Samsung Group’s market cap amounts to US$288 billion (300 trillion won) at the moment, and its flagship unit Samsung Electronics posted US$190 billion in sales last year. The sales number is close to combined figures for Microsoft, Google, Amazon, and Facebook.
In 2012, 215 million units of Samsung’s handsets were sold worldwide, representing 40% of the total. The figure for this year is expected to reach 350 million units.
Even though the company maintains the top position in the smartphone market, it can be displaced anytime in the rapidly-changing global IT industry, as witnessed by Nokia and Blackberry’s sudden downfall. Then, what are the greatest challenges faced by Samsung that need to be tackled in order to keep its position?
In a December 14 article titled “Samsung; Uneasy in the Lead,” the New York Times (NYT) gave two pieces of advice to the Korean tech giant. First, NYT said that the company ought to be a tech trend setter. So far, Samsung has displayed its unparalleled concentration and capability in manufacturing the best possible products by following existing trends. As a result, the Korean firm occupies a top ranking position in various categories, but it carries the burden of making new trends on its own.
In fact, Samsung has made an effort to become a trend setter. The introduction of the industry’s first smart watch, the Galaxy Gear, was the first step, and the launch of its curved OLED TVs is another attempt to create a new trend. However, the market’s response to those products is not greatly favorable.
The newspaper also pointed out that the firm should be independent of Google. Most of Samsung’s mobile phones run on Android, Google’s operating system. The problem is that there is big concern about the Korean company’s waning influence in the global smartphone market at some point. Now, the competitiveness of smartphones is more likely to be determined by operating systems, apps, and other services rather than distinctive features of hardware alone.
Apple has a loyal customer base through a combination of hardware and software, while users of Samsung phones are less loyal. It means that Samsung users are more likely to replace their smartphones with other Android devices or even iPhones if they are not satisfied.
Therefore, Samsung’s decision to release products equipped with Tizen OS in partnership with Japan’s largest mobile carrier NTT DoCoMo can be interpreted as an endeavor to wean itself off of Google.