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The smartphone market
The smartphone market
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Emerging Issues for Samsung
Follower to Leader
The big challenge for Samsung is to go from being a follower to being a leader in terms of gadget innovation. The Galaxy Gear and the Galaxy Round, which are Samsung’s latest two attempts on new form factors, have been met with negative reviews so far and have reportedly only deepened the company’s anxiety about what its “next big thing” will be.
This fear over its future is what’s driving Samsung to invest so much in developing Tizen, its homemade smartphone platform that it hopes will lessen its dependence on Google’s Android operating system. In this way, Samsung is looking to follow the business model that Apple has used and that Microsoft is now trying to emulat: It wants tight integration
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Samsung Electronics, hit by waning demand in its key mobile division, needs to double up efforts in the world's fastest growing markets for smartphones, or it risks shrinking its business further.
Local smartphone makers in emerging markets like China and India are rapidly souping up the quality of their lower-cost models, and could become a real threat to the world's biggest smartphone vendor especially if it doesn't act fast.
Analysts forecast demand for premium smartphones will plateau in the coming months, given high penetration rates in developed nations. Penetration for smartphones in developed markets is estimated at between 75-85 percent, according to Citi, which forecasts saturation could be reached as early as 2014.
Indian and Chinese smartphone manufacturers are classically disruptive as they manage to produce products that are good enough at a fraction of the cost of comparable models from premium brands. Major local manufacturers now account for two-fifths of China's smartphone market, and one-fourth of India's. Xiaomi already sells four of the top 10 best-selling Android devices in China, and operates one of the top five app
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They run their own successful app stores, mobile operating systems, and mobile services. They also hold the keys to which apps are preloaded on their phones. When BlackBerry wanted to take its BBM messaging service for Android into India, it signed a deal with Micromax.
The local manufacturers are not provincial outfits producing knock-offs, as some might be inclined to assume. But their main competitive tool, for now, remains price. Local manufacturers in China and India match the features of more expensive devices and manage to produce comparable hardware at a fraction of the price.
These manufacturers will continue to expand overseas, in search of new growth opportunities. Micromax is in Nepal, Bangladesh, and Sri Lanka. Xiaomi has its eyes on Malaysia and Brazil. Huawei is already in the US. Micromax recently announced that it would start selling its devices in the lucrative Russian market. ___________________________________________________________________________
Exhibit
Popular Indian and Chinese
What 's more, the new competitors always can drive innovation in the mobile phone industry. Because if the new competitors want to success in the industry, it has to have something different with other brands to attract the consumers, and this different thing symbolizes innovation in the mobile phone industry. Xiaomi, as a successful new entrant in mobile phone market in 2011, is a good example. According to IDC, in October 2014, Xiaomi was the third largest smartphone maker in the world, following Samsung and Apple Inc. and followed by Lenovo and LG. The smartphone that Xiaomi release is much cheaper than other smartphones, which contain high configuration as Xiaomi did. What Xiaomi has done, is to substantially eliminate the significant 20 percent to 25 percent cut retailers or distributors typically get, and pair that with the vision of earning profits from accessories and web applications within its eco-system (MIUI) instead. Because of the new consciousness of forging greater margins from the phones itself, they carve out a substantial market in a short time and become an effective competitor for the existing
Samsung will also include consumers, as key external stakeholders, in the research and development focus groups to best incorporate consumer opinion and demand into areas of the project including development, marketing, and distribution. This will help Samsung create and deliver a product that the customers want. It will also help identify consumer needs for the new smartphone’s use as consumer inputs will help shape and drive the technological innovations that Samsung is aiming to deliver with its new smartphone.
T-Mobile started to explore developing countries’ markets to increase market shares and maintain its profits. “As penetration rates in many developed regions such as Europe approach 90 percent or more, mobile operators and handset makers are looking to new markets where people may have never even picked up a regular telephone” said by Marguerite from CNET News. For instance, T-Mobile does make significant decisions in developing markets in emerging markets, including China. The cooperation with China Mobile not only helps T-Mobile to establish a foothold in China, but also brings it an opportunity to build new international business between China and USA.
