Just like millions of people around the world, I was utterly shocked. The feeling of being part of the generation that witnessed the passing of such a monumental figure was overwhelming. Needless to say, I too posted a status lamenting the death of Steve Jobs. Soon afterwards, my entire Newsfeed page was inundated with similar status posts.

October 5th marked a historic day for many around the globe with the death of Steve Jobs. From the computer techies in the heart of the Silicon Valley to the trendy young folks in Shanghai, this news came with a heavy dose of sadness and astonishment.

Having served as the pioneer in leading the technological innovation for much of Apple’s history, Jobs garnered an international influence matched only by a few in the world. The Facebook status frenzy was yet only one out of the many testaments to his legacy. Although many would view his death as an inevitable end to a long phase in history, at the same time it marked the commencement of a new journey to the next generation.

Nevertheless, the question still remains – now what? We all knew that Jobs was nearing his time, but now Apple’s future hangs in the balance. The company seems to be taking a rather conservative approach in adhering to the core foundations that Jobs had envisioned. Timothy Cook, Jobs’ protégé and the current CEO of Apple, sent out a letter en masse to the Apple employees in late August, wherein he assured them that, “Apple is not going to change… Steve built a company and culture that is unlike any other in the world, and we are going to stay true to that.”

At the same time, there are others who feel that what Apple needs most in this post-Jobs era is an original Tim Cook method of corporate management. “Apple can’t fall into that,” said David Yoffie, a professor at the Harvard Business School. “It’s not, ‘What would Steve have done?’ That’s a recipe for problems.”

Regardless of the extent to how much Apple “changes,” one thing seems for certain. Jobs’ sheer physical absence may dampen the enthusiasm associated with purchasing the newest line of Apple’s products. I have even met people whose primary interest in purchasing Apple goods stemmed from having the assurance that the product was a physical realization of Steve Jobs’ imagination.

Apple is not merely a company established by Jobs; it also is the manifestation of his imagination for the future, a corporate embodiment of his creative genius. California’s government provided a clear manifestation of the people’s idolization of Jobs when Governor Jerry Brown officially declared October 16th “Steve Jobs Day.”

Jobs also had a tremendous impact on Apple’s stock prices. On January 17th, the last leave of absence that Apple’s board of directors granted for Jobs, Apple’s stock dipped 6.2%.# Furthermore, when Jobs announced his resignation, the stock prices faced another downward dip of 5.2% – from the time of his announcement to the closing of the stock markets for the day in New York City.

Now all of this information seems to boil down to one conclusion: Steve Jobs is literally the ‘Big Apple’ of Apple.

Without him, Apple will never be the same. Jobs’ death seems to closely parallel the death of another American iconic leader: Walt Disney. Unfortunately for the company, however, years of stagnation followed after Disney’s death due to ineffective management that was, in part, generated from the dependence on the firm leadership that Disney had provided. Hopefully, Cook will be able to learn from the lessons of Disney and develop his own legacy as Apple’s new CEO.

On a new note the iPhone 4S, the last Apple product to be built around Jobs’ vision, met with record-breaking sales, marking more than one million sales in the first 24 hours of pre-orders.

Jobs has left a legacy of success that persists to this day. I hope that this success will continue and, for all those in the world who have enjoyed his innovation, may Steve Jobs rest in peace.