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?

Android Signup and view all the answers

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

Commoditization of Android phones Signup and view all the answers

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

Inaccurate product demand estimates Signup and view all the answers

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

$254 Signup and view all the answers

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

86% Signup and view all the answers

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

It sold more smartphones than any other company worldwide. Signup and view all the answers

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

Prioritize market share over immediate profitability Signup and view all the answers

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

Smartphones began offering true mobile computing and connectivity 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?

14% Signup and view all the answers

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

45% Signup and view all the answers

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

Surge in secondary market for used and refurbished phones Signup and view all the answers

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

$449 to $749 Signup and view all the answers

What general trend was observed in smartphone ownership by 2015?

Uneven growth stages in various parts of the world Signup and view all the answers

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

Increased the overall cost of smartphones. 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?

54% Signup and view all the answers

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

55% Signup and view all the answers

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

Android phones were more favorable due to their lower cost. Signup and view all the answers

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

$16.8 billion Signup and view all the answers

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

2.6 billion Signup and view all the answers

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

53% Signup and view all the answers

What factor is primarily driving smartphone purchases in developing economies?

Value-driven choices Signup and view all the answers

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

10 per cent Signup and view all the answers

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

2021 Signup and view all the answers

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

Xiaomi 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?

10.8 per cent Signup and view all the answers

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

Nokia Signup and view all the answers

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

17 per cent Signup and view all the answers

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

Second Signup and view all the answers

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

Samsung Signup and view all the answers

What is the primary focus of Samsung compared to Apple?

Product-focused Signup and view all the answers

What is a key advantage of Apple’s ecosystem?

Seamless connection between devices Signup and view all the answers

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

App Annie Signup and view all the answers

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

30 percent Signup and view all the answers

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

43 percent Signup and view all the answers

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

$5 billion Signup and view all the answers

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

Merchant fees for Samsung Pay Signup and view all the answers

Apple received what percentage of purchases made through Apple Pay?

0.15 percent Signup and view all the answers

What was Apple's total earnings in Q2 2015?

$58,010 million Signup and view all the answers

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

Japan Signup and view all the answers

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

Decreased by $5,010 million Signup and view all the answers

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

$20,280 million Signup and view all the answers

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

Greater China Signup and view all the answers

Study Notes

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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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.