While profits from semiconductor sales are keeping stakeholders happy, Samsung is pursuing a differentiation strategy in the smartphone market. The managers are committing more resources to researching something they think will revolutionize phones. author name writes, “All smartphone makers face the issue of stagnancy in hardware innovation. Samsung is currently working on developing a smartphone with foldable displays…” (Tanner). There has not been a ground-breaking development in smart phones in the last few years, so the managers believe
Manufacturers and service providers of cell phones are located throughout the world, although, as inCode, a wireless business and technology consulting firm, suggests, “Not many wireless carriers today have a truly global presence.” However, the company predicts that “the top 10 wireless carriers are going to make a push for globalization in the coming years” (“InCode releases…”). Most especially, inCode foresees service providers reaching to “unconquered markets like China, which is the fastest growing wireless market in the world” (“InCode releases…”). Some companies have already tapped into the global marketplace, spreading areas of coverage across continents. The cell phone manufacturer Nokia, for example, is rooted in Finland, but sells cellular phone products virtually everywhere on the globe. Service providers, although most often more less expansive in scope, are also trying to provide more global coverage.
Xiaomi sells handsets mainly through e-commerce websites, which cuts costs and helps lower the selling price.
Micromax was registered as “Micromax Informatics Private Ltd.” in March 29, 2000 with its registered office in New Delhi. The company is 10th largest mobile handset manufacturer in the world & second largest smartphones company in India. It was co-founded by Rajesh Agarwal, Sumeet Arora, Rahul Sharma & Vikas Jain.Four of them holds important portfolios in the firm:-
The low switching costs and strong growth of the industry has made it looks progressively and attractive for new entrants. Although, 75% of the market share is being dominated by the Top 4 brands (Mintel, 2011). Therefore, there is high barrier entry for the new entrants and huge amount of capital investment is needed to build up a possible competitor in the industry (Marketline, 2014).
When it comes to smart phone market share in the United States, Apple still trails Android by almost 10%. But if you are to break out the market share figures then you will notice that IPhone reigns supreme by a very wide margin. According to a lot of recent data compiled by ComScore, Phone’s share of the United States smartphone market now is about 43.6%, followed by Samsung which is at 27.6%. Apples market has increased by 4% almost every year, while Samsung has been dropping by 4% almost every year. Although Apple is doing a bit better than Samsung overall, Samsung is still topping Apple with their Android. During the second quarter of 2015 Samsung took a 21.7 percent of the global smartphone market, with shipments 73.2 million units. A reason I feel Samsung is doing much greater then apple right now is their ability to have all these different features, which not only add modern things to their phone but also longevity. With the three new water proof phones that Samsung has come out with Apple has yet to release their first
The global demand for cell phones has increased significantly over the years-from 284 million in 1999 to 410 million units in 2000 to 510 million units in 2001.
This report is mainly based on the case study Emerging Nokia, using the frameworks and concepts we have learned to analyze the case. This report is divided into 5 parts, first is the summary of the case, the second part is about the competition Nokia faced, the third part is the factors that contributed to the success of Nokia, then the challenges Nokia may face in China and the recommendations to them and the last part is the conclusion of the report.
In the previous decade, Nokia relocated factories to developing countries with low labour costs, such as China, India and Vietnam. These operated alongside their European factories in Germany and Hungary. Losing “the battle of devices”, Nokia has decided to lower the cost of producing even more. As a part of a strategy to improve competitiveness, assemblies in Europe were shut down and the production sites near suppliers in Asia remained in operation. In addition, Asian governments offered tax and electricity benefits to drawn Nokia in (Cereal, 2015).
Samsung is an innovative company that focus highly on quality and specialised products, they became an electronics company in 1969 and they released their very first mobile phone in 1988. In 2006, they became the global leading brand within the television market and in 2011, they became the latest smart phone provider in the world and their successful innovation is furthermore expanding. Today Samsung Electronics has proven to be one of the most successful global brands to follow.
For the Samsung Galaxy Note 8, we expect the sales to grow in the first quarter of year one. With people still suspect about the phone there won’t be a fixed demand on a per month basis. After a couple months pending no problems with the smartphone people will have their faith in Samsung again and purchase the Galaxy Note 8. After the first year, we expect the Galaxy Note 8 to reach a profit of 1 billion dollars. During this section, I will explain the sales forecast for each month and for the next 3 years. Also, I will discuss the breakeven analysis of the Samsung Galaxy Note 8, the cost to build the smartphone, how much we are willing to pay for expenses and what expense we focus on the most.
Samsung Electronics Company (SEC) began doing business in 1969 as a low-cost manufacturer of black and white televisions. In 1970, “Samsung acquired a semiconductor business” which would be a milestone that initiated the future for SEC. Entering the semiconductor industry would also be the beginning of the turnaround phase for SEC. In 1980, SEC showed the market its ability to mass produce. SEC became a major supplier of commodity products (televisions, microwave ovens and VCRs) in massive quantities to well known original equipment manufacturers (OEMs). For this reason, Samsung was able to easily transition into a major player in the electronic products and home appliances market (Quelch & Harrington, 2008).