The Smartphone Giantonomics
Apple and Samsung are two biggest giants in smartphone market. Their competition has been going on from a decade.
Apple, a company which has been market leader in their market which is monopolistic competition (A market structure where huge firms produce similar good which are differentiated. The entry barriers are low and the market is competitive.). They have been marketing all about their innovation. Why someone buys an Apple? Some consumers and economist say because of their innovativeness and newest technology but they forgot one point it’s a status symbol, they have put the bar high. In monopolistic competition branding is done. It is about firms showing the customers that how their product is better than
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This happens when two companies are in competitive market like monopolistic completion and so if there is a rise in the price of one good that would cause an increase in demand for a substitute. Samsung plays an important role of substitute to Apple. Where Apple is the most desirable brand but Samsung is the most preferable one. After the 2013 summary of smartphone market by Forbes. Samsung was leading by 32 percent followed by Nokia at 22 percent and Apple at 21 percent in markets of Brazil, Saudi Arabia, Nigeria and India. What is common between all these countries? They all are highly populated. It is smart economic trick of Samsung as it target countries which highly populated for more …show more content…
This time Apple got 32 percent of the market share followed by Samsung 29 percent and Nokia at 13 percent. One factor always help Apple to maximize their profit, Cost minimization. It is about minimizing explicit costs (cost for raw material and wages). Apple does cost minimization by shifting its production to country where labour is cheap and cost of production is very less, China. They have partnership with Foxconn and Jabil. Foxconn manufactures IPads and IPhones for Apple and Jabil makes cases IPhone 5C. The partnership between is backward vertical integration. It is type of integration where there is a merger between a firm at an earlier stage of production and a firm at a later stage
Apple Inc manufactures both hardware and software uniquely with methods of their own. Apple’s computer operating system is highly secured and is not subject to viruses and hackers and the products are designed to be concerned about the consumers’ style life. Apple is successful with their marketing is this is because of Apple build strong name and image in the market. Apple’s products are different as mentioned and it has a lot of unique features. This is another method of Apple doing marketing.
Apple uses a very own made image that can be apart from the other companies that share the same market. That images helps the target people to differentiate the products, for example, there are many kinds of media player, but the apples’ media player are known as one of the best, with a sound resolution that exceed the competition, making that product wanted by a large slice of the market. That same differentiation can also be seen in every Apple’s products. Apple is one of the best examples when talking about differentiation of products.
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).
Apple was established as an IT company dealing in exclusively in computers. However, competition in the technology sector forced the firm to focus on other consumer products. The diversification strategy has seen Apple’s sales grow tremendously in the last decade, earning the firm the No. 1 brand position at Forbes. The Apple brand is recognized on an international scale and enjoys a strong recognition thanks to its aggressiveness when it comes to creativity and innovation (Tar, 2013). It has a large number of loyal customers who would purchase the new products regardless of the market price, which guarantees profits from the new division.
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
Apple came back from near extinction to become one of the most revered technology companies in recent memory. They achieved this status by developing innovative design products and pushing the limits of their marketing prowess. Apple is known for their ability to listen to consumers and revolutionize market segments by providing modern design laden and feature rich alternatives to the target markets. They employ strategies that might contradict normal convention by keeping their prices high to build a brand image of prestige and promote their products through word of mouth. The impact on marketing is hugely noticeable by other companies following suit with store models
“Apple uses promotional and advertising tools to capture the attention, interest, and desire of the consumer. Apple captures our attention and interest through innovating and sleek imagery of their products on Apple's official website as well as keynotes and other publication” (Villefranche, 2011). For example Apple just released the I phone 5 which was highly anticipated and the publicity that Apple had prior to the release was tremendous and also brought in many new customers. It has been said that the first weekend the I phone 5 was available they sold 5 million phones. Apple made a plan and set up objectives and goals that they desired. Through integrated marketing they have met those goals and it allows for them to set higher goals and reach them as well. Apple also knows their competitors very well and this allows them to be in this market and compete very well.
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
Two of the biggest phones are iPhones and Galaxy. iPhones were created by Apple, and Galaxies were created by Android; Apple and Android have been big phone company rivals for the past 10 years. Android has their fair share of fans, but Apple has way more and I am one of them. Many people love Galaxies, but iPhones are better because they are better looking, they take better pictures on snapchat, and because they have a physical store.
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 Samsung Galaxy S has a better operating system than the Apple iPhone, which is why Apple is suing Samsung over infringement rights; greed took over. The smartphone craze was started in 2007, when the Apple Corporation strove to be the next innovative mind in the electronics world. These innovations were followed by greed and a desire to own the market. Samsung and Google wanted a piece of the smartphone market; they released the Android smartphone in 2011. This release is what spawned the lawsuit that still drives on today. Apple vs. Samsung: the war to own the smartphone market.
After a little over a decade since its establishment, Samsung, who was once a small business focusing on exporting perishables is now one of the biggest manufacturing company in the world that revenue of over $167 Billion. From an economic perspective, as technology changes – becoming more efficient, it gives other companies the ability to compete in manufacturing the products. As the electronics industry continues to grow, more companies are competing with Apple. As of today, Samsung is one of the largest competitors to Apple. Both companies are trying to win the technology market, especially smartphones since they launched their own line of smartphones – Samsung Galaxy in June 2009 and the iPhone in June 2007.
Apple- Apple is a company that rarely follows the innovations of its competitors. This idea is the core of why the brand is successful and different from other companies. Their products like Macintosh, iPad etc. stand out from others in appearance, functionality etc.
* Apple is the third-biggest mobile handset in the globe due to the status of the iPhone.
2. Powerful brand image associated with quality and superior hardware design: Apple continues to innovate in the area of hardware design. Some innovations are:their own A-series chips for iDevices: Where others use general purpose ARM based integrated circuit chips to drive their devices, each A-series chip is designed specifically for the devices it is to power, designed explicitly to meet Apple’s specific requirements; the unibody design for the laptops: provides a lighter, stronger case for the MacBooks; the multi-touch track pad on the laptops: was new & innovative; the magnetic charger connection on the MacBooks; all the iDevices: the build quality is surpassed by no other; The newest iPhone 5 is regarded as a gold standard in terms of its durability as well as the iOS. In each of these examples, hardware design – aesthetics aside – is always of high quality, and uses the latest technology that is ready.