Ronnie05's Blog

Modern day Dell? Or Sony? Or is there something more to Samsung?

Posted in Industry updates, Mobile Devices and Company Updates by Manas Ganguly on January 15, 2013

Q4, 2012 revenues- $52.7 bn, profits- $8.8 bn.CY 2012 revenues – $188bn, profits- $27bn.

Samsung is on a roll and having thumped Nokia four quarters back, Samsung is taking the fight to the mighty Apple. Samsung is already the no.1 Mobile phone maker and smart phone maker globally. Also, its foray into Smart Cameras and Refrigerators have altered Samsung’s position from a Fast Follower to a Technology Leader in the Industry! 2012 has been very productive for Samsung as it seems to have a transition from a moderately successful electronics Chaebol to the leading non-iOS device maker. Interestingly enough Samsung and Apple make 104% of the Mobile devices profits – leaving no headroom for any investments from any other Mobile device maker. Samsung’s relentless progress in the Mobile-tech sector over 2012 have christened it as the Fifth Horsemen – next to Google, Apple, Amazon and Facebook. (and I am shocked by the absence of Microsoft in that list by MG Siegler).

The Fifth Horseman- Samsung!

Even while Samsung has made its modest efforts to extend its run in smartphones to Smart TVs, Smart Cameras and Smart Refrigerators – the key to Samsung is and will remain to be smartphones. If smartphones as a device follow the PC/Laptop route – i.e only incremental changes and no quantum leaps- then Samsung will end up the HP, Compaq and Dell route – where these players kept producing laptops until laptops became redundant – due to the advent of Smartphones and tablets (Handhelds is the industry terminology). Those profit figures will be difficult to emulate year on year in horizontal device domain.

Currently, at this point of time, Samsung seems to be going the Sony Way – Like Sony had the Walkman, the Bravia TV, Sony Music system, Vaio laptops, Mobiles & Smartphones, Cameras and other very strong sub brands in the consumer segment and has been largely unable to piece it together in a coherent strategy. The lack of this coherence was what has led to the slow skid at Sony. Samsung similarly is invested in a dozen and more device categories – TVs, Mobiles, Tablets & Smartphones, Laptops, Cameras, Refridgerators, ACs and Washing systems and in the current context is seemingly trying to put all these devices in the connectivity era. However, that is nothing more than just a smart tactical move – and Samsung knows this. Samsung’s dilemma is about not being able to marry these disparate components into one converged strategy.

(to be continued)

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