Apple and Samsung in the Mobile Phone Industry
The mobile phone industry has been dominated by two companies, – Apple and Samsung, which are driving the innovation and creativity in the deployment of technology in the entire world. Even though the companies have not always been the pioneers of mobile phone innovation, they have become the leaders in the recent past pushing out companies such as Nokia and Motorola from the market. Even though Apple and Samsung are the largest companies regarding market value, there are certain similarities and differences concerning strategies, marketing, and area of focus that have made the two to compete against each other in the recent past (Giachetti, 2013, 35). The purpose of the current paper is to compare and contrast Apple and Samsung, assess and evaluate their leadership roles and competition in the world today.
Similarities and Differences between Apple and Samsung
While the two giant competitors have become notable for their mobile phones, they were not often associated with the industry in the past. The two companies are late entrants into the mobile phone industry. Apple started as a computer software company building systems like Mackintosh and other innovative software. Saudagaran (2005), shows that Samsung was known for electronics and related equipment like TV, radio, fridges, etc. The entrance into the mobile industry was of a serendipitous nature and the two companies have gone ahead to forge a niche for themselves (Giachetti, 2013, 65). Apple, for instance, brought about a revolution in the mobile industry when it introduced the internet-enabled touch screen iPhone in the market. Apple, in its marketing strategy, has always presented itself as a leader in the industry, launching products, using pricing decoy, and referencing pricing to attract customers. The use of price decoy as a marketing strategy allowed Apple to introduce a range of products to the customers and provide them with a wide range of choices (Meza, 2009, 12-14).
In addition, the price decoy has taken the path of subsequent upgrading of the products, in the case of iPhone, which has been upgraded with numbers like iPhone 3, iPhone 4, iPhone 5 etc. Such a strategy became popular with Samsung as it sought to introduce a range of high-end phones. Therefore, they dubbed Samsung Galaxy with numbers differentiating the pricing. Both companies are popular around the world and have huge markets in developing countries where their products are hugely popular with young generation consumers. The difference between Apple and Samsung is a varied market capitalization. Samsung has a huge market capitalization due to its huge portfolio of products (Albanesius, 2012, 2). However, regarding mobile phones, Apple is a leader in market capitalization owing to the greater sale of mobile devices compared to Samsung. Apple is more focused on producing and promoting MacBooks and iPhones than any other range of products.
On the other hand, Samsung is producing IT and mobile device solutions as well as consumer electronics. The mobile segment is the largest one accounting for 60% of the sales of the company. However, both companies have a strong presence in the mobile phone industry having become popular for cutting-edge devices that are faster, have large capacity, and become extremely popular among the young consumers. Furthermore, Apple and Samsung have recognized their presence in a non-traditional segment of communication tools in computing where they are managing others with their cutting-edge commodities. Leadership plays a significant function in the branding of both companies with Apple highlighting on the person image of their Chief Executive Officer. Samsung, on the other hand, utilizes the brand image to direct its computing policy to improve its brand name across the different market hemisphere. The competition between the companies is not based on the hardware plan only, but on the software utilized in mobile phones and tablets as well. Most of the competitive advantage held by Apple has been generated by the function that leadership plays in launching the commodities. On the contrary, Samsung is assisted by a low cost price strategy that appeals to customers around the world.
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Albanesius, C 2012, Samsung Beats Apple as 2011’s No.1 Smartphone Maker
The article provides a comparison of the performance of the world’s largest smart phone maker, noting that Samsung has surpassed Apple as the leading manufacturer of 2011. Quoting reports from HIS Supply and Strategy Analytics, Albanesius (2012, 1) noted that one area of advantage for Samsung was the Samsung Galaxy line which has pushed the battle between iOS and Android as the two companies competed to become the leaders in software used in operating smart phones. The author of the article asserts that Samsung has managed to increase its shipment of the new phones by almost 300% that is an indicator of the popularity and demand of the products from the company. As noted by Albanesius (2012, 2), “Samsung advanced in 2011 because of its strategy of offering a complete line of the smartphone products, spanning a variety of price points, features, and operating systems.” Thus, the strategy of Samsung for manufacturing and distributing smart phones is a differentiating factor between Samsung and its leading competitor Apple.
Part of the strategy for Samsung involved the launch of its flagship products to have a sufficient impact on the market. Even though Android operating system has been instrumental in the growth of the company, it has not been so for other companies, such as Motorola and Sony Ericsson, which are using Android in their smart phones as well. A comment from the industry insider indicates that with numerous companies using Android as their operating system in smartphone, the Samsung supremacy in smartphone is threatened unlike Apple, whose iOS is not as common as Android. However, a fact that the author of the article notes is that the subsequent increase in the demand for smartphones around the world means that a space is being created for a two-horse race between Apple and Samsung since they battle for customers and market dominance in the future.
