Samsung vs. Apple Smartphone Strategy
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Questions and Answers

What was the impact of Samsung's inaccurate demand estimates for the Galaxy S6 and S6 Edge?

  • Sales of Apple devices increased significantly
  • Mobile division income dropped 38% (correct)
  • Market share of Android users decreased
  • Increased production costs

As of the second quarter of 2015, what percentage of new smartphone sales did Samsung account for?

  • 86%
  • 50%
  • 13.9%
  • 21.4% (correct)

Which of the following statements best explains the profitability discrepancy between Samsung and Apple?

  • Samsung's market share was significantly lower than Apple's.
  • Samsung had higher production costs than Apple.
  • The smartphone market was dominated by Apple's iOS platform. (correct)
  • Apple devices were priced lower than Samsung devices.

Which operating system is primarily used by Samsung smartphones?

<p>Android (C)</p> Signup and view all the answers

What was a major consequence of competition among Android handset manufacturers?

<p>Commoditization of Android phones (A)</p> Signup and view all the answers

What major problem did Samsung face in the hypercompetitive smartphone market?

<p>Inaccurate product demand estimates (B)</p> Signup and view all the answers

What was the average price of an Android smartphone in 2015?

<p>$254 (A)</p> Signup and view all the answers

By how much did Apple's profitability surpass that of Samsung by the second quarter of 2015?

<p>86% (A)</p> Signup and view all the answers

How did Samsung perform in terms of smartphone sales compared to its peers in the market?

<p>It sold more smartphones than any other company worldwide. (C)</p> Signup and view all the answers

What strategy did manufacturers like Microsoft-Nokia adopt regarding smartphone sales?

<p>Prioritize market share over immediate profitability (C)</p> Signup and view all the answers

What significant change occurred with the introduction of the iPhone in 2007?

<p>Smartphones began offering true mobile computing and connectivity (A)</p> Signup and view all the answers

What percentage of smartphone profits did Samsung manage to hold by the end of the second quarter in 2015?

<p>14% (B)</p> Signup and view all the answers

By mid-2015, what percentage of mobile subscriptions were attributed to smartphones?

<p>45% (A)</p> Signup and view all the answers

Which of the following was expected to impact the supply of Android phones significantly?

<p>Surge in secondary market for used and refurbished phones (B)</p> Signup and view all the answers

Which device price range represented models of the iPhone in 2015?

<p>$449 to $749 (B)</p> Signup and view all the answers

What general trend was observed in smartphone ownership by 2015?

<p>Uneven growth stages in various parts of the world (A)</p> Signup and view all the answers

How did the financing model impact consumers in terms of smartphone costs?

<p>Increased the overall cost of smartphones. (A)</p> Signup and view all the answers

According to the survey, what percentage of users were likely to upgrade their phones only when they were no longer functional?

<p>54% (D)</p> Signup and view all the answers

What percentage of respondents earning over $75,000 owned iPhones?

<p>55% (B)</p> Signup and view all the answers

What trend was observed regarding new smartphone customers in developing economies?

<p>Android phones were more favorable due to their lower cost. (A)</p> Signup and view all the answers

What was the revenue Apple logged in China during the second quarter of 2015?

<p>$16.8 billion (D)</p> Signup and view all the answers

How many smartphone service subscriptions were there worldwide in 2014 according to Ericsson?

<p>2.6 billion (B)</p> Signup and view all the answers

What percentage of iPhone users were likely to upgrade based on new model releases or carrier permitted upgrades?

<p>53% (A)</p> Signup and view all the answers

What factor is primarily driving smartphone purchases in developing economies?

<p>Value-driven choices (A)</p> Signup and view all the answers

What is the projected compound annual growth rate in smartphone subscriptions according to Ericsson?

<p>10 per cent (B)</p> Signup and view all the answers

By what year is the total number of smartphone subscriptions expected to reach 6.4 billion?

<p>2021 (D)</p> Signup and view all the answers

Which company was the best-selling smartphone brand in China by mid-2015?

<p>Xiaomi (A)</p> Signup and view all the answers

What percentage of market share did Samsung hold in China at the end of the second quarter of 2015?

<p>10.8 per cent (A)</p> Signup and view all the answers

Which of the following companies was NOT mentioned as a handset maker in the Asia-Pacific realm?

<p>Nokia (D)</p> Signup and view all the answers

What was the market share of Micromax in India by mid-2015?

<p>17 per cent (D)</p> Signup and view all the answers

What position did Xiaomi hold among the most highly valued startups in the world by mid-2015?

<p>Second (C)</p> Signup and view all the answers

Which company had the highest market share in smartphone sales in India by mid-2015?

