Samsung Competitive Forces Analysis

It is 2013 and the smartphone industry shows high profit potential when considering the Five Competitive Forces. While there are many firms in the market, Samsung and Apple are the two largest accounting for nearly half of the smartphones shipped worldwide. Samsung and Apple continue to offer differentiated products while their incumbents produce relatively inexpensive standard goods.

The threat of a new competitor entering the market is high. Google offers its Android operating system free-of-charge and it is also free of any patent restrictions. This reduces the capital requirements and provides a lower minimum efficient scale. In addition, Microsoft’s Windows OS can be customized and licensed as a cost effective alternative to a proprietary

Both Samsung and Apple manufacture tablets, as well as RIM. Samsung noted that people were primarily using their smartphones for other tasks than phone calls. Eighty-five percent of consumers use their phones for voice calls less than 20 percent of the time; 50 percent of users use their phones for voice calls less than 10 percent of the time. Tablet computers are a larger version of the phone without the traditional calling features using cellular data. Samsung has increased its Galaxy S display by 23 percent and Apple has increased the iPhone display by 8 percent. The increase in display size eliminates any real threat of substitution with the

The industry continues to see exponential growth each year with Samsung and Apple committed to the introduction of new products and services. Both makers, promote and support third party application development, enhancing the content and usability of their smartphones. Apple allows developers to sell their apps in the iTunes store for a 30 percent cut. Third party software development is one of the ways makers are committed to their industry and products. RIM’s release of their first tablet, the PlayBook, fell short of users expectations primarily due to its lack of content and applications. RIM did not promote third party software development. Both the Samsung Galaxy and Apple iPhone offer similar services they each have unique features that differentiate one from the