Samsung Electronics And The Smartphone Industry

- The smartphone industry is very capital intensive due to high research and development (R&D) costs and expensive manufacturing facilities. This raises the barrier of entry and makes it difficult for small companies to enter. Many of the firms that compete in this industry have existing long-term contractual relationships with mobile carriers and benefit from their significant brand equity. These companies also have a great deal of knowledge and experience through economies of learning, which gives them a major cost advantage over smaller entrants. New entrants will have difficulty getting carriers to adopt their phones because many carriers are already in profitable deals with the large mobile phone manufacturers.

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

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 the opinion of Baumol and Blinder (2011, p. 235), "monopolistic competition is a market structure characterized by many small firms selling somewhat different products." The authors in this case further note that the output of each entity is small in comparison to the market's aggregate output of competing but closely related products. With that in mind, the mobile phone market exhibits some key characteristics of monopolistic competition. In this market, customers in need of mobile phones are presented with a wide range of options to choose from. For instance, a customer who enters a mobile phone handset shop has the option of purchasing a Motorola, Nokia, Samsung, Blackberry or even an LG handset. All these products despite being closely related are also largely differentiated. As Tucker (2010, p. 268) notes, "the key feature of

Innovation and R&D spending are signals of rivals’ competitive position. The key competitors in the Smartphone industry as of 2007 were RIM, Palm, Sony Ericsson, Nokia, Motorola, and Apple. Each company holds a patent on its own operating system (OS) or a system based on Microsoft’s Window Mobile OS. Safe and secure voice and data transmission is critical to building a good reputation among consumers. The appearance, design and

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.

Apple and Samsung are two biggest giants in smartphone market. Their competition has been going on from a decade.

Beginning with an understanding of supply chain management, Hill et al. (2015) defines the task as managing the components from suppliers and the flow of inputs used in production to maximize inventory turnover, while minimizing inventory holding. Competing in the smart phone market requires Samsung to use innovation, a source of competitive advantage, possibly leading to high profit gains if production costs can be reduced and quality can be improved (Hill et al., 2015). Should Samsung succeed in producing high quality at a low fabrication cost, they could compete with Apple, for example, and possibly earn higher profits to match their large market share, which currently does not match their profits.

Its expansion in China is allowing Lenovo to push its products into more emerging markets, slowly increasing the global profile for its Smartphones. This is ultimately the strategy Chinese firms should pursue, as it allows them to increase brand awareness of their Smartphones. Western Firms have seen their market share fall, because Chinese firms have been able to launch more products which are similar but have a few exclusive features for the Chinese market. The other big factor is price. Although Chinese mobile operators such as China Unicom subsidise the cost of products such as the Apple IPhone, the cost is still beyond the vast majority of Chinese mobile phone users whose average salary is around £5,000 a year. In 2011 smartphones costing less than $200 made up 40% of Smartphones, whereas for devices costing in excess of $700 accounted for only 11% of the market. This shows that the low-margin cheaper products made by Lenovo and other Chinese manufacturers are clear winners, over the higher quality products made by Apple and Samsung. It is also apparent that there is also a clear preference for the Google produced Android Operating System over rival ones such as IOS by Apple. The Android System between 2011 and 2012 has built a dominant market share making up 86.1% of the total Smartphone operating systems in China.

Samsung products range from mobile devices, TV, audio and video, home appliances, cameras, PC and peripherals and print solutions (Samsung 2014). This essay will predominantly look closely at Samsung’s mobile phones market.

The key product streams for Samsung in regard to the mobile device global marketplace are its range of smartphones and mobile tablet devices it introduced in 2009 (Anon 2013). The established dominant player in this market at the time was Apple with their IPhone (Hughes 2013). In order for Samsung to attain any degree of success in this market it would have to provide

Although it took Samsung some time before getting into the smartphone business, in 2011 the company came in with the introduction of its Android based Galaxy smartphones. The company was still able to catch up more than anyone else to match up with Apple. Instead of recreating Apple’s products the iPhone, Samsung used another dimension to position its product by differentiating with features, larger screens and aggressive marketing campaigns. Samsung was willing to spend more on research and development in order to be able to produce exactly what consumers

Samsung is a multinational company with a range of subsidiaries and affiliated businesses, most of them united under the Samsung brand. Samsung has grown from its inception as a small export business in Taegu, Korea to one of the world’s leading electronic companies, specializing in digital appliances and media, semiconductors, memory and system integration.Samsung is a company in flux (Daniel S. 2010). Once the darling of the Android smartphone market, it has struggled to retain its dominance in recent years due to increased competition in the face of market saturation (Lance, W. 2015). The stakes have never been higher, but the risks have never been greater. Apple and Samsung have long been duking it out for the title of king of the smartphone market.

1. The Smartphone industry is a well established market and the threats of a new entrant is low, as technology needed to rival the devices already available is quite advance if they want to differentiate from them

The phone industry in India of LG and SAMSUNG is one of the key success drivers of any growing economy and henceforth one of the world’s most important revenue generating sector. This industry has a wide range of organizations and companies which are engaged in the design, manufacturing , and selling of the products. It helps the improvement in various infrastructure facilities such as rail, road and power, thus playing a vital role in the rapid growth of the economic and industrial development. The Phone market is growing at a healthy pace because of the comparison with increasing levels of customers in india with respect to different companies in the larger phone markets of the world. Worldwide, the phone market has not only been focussing on manufacturing but also towards ensuring that one 's products are superior in terms of quality.