<p>Samsung (A)</p> Signup and view all the answers

What is the primary focus of Samsung compared to Apple?

<p>Product-focused (C)</p> Signup and view all the answers

What is a key advantage of Apple’s ecosystem?

<p>Seamless connection between devices (A)</p> Signup and view all the answers

Which firm projected growth in global consumer spending on mobile apps from 2015 to 2020?

<p>App Annie (B)</p> Signup and view all the answers

What percentage did app stores traditionally take from app-generated revenue?

<p>30 percent (A)</p> Signup and view all the answers

What was the projected compound annual growth rate for mobile payments from 2015 to 2020?

<p>43 percent (C)</p> Signup and view all the answers

How much revenue did Apple post from its service offerings in the second quarter of 2015?

<p>$5 billion (B)</p> Signup and view all the answers

Which of the following did Samsung choose to forgo in pursuit of alternative revenue streams?

<p>Merchant fees for Samsung Pay (D)</p> Signup and view all the answers

Apple received what percentage of purchases made through Apple Pay?

<p>0.15 percent (B)</p> Signup and view all the answers

What was Apple's total earnings in Q2 2015?

<p>$58,010 million (B)</p> Signup and view all the answers

Which operating segment had the lowest earnings reported by Apple in Q2 2015?

<p>Japan (C)</p> Signup and view all the answers

How much did Apple's earnings from Europe change from Q1 2015 to Q2 2015?

<p>Decreased by $5,010 million (D)</p> Signup and view all the answers

What was the combined earnings for the Greater China and Japan segments in Q2 2015?

<p>$20,280 million (B)</p> Signup and view all the answers

Which of the following segments saw an increase in earnings from Q2 2014 to Q2 2015?

<p>Greater China (B)</p> Signup and view all the answers

Flashcards

Samsung Galaxy S6 & S6 Edge

Updated and new smartphones with extended usable screen space.

Demand Estimates Error

Samsung's predictions of product demand were wrong.

Overproduction/Underproduction

Samsung made too much of some models and not enough of others.

Smartphone Product Life Cycle

The time a phone is popular and sold.

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Samsung Q2 2015 Income

Samsung's 2nd quarter 2015 mobile division profits dropped by 38%.

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Market Share vs. Profitability

Samsung had more market share but Apple made more profit.

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iOS vs. Android

Two main smartphone operating systems: iOS (Apple) and Android (Google).

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Profitability Discrepancy

The difference in profit between two major smartphone companies in 2015, was because of price.

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Android phone commoditization

Many Android phone manufacturers led to a perceived lack of differentiation and a similar product experience.

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Android phone pricing pressure

High competition from many Android phone manufacturers drove down prices.

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Secondary market for phones

Used and refurbished phones became significant.

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Average iPhone price (2015)

US$687, ranging from $449-$749.

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Average Android price (2015)

US$254, ranging from $144-$768.

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Microsoft-Nokia profitability concerns

Less concern with smartphone profit margins.

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Smartphone evolution (pre-2007)

Limited connectivity and functionality on basic phones.

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Smartphone growth (2015)

3.4 billion smartphone subscriptions (45% of mobile subscriptions) globally.

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Smartphone Upgrade Cycle

The rate at which smartphone users replace their current devices with newer models.

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Financing Model (phones)

A method where carriers add the cost of a phone to a consumer's monthly bill, lowering upfront costs but increasing the overall cost.

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Upfront Cost

The initial cost of a product or service, paid at the beginning.

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Developing economies

Countries experiencing economic growth emphasizing cost-effectiveness.

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Android phones

Smartphone operating systems focusing on value-driven features and lower costs.

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iPhone

Smartphone operating system known for premium features and higher prices.

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Smartphone Market Growth

The increasing adoption and use of smartphones worldwide.

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Global Market

The entire world market.

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Asia-Pacific handset market growth

The Asia-Pacific region, particularly China and India, is experiencing rapid growth in new handset customers, leading to intense competition.

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Samsung's competitors in Asia

Samsung faces competition from numerous companies, including Lenovo, Huawei, Xiaomi, and many smaller companies, mainly focusing on mid-priced Android phones for developing economies.

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Xiaomi's dominance in China

Xiaomi, a Chinese consumer electronics company, became the best-selling smartphone brand in China, surpassing Samsung in mid-2015.

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Top 3 Smartphone Brands (China 2015 Q2)

Xiaomi (16.6%), Huawei (15.9%), and Samsung (10.8%) were leading smartphone brands in China during the second quarter of 2015.

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Top 3 Smartphone Brands (India 2015)

In India, Samsung (23%), Micromax (17%), and Intex (11%) were the leading smartphone brands in 2015.

