Iphone in South Korea

The product that I choose for my commodity chain project was the Apple IPhone that has been one of the most popular cell phone devices since its initial release in June of 2007. The idea around me picking the iPhone revolved around the fact that I have owned every generation Apple IPhone since the first generation IPhone release and am very familiar with its technology and background. In the initial part of this paper, I will discuss the rudimentary junctures in the iPhones commodity chain such as manufacturing and retail sale. In the latter half of my paper, I will then specifically investigate into the people who physically produce the iPhone and their living conditions, ways of life, and overall character. It is important to understand that even though Apple is a very profitable company that sells successful, unique products, they still use a contract manufacture known as Foxconn that is known for their harsh work environments and poor labor treatment.

* Ability to negotiate with operators in the US may affect its development in the US. This may limit its growth in the future given that the US is the No.1 smartphone market all over the world.

There are many competing brands of smart phones and Samsung has reported a decline of profits in 2014. Information from GSM arena shows than Samsung released 54 new phone models in 2014 , compared with 24 by HTC , 11 Motorola and 2 by Apple, leading to increased production costs and lack focus on a specific customer segments thereby losing some of its competitive advantage (GSM Arena , 2015).The lack of popularity of its own OS (Tizen ) and dependence on Google’s Android platform makes it vulnerable on google to develop an “ecosystem”. There are component integration issues as well as loss revenue from potential App sales (Strategic Mangement insight , 2015). Negative publicity from litigation due to patents are likely to continue as technology patents are vague and Samsung with is large portfolio is likely to infringe on some of the patents (Tibken, 2014).

In this report, I prove that Apple’s iPhone has dominated all other smartphones in the years leading up to 2016. It is the epitome of what a globally recognized product can accomplish when considering how quickly it globalized and the image it provides for those who buy an iPhone. Owning one of these phones is not only a statement, it holds power and value that other smartphones simply cannot top. The company owns the stage when compared to other smartphones, and it’s journey to become the world’s second-largest mobile phone manufacturer is truly incredible. In fact, not only does it lead in technology and phone production, it’s become the largest publicly traded TNC in the world. Everything from its assets to its brand loyalty prove why it has expanded across the globe, and will continue to for many years to come. Apple Inc. has globally expanded by outsourcing nearly every level of its production and became one of the most successful and revolutionary TNC’s in the world, mainly due to the release of the infamous iPhone in 2007.

Apple and Samsung are the two greatest organizations with an industry of the greater part the worldwide cell phone advertise. Consistently, both Apple and Samsung are getting new developments their mobiles, which extraordinarily expands their cell phone deals. Since there is though competition in the present world, Apple created a trend by introducing IPhone to the world, which is one of the best feature smartphone with high security. According to Business Insider, “Though apple is getting more profits and experiencing the first place in the market, then came the competitor Samsung, Samsung introduced the Galaxy S smartphone which made the apple market

The first cell phone call was made on April 19, 1973 by Motorola employee Martin Cooper, since then cell phone have been getting more innovative and enhanced as times passes . When the cell phone was first manufactured I don’t think Martin Cooper, had in mind what wild, astounding, idea he had brought to the light, and how much the cell phone would evolve over the years. The two powerhouse companies responsible for most of the cell phones that are circulating around the world are Samsung & Apple, these two companies history with each other don’t date back that far, but they have sued, and tried to outsmart each other numerous amount of time. Over the years of the Samsung vs Apple have sued each other for an amount of money over a billion dollars, and lawsuits stretching across four different continents just to keep company safe, and free of copycats. The two backgrounds of the company are very different and started during different periods of time, Samsung which was originally called Sang hoe was founded in 1938 by a big landowning family by the name of Lee Byung-chull, and the apple started in 1971. Samsung they started as a small trading company with forty some employees it was originally located in Su-Dong, they mainly dealt with groceries being produced in and around the city, they even produced their own noodles. This company seemed to have a good beginning, selling groceries and having their own home made noodles. It was when in the 1960’s Samsung shifted their

In 2014 both Apple and Samsung sold a combined total of about 108.2 million units of their products! Samsung sold about 71 million units while on the other hand Apple sold 94.75 million units. For the past few years, the competing and comparison between Apple and Samsung was at its maximum. Fights started between people to prove an idea about which company is the best but they did not know that they were only comparing their smartphone. That is not the only thing a person should concentrate at while comparing two of the biggest multinationals in the world. People should look at the sales of all of the company’s products, their profits and losses, the history of the company, and the reviews of the people about their

