Samsung’s Trojan Mule Strategy…And 7 Ways To Fix It

Samsung just launched its Note 9 smartphone. Like its predecessors and siblings, it’s a mule.

Over the years, I’ve consulted to Samsung, analyzed its mobile strategy, and owned/rooted its Galaxy S2, S5 and S9+ phones. In 2011, I noticed a light sprinkling of Samsung apps on my Galaxy S2. By the time I reviewed the S5, it was a full marinade. Except, I was inside the pot!! It turns out, I was drafted into the slowest Trojan Horse attack in history, aka the Trojan Mule Strategy.

This is the story of what Samsung is doing (mostly wrong), companies that have done it better, and seven ways Samsung could salvage its gimpy mule.

“I’ll Just Watch”

For nearly a decade, Samsung used the official version of Android (with licensed Google apps) as a launchpad for its own, similar apps. In the process, annoying and confusing consumers with duplicate functions and settings. Good design is supposed to remove friction, not stuff it in, like a piñata full of nail files. (To be fair, some customers love nail file piñatas.)

But why would Samsung use customers as pawns – on devices they paid for – in some lethargic turf war between frenemies?

It’s clear Samsung (slowly and fearfully) aspires to control its own ecosystem – and destiny. Likely starting with a Google-free version of Android, as Amazon did with Kindle. Then, siphoning users from Google’s apps to its house brand. (Samsung also has Tizen OS for TV’s and other smart devices.)

Samsung knows the future is services. That’s where all profits and customer loyalty live. Software is the way there.

But every Samsung app is a needy Ex, begging me to dump my girlfriend:

Please sign up for my health app! I just want to hear your heart beat!

I’ll wear this nightie if you show me all your photos!

Pleeeeeeezzzzzeee connect me to your Gmail!!!!!

Samsung lures us with sexy hardware, dresses up its apps all pretty, then watches everyone shack up with Google. Instead of throwing an awesome orgy, Samsung wound up in a cruel cuckold.

That’s not how ‘the mule’ is supposed to work!

A Brief & Unsatisfying History of The Trojan Mule Strategy

Samsung is hardly the first to use the Trojan Mule. There’s lots to learn from others who’ve done it better.

The Trojan Mule strategy has five steps:

1. Stock your shelves with major brands to attract customers (in this case, Google apps)
2. Create proprietary versions of what’s most popular and profitable
3. Place your clones next to their brand name counterparts. Underprice and promote them to encourage sampling, familiarity and habituation. (You’ll have more margin to play with compared to paying brand premiums.)
4. Inch your clones upmarket (improve labels, formulations, quality, and raise prices to just below the name brands)
5. Max out substitution of branded sales with proprietary ones and optimize procurement

This strategy takes time, often years, but maximizes profitability, improves bargaining power with suppliers, reduces reliance on third parties, and wins you control over your own destiny.

6 Examples of the Trojan Mule Strategy

1. Amazon launched its own Essentials clothing line and AmazonBasics electronics accessories. Of course, the company has access to huge reams of data from brands and marketplace sellers, who rely on Amazon distribution but may eventually compete with it, if their products become too popular.
2. Netflix rented millions of studio films and TV shows for over a decade. It knows so much about our preferences that its original productions target categories, creators, and audiences it knows will sell – and have great margins, like stand-up comedy specials. Now it’s slowly substituting content licensed from third parties with its own, eliminating royalties, driving profitability and becoming entirely self-reliant. Take THAT, Disney!
3. Supermarkets and drug store chains have used this strategy for so long that we don’t even question the clone standing next to the Head & Shoulders bottle with a “Compare at $1.50 less” tag. Trader Joe’s entire business model dispensed with the pretense and became THE private label store.
4. Macy’s (and other department stores) did this with Alfani and other house brands. Like Trader Joe’s, H&M, Forever 21 and Sephora didn’t bother with step 1. The store is the brand.
5. Facebook is the granddaddy of all Trojan mules. For a decade, it encouraged major publishers, brands and celebrities to promote their pages, post articles, use Facebook to drive traffic, use Facebook login, display tracker-laced sharing buttons. Basically, build Facebook’s brand with their own. Then, Facebook pulled the rug. Everything went proprietary. Try sharing a YouTube video. No one will see that turkey fly. Today, most pages are pay-to-play, if you want your posts seen. Facebook executives pretty much admit publishers no longer matter. They can kiss the mule they rode in, goodbye.
6. Spotify‘s recent $500M in acquisitions of Gimlet and Anchor.fm are not surprising. In March 2018, I proposed they go hard after podcasting. Spotify needs to shift listening time from music, for which they pay a 70% royalty to record companies, to content they own 100%. Basically they’re using the audience they acquired with expensive licensed content to replace listening time with professionally-produced shows by Gimlet AND user-generated content (a-la-YouTube) with Anchor’s technology. Both geniuses and imbeciles can now create podcasts – and help Spotify feed its Mule.

