Pioneering a new avenue of business is a risky game, no matter what sector you might be in. The rewards, however, can sometimes be so lucrative that the massive risk of exploring new and unexplored territory might just be worth it.
To pursue a new idea is to trust in both the utility of the product and your knowledge of the marketplace with absolute certainty. The product might be the next big thing, but the chances are that its first iteration will be extremely expensive to make and market, while also lacking in any sort of extended ‘real world’ exposure to use and wear and tear. Furthermore, the product might just be riding the hype train of its flashy marketing campaign and consumers might just choose to drop it when they realise how useful (or not) it actually is.
We are currently witnessing Samsung explore a new avenue of the mobile phone market: foldable phones. This is the first iteration of this tech, and while Samsung has promised that the device is ready for public use – even showing videos of specially designed machines folding and unfolding their phones in the factory – reports of faulty devices are already flooding in, just as the product launches. The phone also costs a massive $2000 – nearly twice as much as the most expensive iPhone you can buy – a common symptom of first wave products.
However, this could pan out in Samsung’s favour in the long-run. Since they are the first to put the tech to market, they are in a unique position whereby they can gather huge amounts of customer feedback information to improve product functionality, and streamline manufacturing processes for the next iteration of the product. Chinese tech company Huawei is also just about to launch their own foldable phone – the verdict is out on whether this design trumps Samsung’s.
Alternatively, another company might come in either before, or in line with the next iteration of the product, having taken more time to develop and streamline, and dominate the market with a superior solution.
This has happened, to some degree, with the VR headset market. Occulus, now owned by facebook, pioneered the tech for years, garnering a lot of industry attention and buzz. Several years later, however, HTC – a primarily mobile device focused manufacturer – dropped their own VR headset. As of 2018, the two companies sit at a fairly similar level of market share, with Occulus owning 19.4%, and HTC with 12.9%. The real underdog in this equation, however, is Sony, now sitting on a whopping 43% of the VR market share.
Sony sat back for years and developed their own cheaper, more convenient solution, and finally launched it on their already massively successful Playstation platform.
Pioneers are an essential in any free-market economy. They ensure products evolve and ideas stay fresh – a mutually beneficial relationship for manufacture and customer alike. Being the first to market with a product comes with its drawbacks but unless someone is willing to do it, then we all suffer the consequences of a stagnating marketplace.
Be thankful for Samsung’s dodgy folding phones – one day the grandchildren of their design might be in your pocket.
Having a new smartphone design, after over a decade of the same rounded rectangles over and over again, is obviously exciting. But buying the Galaxy Fold when it becomes available… is a risky prospect.