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Why Samsung is no longer Cinderella at the iPhone ball

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Apple has reported a record sales slump, while Samsung’s latest phones win market approval. How did it come to this? ARTHUR GOLDSTUCK tells the tale.

What’s wrong with this picture? Global smartphone sales down 3%, Samsung sales down 4%, Apple iPhone sales down 16%.

Or this one? Samsung revenue up 6% and profit up 12%, Apple revenue down 13% and profit down 23%.

For one thing, Samsung is tracking global trends in smartphone shipments, which is hardly wonderful news for a brand that wants to run ahead of the market. But, for another thing, Apple has lost the magic sauce.

One could be sympathetic and believe CEO Tim Cook when he blames a tough “macroeconomic environment”. But, during the worst financial slump in living memory, the big bad Global Financial Crisis of 2008-2009, Apple not only held its own; it kept growing, quarter after quarter.

The iPhone had been launched in 2007, and kept getting better, allowing the company to outperform not only the market, but also all forecasts. It kept breaking through every barrier, eventually helping Apple rack up 13 years of continual growth that had begun with the launch of the first iPod.  That is 51 quarters, of which around 8 had seen the destruction of entire national economies across the globe.

Tough macroeconomic environment? Apple used to trample on tough macroeconomic environments. Rather, try tough competitive environment. In the growing Chinese market, iPhone sales slumped 26%. Meanwhile, Chinese brands like Huawei, Oppo, and Xiaomi hungrily took global markets from their respective positions as the world’s 3rd , 4th and 5th biggest smartphone brands.

Which brings us to the Samsung Galaxy S7. It marks four out of the last five Samsung devices flagship phones that have no longer been part of the catch-up game with Apple. Back in 2012, The S3 was the best that Android could offer at the time, but also for the first time showed that someone else also gets what a smartphone should be. Still, it was considered a Cinderella, a poor copy of the finery invented by Apple for the iPhone ball.

Apple stuck doggedly to its finery: a form factor premised on a mantra that the world was satisfied with a 4” display. At 4.8”, the S3 was already pulling away. However, the iPhone 4S, still enjoying the Steve Jobs halo effect, easily kept up.

In 2013, the Samsung Galaxy S4 truly disrupted the ball, offering a phone as close to perfect as the technology of the time allowed. It overreached with some features, like gesture control.  But compared to its peer, the iPhone 5, it was a breath of fresh air, with a 5” display, 50% more power than the iPhone, and a camera that for the first time gave Apple a run for its money.

It gave Samsung undisputed leadership of the smartphone market. Along with the Note series, which introduced the phablet format and proved a voracious market appetite for even bigger displays, the S4 would prove to be a wake-up call at Apple’s Cupertino HQ.

However, Apple pushed the snooze button a couple of times. Instead of coming to the party with a larger iPhone, it delivered the 5S and a youth-oriented 5C, with the same 4” display, but in multiple colours. Crucially, it fell short of market expectations that it would be a phone targeting lower-income users and emerging markets.

Luckily for Apple, the 2014 contestant from Samsung, the S5, was a rare miss-step, offering almost no good reason for anyone to move on from the previous edition. In effect, Samsung did an Apple, offering only incremental improvements.

Both brands then upped their game phenomenally, with Apple’s alarm finally penetrating its snooze late in 2014, and a wide-awake look in the mirror resulting in the iPhone 6 and 6 Plus – respectively 4.7” and 5.5” phones, targeting both the regular Samsung flagships and the Note phablet. Apple reported record sales.

Then, in 2015, came the Samsung Galaxy S6, with its beautiful curved screen Edge as well as a flat-screen option, and an absurdly good camera on both. Apple responded in time-honoured fashion later in the year, with a 6S and 6S Plus, delivering – surprise, surprise – only incremental improvements.

At he beginning of 2016 it followed with the cunning trick of cramming iPhone 6-like power into an iPhone 5-type body with 4” display and calling it the SE. Because, you know, the world is still hungry for 4” displays.

In contrast, the new Samsung S7 Edge pushes the curved device’s display from 5.1” to 5.5”, while the regular S7 keeps to 5.1”. Both have less powerful cameras but more powerful processors and more RAM, along with substantially bigger batteries. The larger phone increases battery life by up to 50% over its predecessor.

Samsung added one other feature that probably made the biggest contribution to its sales holding pattern: it dropped the recommended price by more than 20%.

In a market where the latest features are often not enough to persuade someone to upgrade, and where a good phone remains a good phone for several years, the ever-rising pricetags on flagship phones from the leading brands was bound to result in a backlash. That was probably the main reason the S6 and S6 Edge were sales disappointments, despite arguably being the best smartphones in the world.

Which brings up one of the less publicised numbers from the latest Apple results: gross profit margin, which is the real secret sauce of Apple’s astounding profits and its unprecedented $233-billion cash pile.

