I have been somewhat amused by the ads Samsung is running stating that Apple has copied its Galaxy Note line of smartphones with the new iPhone 6 Plus. What a waste of marketing dollars. Sure, Apple is not the first to release a phone similar in size to the Galaxy Note but LG, Nokia, HTC, and many others have done the same thing.

This ad reeks of insecurity and for a good reason. Samsung's smartphone business is being assaulted on all continents. Xiaomi has eaten into its market share in China and parts of Asia. And Apple is going to become an even bigger Samsung rival now that it has larger smartphones.

This type of competition is already having a major impact on Samsung's financials. Its earnings numbers from last quarter were off by 25 percent over the same quarter a year ago. And Samsung has already warned the market that its numbers will be off in this quarter, too. Imagine what Samsung's holiday numbers will be compared to Apple having record sales and profits for its new iPhones.

Personally, I am a big fan of Samsung products. They are well made and at the hardware level shows innovation. In fact, I carry the Galaxy Note 3 with me as well as wear the Gear 2 smartwatch all of the time. However, I am not necessarily loyal to Samsung. Like a lot of other people who use Android products, moving to another Android product that I or others seem to view as more innovative or better would be an easy one. That is because Android is basically the same on all of these products and nowadays there is less and less innovation at the hardware level to support my loyalty to one Android-branded smartphone over another.

In fact, the PC of the past is a great corollary to the Android vs. iOS debate of today. When IBM introduced its original PC in 1981, it used an OS called DOS. But this OS was not proprietary and in fact, Microsoft was able to license it to any PC company that would pay the license fee. By 1983, Compaq became the first clone and was quickly followed by Toshiba, HP, AST, Acer, and then Dell. While some enterprises had loyalty to IBM, pretty soon the IBM PC clone market exploded and IBM's role as the leader in DOS-based machines was diluted dramatically.

I have been following Apple for three decades now and early on I found something with Apple users I never saw in PC users. It started with the Apple II but really went to a new level with the introduction of the Mac. What I saw was an audience of Apple enthusiasts who eventually blossomed into Apple loyalists. At the launch of the Mac in 1984 I was shocked at the almost sports-like "rah rah" atmosphere that took place at the Flint Center. I attended Apple's shareholder meetings for the following three years, also at the Flint Center, and even though there were no major new products announced, the audience was just as enthusiastic about what Apple had to share.

This type of fan base was really drummed into me when Apple opened a manufacturing/warehouse in Fremont, CA in the late 80s. Apple announced what I thought would be a simple ceremony at the site opening but when I got there, it had sets of bleachers in front of and around the podium and hundreds of Apple fans showed up to cheer them on.

As Apple increased the quality of its products and established a rich ecosystem, this level of loyalty has only become more pronounced. Tens of millions of people buy into the Apple ecosystem and never leave. They get excited every time Apple introduces a new product. They line up for days to be the first to get their hands on new iPads and new iPhones even though there are alternatives to what Apple has launched.

And now that there are larger iPhones, Apple will attract what we call switchers, people who were using smartphones on other platforms who may move over to Apple. We had a source close to Samsung tell us that Samsung did a survey on why people bought the larger screen Galaxy Note and found out that at the time bigger was considered better. Indeed, the 5.7-inch Galaxy Note was considered a premium phone and this was a big driver. Now that Apple has phones in the same sizes, any advantage Samsung had here is diminished.

But it is the loyalty aspect of Apple users that Samsung does not understand. It keeps trying to inspire the same sort of dedication, but has had little success outside of Korea. Even in Korea we are hearing there is huge demand for the new iPhones, which has to be a slap in the face to Samsung. Surveys show many Samsung users also have a real interest in LG's new Android phone as well as ones from HTC. There is loyalty to Android but not necessarily to Samsung in general. It is the PC clones all over again. Hardware is getting harder to differentiate while the real value is in the software and services that run on the platforms and Apple excels at this.

There is another issue that is going to be a big problem for Samsung and other Apple competitors, too. Apple's new payment system could be a huge differentiator. Yes, Android has supported NFC for years but Google Wallet has not been very successful. One of the execs of a banking company told me that the key reason Google Wallet has not been successful is that Google wants the user data and what the users bought in order to target them for ads in the future. Now contrast that to Apple's approach to payments. Apple will not know what is bought, and no actual payment data will ever go to the merchant. That is because the payment transaction uses a one-time numerical code tied to a person's credit card and the merchant only gets this one-time code to enable the transaction.

Apple's business model allows for this faceless transaction but Google's business model does not. Without transaction data that can be used for targeted ads, Google has no way of making money outside of a small transaction fee if the banks even sign on.

Apple could use its payments program, which is tied to iOS 8, to endear people even more to the Apple brand and drive even greater loyalty. Apple's new program instills trust, which is critical if its payment program is to work. Unless Samsung and the Android crowd can get around Google's insatiable appetite to know who you are and what you bought so that they can target you for ads, Apple's payment approach could do even greater damage to Samsung's smartphone program.

I continue to be amazed at the resilience of Apple's fan base and the loyalty they have towards Apple. I do see some of that with the Android crowd but that loyalty is to Android, not necessarily to a single brand. I see this as a big challenge for any of the Android vendors since loyalty to them is just not there. On the other hand, Apple's loyal fan base just continues to drive them towards record profits.

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