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Ericsson's subscription growth projection

Ericsson predicted a 10% annual growth rate in subscriptions, adding 3 billion new subscribers, to reach 6.4 billion by 2021.

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Smartphone upgrade frequency (US)

American smartphone upgrade frequency is variable. This was a study from 2015.

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Apple's Q2 2015 Earnings

Apple's total revenue for the second quarter of 2015 was $58.01 billion, spread across different regions.

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Apple's Americas Revenue

In the second quarter of 2015, Apple's Americas region generated $21.316 billion in revenue.

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Apple's Europe Revenue

Apple's revenue from Europe in the second quarter of 2015 was $12.204 billion.

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Apple's Greater China Revenue

Apple's revenue from Greater China in the second quarter of 2015 was $16.823 billion.

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Apple's Japan Revenue

Apple's revenue from Japan in the second quarter of 2015 was $3.457 billion.

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Apple's Product Strategy

Apple focuses on building a connected ecosystem of devices and services, creating a seamless user experience across platforms.

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Samsung's Product Strategy

Samsung's strategy is product-centric, focusing on creating individual devices like phones, TVs, and appliances.

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App Store Revenue

App stores, like Apple's and Google's, take a percentage of revenue from app sales, in-app purchases, and advertising.

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Mobile Payment Growth

Mobile payments using smartphones are rapidly increasing, projected to reach $4 trillion globally by 2020.

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Apple's Services Revenue

Apple generates significant revenue from services, including app sales, media, and mobile payments.

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Samsung's Mobile Services Strategy

Unlike Apple, Samsung focuses on alternative revenue sources, such as advertising, rather than charging merchant fees for mobile payments.

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Impact of App Stores

App stores play a crucial role in the mobile ecosystem, influencing how developers create and monetize their apps.

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Mobile Ecosystem Dynamics

The mobile ecosystem is a complex interplay of device manufacturers, app stores, developers, mobile payment providers, and users.

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Study Notes

Samsung Mobile Market Share and Profitability

  • Samsung announced DJ Koh as head of its mobile division in December 2015
  • Koh's appointment signaled a desire to increase innovation in the smartphone market
  • Complex decisions needed addressing concerning profitability vs. market share
  • 2015 handset launches (Galaxy S6 and S6 Edge) faced criticism due to inaccurate demand estimations
  • This resulted in overproduction of some models and underproduction of others
  • Samsung's Q2 2015 profits dropped by 38% as a result

Market Position

  • Samsung sold more smartphones globally than any other company in 2015
  • Samsung and Apple were the only 2 profitable companies in the publicized handset market
  • Although Samsung held a greater market share (21.4% vs Apple’s 13.9%), Apple had substantial profitability (86% to Samsung’s 14%)

Reasons for Profitability Differences

  • Pricing of the iPhones and Android phones was a significant difference; iPhone price was substantially more than Android phones in the same period
  • Large number of Android phone producers caused a perceived lack of differentiation
  • Increased secondary markets (used phones) added to the oversupply

Smartphone Market Overview

  • 2015 saw 7.6 billion mobile subscriptions globally, with 45% being smartphones
  • Smartphone users in developed nations were primarily upgrading existing phones, rather than acquiring new ones
  • Consumers in developing economies were more value-driven and favored less expensive Android phones
  • New users were driving aggressive growth in the global market, adding 3 billion new subscribers

Competition in the Asia-Pacific Region

  • Many competitors to Samsung emerged from Asia, including Xiaomi, Huawei, and Lenovo
  • These companies had different pricing strategies and targeted various customer needs, with many competitors' models falling in the low-to-mid market segment to appeal to developing economies
  • High demand and competition for new handsets was a key factor impacting switching rates, especially when new iPhone devices released

Operating Systems

  • Android was the dominant operating system globally (over 80% of smartphone operating systems)
  • Samsung primarily uses the Android operating system despite having models using Microsoft Windows
  • Different user-centric features between Android (Samsung) and Apple (iOS)

Mobile Applications and Services

  • Growing usage of mobile applications (particularly data usage) was a major factor in the mobile industry
  • Focus shifted from hardware to applications and mobile service usage
  • Mobile devices began managing other devices (smart home appliances, launching cars, etc.)

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Related Documents

Samsung Mobile Market Share and Profitability in Smartphones (2015) PDF

Description

Explore the competitive landscape of Samsung and Apple in the smartphone market through this quiz. Assess your knowledge on demand estimates, sales percentages, profitability, and market strategies around the introduction of key devices like the iPhone. Test your understanding of the factors influencing Samsung's performance relative to peers.

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