Ironically, as our lives become more digital, it’s way easier to launch physical products than digital ones. In meatspace, there’s no shortage of outsourced manufacturers or food co-packers. Finding great developers and designers and deploying successful digital products is no easy feat. Most who try, fail.

Should Samsung bravely let go of Google’s security blanket?

Samsung’s lumbering mule means the company knows how lonely and treacherous letting go can be. Billions in sales are at stake.

Like a bad marriage, maybe Samsung is waiting for its partner to issue an ultimatum – or initiate the breakup. Or, maybe organizational inertia is preserving status quo…until it can’t.

Galaxy S9/S9+ sales are stagnant.

Apple is eating up high end customers and 80% of smartphone profits. Not to mention Apple’s surging cloud services revenue.

Google skims all the cream on Android.

The app boom is over. Only a handful of mobile services make bank.

In fact, all smartphone innovation has plateaued, slowing upgrades. That’s why Apple spends more time removing jacks and emasculating its $30 cables than innovating blockbuster features.

For now, Samsung’s hardware and screens are still superior, despite the bloat. (It’s why I still bought the S9+ but used Package Disabler to kill the clones.) But hardware is a race to the bottom. Chinese manufacturers can win that marathon every day. It’s how they conquered upstarts like Fitbit, GoPro and Jawbone. Direct competitors – OnePlus, Huawei, Motorola – and Google’s Pixel – are nearly at parity or inching ahead – without tangling customers in on-device warfare.

Luckily, many Samsung apps are at – or near – parity with Google. Samsung can acquire the rest. (See my quality ranking of various Samsung doppelgangers here.)

Samsung has the resources to finance big moves, including profits from supplying iPhone parts. It’s time to unleash the Mule Army…before its soldiers go senile.

Or, it needs an entirely new plan…

Seven Better Opportunities

I think the Trojan Mule is a terrible strategy for Samsung. It needs to be terminated with extreme prejudice.

Not only is antagonizing Google and your customers a bad idea, but the underlying premise is pitiful and misguided. It’s like the 90’s movie Bound, where a jealous woman slowly takes over her roommate’s identity. A Trojan Mule strategy projects weakness. Your DNA doesn’t change when you put on makeup and a wig. Everyone knows Samsung will never defeat superior pure plays like Google (data & software services) or Apple (a luxury, experiential mating call).

Strength comes from forging your own unique identity. One that’s true to who you are as a company (or individual).

So who are you, Samsung? What do you stand for? 

Without doing our normal Context work to find out, I’ll surmise seven specific opportunity areas, linked to Samsung’s advantages.

Samsung must THINK BIG! Exclusives, acquisitions, strange bedfellows. Most important, these must be seamless experiences. No more competing interfaces. Remove steps, don’t add them.

Rate the Clones!

Finally, here’s my rating of which Samsung duplicate apps are (*) nearly competitive w/Google version or (**) equal or better, sign in to the site (free)

1. **Gallery
2. **Browser
3. **Calendar
4. **Find my #mobile
5. *Launcher
6. *Mail
7. *VR (still very early in this category)
8. Cloud backup (totally superfluous without a strategy)
9. Bixby voice assistant
10. App store
11. Speech-to-text
12. S-Pay
13. Gaming

If you need our help innovating, drop us a line at ideas(at)ideafaktory.com.