Gross profit margin for the last quarter was an eye-wateringly joyful 39.4%. However, that was down 40.8% for the same period the year before and from it being routinely above 40% in years before. Apple has offered guidance for the next quarter that it will fall yet again.

In the “macroeconomic environment” of increasingly thrifty customers, ferocious competitors and Samsung’s cutting edge devices, don’t expect it to begin rising again any time soon.

* Arthur Goldstuck is founder of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on Twitter and Instagram on @art2gee

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Legion gets a pro makeover

Lenovo’s latest Legion gaming laptop, the Y530, pulls out all the stops to deliver a sleek looking computer at a lower price point, writes BRYAN TURNER

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Gaming laptops have become synonymous with thick bodies, loud fans, and rainbow lights. Lenovo’s latest gaming laptop is here to change that.

The unit we reviewed housed an Intel Core i7-8750H, with an Nvidia GeForce GTX 1060 GPU. It featured dual storage, one bay fitted with a Samsung 256GB NVMe SSD and the other with a 1TB HDD.

The latest addition to the Legion lineup has become far more professional-looking, compared to the previous generation Y520. This trend is becoming more prevalent in the gaming laptop market and appeals to those who want to use a single device for work and play. Instead of sporting flashy colours, Lenovo has opted for an all-black computer body and a monochromatic, white light scheme. 

The laptop features an all-metal body with sharp edges and comes in at just under 24mm thick. Lenovo opted to make the Y530’s screen lid a little shorter than the bottom half of the laptop, which allowed for more goodies to be packed in the unit while still keeping it thin. The lid of the laptop features Legion branding that’s subtly engraved in the metal and aligned to the side. It also features a white light in the O of Legion that glows when the computer is in use.

The extra bit of the laptop body facilitates better cooling. Lenovo has upgraded its Legion fan system from the previous generation. For passive cooling, a type of cooling that relies on the body’s build instead of the fans, it handles regular office use without starting up the fans. A gaming laptop with good passive cooling is rare to find and Lenovo has shown that it can be achieved with a good build.

The internal fans start when gaming, as one would expect. They are about as loud as other gaming laptops, but this won’t be a problem for gamers who use headsets.

Click here to read about the screen quality, and how it performs in-game.

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Serious about security? Time to talk ISO 20000

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By EDWARD CARBUTT, executive director at Marval Africa

The looming Protection of Personal Information (PoPI) Act in South Africa and the introduction of the General Data Protection Regulation (GDPR) in the European Union (EU) have brought information security to the fore for many organisations. This in addition to the ISO 27001 standard that needs to be adhered to in order to assist the protection of information has caused organisations to scramble and ensure their information security measures are in line with regulatory requirements.

However, few businesses know or realise that if they are already ISO 20000 certified and follow Information Technology Infrastructure Library’s (ITIL) best practices they are effectively positioning themselves with other regulatory standards such as ISO 27001. In doing so, organisations are able to decrease the effort and time taken to adhere to the policies of this security standard.

ISO 20000, ITSM and ITIL – Where does ISO 27001 fit in?

ISO 20000 is the international standard for IT service management (ITSM) and reflects a business’s ability to adhere to best practice guidelines contained within the ITIL frameworks. 

ISO 20000 is process-based, it tackles many of the same topics as ISO 27001, such as incident management, problem management, change control and risk management. It’s therefore clear that if security forms part of ITSM’s outcomes, it should already be taken care of… So, why aren’t more businesses looking towards ISO 20000 to assist them in becoming ISO 27001 compliant?

The link to information security compliance

Information security management is a process that runs across the ITIL service life cycle interacting with all other processes in the framework. It is one of the key aspects of the ‘warranty of the service’, managed within the Service Level Agreement (SLA). The focus is ensuring that the quality of services produces the desired business value.

So, how are these standards different?

Even though ISO 20000 and ISO 27001 have many similarities and elements in common, there are still many differences. Organisations should take cognisance that ISO 20000 considers risk as one of the building elements of ITSM, but the standard is still service-based. Conversely, ISO 27001 is completely risk management-based and has risk management at its foundation whereas ISO 20000 encompasses much more

Why ISO 20000?

Organisations should ask themselves how they will derive value from ISO 20000. In Short, the ISO 20000 certification gives ITIL ‘teeth’. ITIL is not prescriptive, it is difficult to maintain momentum without adequate governance controls, however – ISO 20000 is.  ITIL does not insist on continual service improvement – ISO 20000 does. In addition, ITIL does not insist on evidence to prove quality and progress – ISO 20000 does.  ITIL is not being demanded by business – governance controls, auditability & agility are. This certification verifies an organisation’s ability to deliver ITSM within ITIL standards.

Ensuring ISO 20000 compliance provides peace of mind and shortens the journey to achieving other certifications, such as ISO 27001 compliance.

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