What Samsung’s Note 7 fiasco means for Apple

When competition is fierce, it drives market leaders to punch harder, not throw in the towel.

I felt a certain degree of Schadenfreude when Samsung announced the recall of their latest smartphone, the Note 7. They copied and mocked Apple for all those years and it felt like karma finally caught up with them. But regardless whether Samsung deserved it or not, it’s not necessarily great news for Apple either.

It all starts with the original iPhone. By virtue of its competencies in hardware and software Apple became uniquely positioned to outclass any of the incumbent players in the smartphone market (and well beyond). By 2010 the company from Cupertino was undisputedly in a league of its own.

It showed. Although Samsung’s smartphones eventually leapfrogged the iPhone in terms of market share there was never much doubt as to which company offered a superior product.

When the Galaxy Note 7 came out, however, it felt like the iPhone finally met its peer. The Note 7 seemed not only built and designed well, it also showcased a host of new, original technologies.

Predictably, opinions sprang up proclaiming the end of Apple’s reign. That the Note 7 was a sure sign Apple could no longer out-innovate its foes. Worse, that Apple, now the largest corporation in the world, was drinking its own KoolAid.

There was some merit to this argument. That in the absence of viable competitors market leaders stop innovating. It also meant, though, that for the first time in almost a decade a strong player challenged Apple. And when competition is fierce, it drives market leaders to punch harder, not throw in the towel. Yes, a strong Samsung may be representing a threat. But it would also push Apple to innovate more.

It reminded me of the Macworld keynote in 1997. During his presentation Steve Jobs famously remarked:

We have to let go of this notion that for Apple to win Microsoft has to lose. We have to embrace a notion that for Apple to win, Apple has to do a really good job.

A successful Note 7 in other words was good news to Apple. It presented a viable opponent to compete against, mobilising Jobs’ company to do a really good job once again. Not rest on its laurels.

As we now know that didn’t happen. Samsung overplayed its hand, leading to one of the largest fiascos consumer electronics have ever seen. Although it created an opportunity for Apple to regain its lead, it also, at least temporarily, removed the pressure.

It might take some time but Samsung most likely will recover from this mess. Perhaps it will even compel the company’s leaders to embrace a more principled approach to building products. And maybe because of all this Samsung’s subsequent smartphones will become better than they would have otherwise been. That’s a good thing. A weak Samsung won’t necessarily help Apple. It might even hurt.