Ovide, S & Wakabayashi,D 2015, Apple’s Share of Smartphone Industry’s Profits Soars to 92%
While there are more than 1000 companies around the world involved in the production of smartphones, only one or two are the leading ones when it comes to making profit. For the year ending 2014, Apple made a 92% growth in profit reported in the previous year which shows that despite it being at number two behind Samsung when it comes to market share, the high-end smartphone devices made by Apple are popular with above average consumers who are willing to spend a fortune to get a share of the Apple’s product. Ovide & Wakabayashi (2015, 1) claim that Apple and Samsung account for more than 100% of the industry profit in smartphone considering that other companies are making losses. The claim of more than 100% might be outrageous, but it shows the seriousness with which Apple and Samsung have established themselves as the leaders and pacesetters in the high-end mobile phone industry. Besides, it might not be good for the consumer since it limits the available options and, therefore, concentrates the power in the hands of a few manufacturers who dominate the industry.
The focus by the authors is put on the financial power of Apple which is contributing to its influence and leadership in the mobile phone industry. Regarding mergers and acquisitions, Apple has remained an autonomous company seeking to influence the market in its own way. The same is true with Samsung which has helped to preserve its identity and appeal to its loyal customers as well. Such a strategy does not work for the immediate competitors where mergers for companies, like Lenovo Ltd, which bought the unprofitable manufacturer Nokia, have become a common phenomenon. The change in management and identity is an element that hurts competition and lowers the ability of competitors to compete with the established entities.
Moscaritolo, A 2012, Apple, Samsung Smartphones in Highest Demand Post-Holidays.
Moscaritolo (2012, 2) refers to a survey finding indicating that the two companies are poised to start a new year on a high end considering the high expectations by the customers within the mobile phone industry. It is a challenging position to start a year for two of the most valuable mobile phone companies working on antagonistic strategies to outdo each other. While the competition is good for the consumers regarding the quality and innovations of the products, the competitors are pushed out of the way even since the two have become the dominant players in the industry. The entrance of Apple as a competing leader in the smartphone category is supported by the high demand from first time Apple product owners. Noting the strong factor, the author quotes a commentator in the mobile phone saying “Apple has never dominated smartphone planned buying to this extent more than two months after a major new release.” The above is an indication that the influence by the leading mobile phone maker is resonating with the majority of the consumers in North America as well as around the world.
Samsung is marketed as a low-end high-quality company providing products for everyone. It is essential especially for appealing to emerging markets where the demand is high but the purchasing power is low. Increasing the demand for Samsung products, which is second to Apple, will require a change in the strategy, including an introduction of the different product range. Such an approach might serve as a differentiating factor between Apple and Samsung, the two companies that have always been in the limelight for their cutting-edge innovations, strong marketing and distribution channels. The trigger for the increased demand in the past was the use of Android software, but it has changed since pricing, distribution channels, and the general knowledge that customers have about a product come into play as important factors.
Chmielewski, D 2015, Apple and Samsung Are Now in a Dead Heat for Smartphone Dominance
The article is about the annual and quarterly sales from the two giant companies. Written in 2015, the author presents the most up to date information on what makes Apple different from Samsung or what makes them similar. In the preceding years, Samsung’s market share of smartphone has been almost twice that of Apple. However, Chmielewski (2015, 1) indicates that Apple is closing up the gap in the smartphone competition as the two companies have nearly equal dominance in the mobile phone market. The latter is not beneficial for Samsung which has enjoyed the top sport for three consecutive years without ceding an inch to its competitor. There is the evidence of the increased competition between the two companies as “Samsung appears to have lost high-end phone customers to Apple, which jumped on the big-screen bandwagon with its iPhone 6 and iPhone 6 Plus — and achieved record sales.” Part of the reason for heightened competition for Samsung is the emergence of competitors in the low-cost phones like Lenovo and Xiaomi, who have eaten the market share of the giant company.
The company blamed intensified competition in product and pricing even though the market has continued to grow as middle consumers demand high-end mobile phones. Within such a context, there is a need for the increase in differentiation and innovation of products from the two companies as they seek to cement their position as the top mobile phone makers. Chmielewski (2015, 2) further argues that the opportunities and strengths presented by each player in the mobile phone industry have not been exhaustive. Apple still develops cutting-edge products even though the marketing strategy has dwindled since there is no pomp and colour during the product launch as it was in the case with the late CEO Steve Jobs.
Mathew. J 2015, Strategy Analytics: Samsung Remains No.1 mobile phone Vendor Despite Tough Competition from Apple
Despite the immense popularity of Apple products and the fact that millions of its devices are shipped annually, Samsung remains the top mobile phone maker in the world. There have been inroads made by Apple in a market that has been held traditionally by Samsung. According to Mathew (2015, 1), the 12% reduction in the shipment by Samsung has not been enough to be unsettled as the leader in smartphone making. However, it points out to a changing demographics are more people starting to look for quality and value. The low-cost advantage held by the South Korean maker is no longer giving out the advantage needed. A part of the reason for the reduction in the market share and a call to change in strategic approach has been changes in some of the biggest markets for Samsung in Asia, India, and China where not only there is an increase in competition but the taste of consumers is changing as well. As Mathew (2015, 2) notes in the article “Samsung continued to face challenges in Asia and elsewhere, but its global performance has stabilized sufficiently well this quarter to overtake Apple and recapture the first position as the world’s largest smartphone vendor by volume”.