Smartphone market is fast-moving and very high competitive due to intense competition between two big smartphone producers, Apple and Samsung. At the beginning, Apple dominated this market solely by introducing a new innovative type of smartphone by Steve Jobs that has revolutionized people lifestyle and mobile industry. A few years after launching iPhone, a new fast following competitor, Samsung came into this market, and their sales have outperformed Apple from the year 2011 (According to Chart A1 in Appendix). In term of developing their product, Samsung has created its products by following Apple’s technology since the beginning of producing its smartphone, therefore there are many patent lawsuits between them. Since Steve Job passed away, Apple has continued to develop its core competence, which is an innovation of new type of smartphone that could help them to take back their market share from its rival, Samsung. Nonetheless, the competition between Apple and Samsung will still continue intensively in the future.

The threat of substitutes is the availability of a product that the consumer can purchase instead of the industry’s product (Free management books, n,d ). A substitute product is a product that produced by other industry and offer similar benefits to the customer as the product produced by the firms within the industry. The threat of substitutes can affect the competitive environment for the firm in that industry and also influence the profitability of the industry. This threat affects profitability of the industry because the consumers can choose to purchase similar product from other industry to instead of the company’s product. Besides that, the more the close substitute product can make the industry more competitive and decrease the profit potential of the firm in the industry whereas the less the close substitute product can make the industry less competitive and

One more issue that Apple must confront is the apparent “de facto” protectionism of Nokia and Ericsson. These two companies are extremely important to their economy, as Nokia has been mentioned as one of Europe’s most important companies. The future is pretty safe for those two telecommunications giants, and Apple will be at a disadvantage if it must wrestle with them. There is an argument that with cellular standard conforming to European standards, US companies such as Motorola and Apple may be at a disadvantage in keeping up with Europe’s cellular manufacturers. One can argue that this can be supported by the 2.5G release of the iPhone Europe as opposed to the 3G standard. Apple can argue the European standards are exclusionary and discriminatory as Apple has invested large amounts of money into R&D standards. At present, mobile devices based on current US technology are now locked out of the EU market since the W-CDMA standard has been converted into a requirement. (Wallis-Brown, Von Hellens, et al, 2000) The development of the iPhone under two different standards is a burden for Apple. The EU arguably also protects its two telecommunication giants, Nokia and Ericsson. Apple is not alone in this fight, as Korean manufacturers such as LG and Samsung face these burdens. Apple also shares this dilemma with Motorola on US soil. However, these competitors are established companies that have introduced product since

The threat of substitutes: where it refers to substitute product as those that are available in other industry which can also fulfil the need and want of the consumers. It can affect competition in an industry by placing an invisible ceiling on prices which companies within the industry can charge, due to the fact that if the cost of substitute is low then the consumers will tend to purchase substitutes, therefore limiting the prices that a company can place on certain items to gain maximum profit. For example, lemonade can be substituted for a soft drink. Generally, competitive pressures arising from substitute products increase as the relative price of substitute products declines and as consumer 's switching costs decrease.

Nonetheless, competition in this medium-/low-end market is actually quite high. Many local or even some international brands are now selling their smart phones for thousands of RMBs. Obviously Xiaomi has won a good debut through this pricing strategy.

Intermediaries such as Carphone warehouse or network stores such as Orange also have other handsets readily available, which makes it difficult for Nokia to have a direct impact on the selling of their handsets2. Hence, bargaining power of buyers is high.

According to the Porter's 5 forces analysis, the China's mobile phone industry is full of competition. The five aspects are analyzed as follows. Rivalry Strong. There are a large number of players within the China's mobile phone industry which intensify the competition. Though the quick market growth may mitigate competition to some degree, the high storage costs and low switching costs increase the rivalry. Threat of substitutes Weak. Until now, the smartphones have not got any powerful substitutes. Neither tablets nor PCs could replace smartphones since they have many unique advantages such as small and

It is apparent of the growing number of users of mobile phones around the world. This is the case with the online population too. This offer Apple a good avenue for their products to grow and develop in the Chinese market.