The challenges are brought about by the change in social, economic, and political environment, for instance, the incessant lawsuits against competitors as well as competitors suing for copyright infringement. Such claims have the potential to lowering the value of a company and dimming the prospect of making higher sales in a given market.
Additionally, there is the fear that the changing political environment in Europe is going to affect the lives of millions of potential consumers who would rather purchase a cheaper product from the competitors rather than pay premium for a better quality. The dynamics are changing the competition and leadership landscape between Apple and Samsung in the mobile phone industry.
The current paper is about the dynamics that drive players in the mobile phone industry. Apple and Samsung are chosen since they are the biggest players and are responsible for setting the trend in the mobile phone industry.
This essay will compare and contrast their business practices and strategies that have given them an advantage over hundreds of other mobile phone makers. In addition, the paper focuses on assessing and evaluating the leadership and competitive role that the companies play in the mobile phone industry. It will focus on the competitive strategies of Apple and Samsung.
The fact that Samsung is taking part in several other products, it is clear that its approach has been successful by market share and profit earning. The rational is based on the contents of the financial statement, as it indicates that it is among the best performers in the mobile industry on the market (Rich et al., 2011, 19-23).
The statement indicates that Samsung is performing well on the basis of comparison with Apple Inc as will be enumerated in the chart below. The implication here is that Apple is the major competitor for Samsung, and hence, the rationale for the presence of it being regarded as among the best two.
Apple, as a mobile phone company, has done well based on its competitive performance with Samsung. Apple is performing well on the basis of administration and competitive advantage (Wahlen et al., 2014, 7-11). Significantly, the firm is generating results that are worth its presence on the market.
The above two charts indicate the performance of the two organizations which is rather competitive and profitable since they are regarded as the major market indicators. The performance of the two firms shows that as of 2012, Samsung performed better on the basis of total revenue as compared to Apple Inc. Additionally, the services initiated by both firms show that Samsung was able to perform better when compared to Apple Inc. Song & Lee (2014) show that in 2014, Samsung continued to perform better than Apple Inc, which shows that Samsung can be regarded as the firm to beat in the business of mobile undertakings. The implication for the two years is an indication of how Samsung has dominated the mobile industry (Graham et al., 2012, 22-26).
According to Robinson, Henry, Pirie & Cope (2015), as more firms are taking part in the mobile industry, the competition is becoming stiffer for the large companies like Samsung and Apple Inc. An example is noted in the above charts, whereby Apple has done better in 2015 as compared to Samsung Inc (Wegandt, Kimmel & Kieso, 2015, 14-17). The implication here is that more firms are coming up with new products with the process that apparently competes with Samsung. The outcome is shown on the basis of Samsung not gaining their market needs, and as a result, Apple has edged Samsung (Warren et al., 2016, 8-10). The comparison initiated from the charts that represent Apple and Samsung indicate that the competition in the mobile industry is a changing trend, but Apple and Samsung remain the primary leaders. The rationale is based on the fact that they know their market share, and what needs to be initiated to offer the clients their needs (Robinson et al., 2008, 6-9).
In conclusion, it is apparent that the services being initiated by both Samsung and Apple Inc are fundamentally based on a global market point of view. The two firms were not initially associated with mobile technology, as long as they are regarded as the late entrants in the mobile industry. It is true that Apple started as a computer software organization building systems whereas Samsung was known for electronics and related equipment like TV, radio, fridges, etc. Apparently, the two companies have done well on their part since despite being associated with other electronic tools, their presence in the mobile industry has proved their relevance to be a positive one. Besides, it is true that they have created employment and increased revenue in the States due to the fact that they have put up their branches globally. Furthermore, the use of price decoy as a marketing strategy has been initiated by two firms, hence, the reason for their dominance in the market. The strategy fits their needs on the basis of satisfying the needs of the clients and the market as a whole.
Speaking about the matters associated with the competition, the two organizations are doing well as long as the mobile industry is currently looked at as a two-horse race. The reason for the two being regarded as the primary dominant firms is based on the fact that they earn huge profits from their business. Between 2012 and 2014, Samsung has significantly dominated the market. The implication is that Samsung has led other firm in the mobile industry on the basis of offering products with different prices that are affordable for their clients. As the modernity develops, more firms like Sony Ericsson have come into the market utilizing the strategy being used by Samsung.
The outcome of cost effective by other firms has led some of the customers from Samsung to drift on the other side.
The implication here is that 2015 indicates that Apple is going to lead the mobile industry in case the trend of cost effective continues to grow. Currently, Apple is leading the mobile industry since they sell products that are genuine and expensive. Significantly, the competition between Samsung and Apple show that despite being the two primary leaders, more effort has to be initiated to counter the small firms. Based on the fact that the individuals, who work at Samsung and Apple Inc, will be used to attain information on what is taking place in their organizations, it is a good approach. The relevance of the approach is the outcome of the needed information will be based on a truthful point of perception. It is true as such participants will offer information that will be based on experience attained while working there.