SEOUL (Oct 28, 2011): Samsung Electronics Co surpassed Apple Inc as the world's top smartphone maker with more than 40% shipment growth, and forecast strong sales in the fourth quarter, as it aims to consolidate its lead against rivals.
Samsung, which had little traction in the booming
smartphone market until early last year, has since staged a strong comeback and
reported a record profit from handset sales in the third quarter on Friday.
"Looking ahead into the fourth quarter - when
industry demand is traditionally at its peak - Samsung expects sales of mobile
devices to remain strong and flat panel TV shipments to increase," Samsung
said in its earnings statement.
Profits from the telecoms division more than doubled from
a year ago to 2.5 trillion won (RM6.96 billion) and accounted for 60% of the
total profit, mitigating a sharp plunge in earnings from its bread-and-butter
memory chips.
Shipments of smartphones jumped more than 40% from the
preceding quarter and 300% from a year ago.
The growth leapfrogs Apple, which sold fewer iPhones in
the third quarter from the previous quarter. Apple's iPhone sales slid to 17.1
million units from the second quarter's 20 million units.
Samsung didn't provide third-quarter sales figures, but
the percentage growth numbers suggested shipments may have risen to around 27
million units from second-quarter's 19 million units. Nokia , which is also
slowly regaining lost ground, sold 16.8 million smartphones.
By 0125 GMT, Samsung shares were up 1.4% versus a 1.7%
gain in the wider market .
Samsung, the world's biggest technology firm by revenue,
reported a 4.25 trillion won operating profit for the July-September quarter on
Friday, broadly in line with its earlier estimate of 4.2 trillion won.
That was down from 4.9 trillion won a year ago but up
from 3.8 trillion won in the preceding quarter.
"I expect to see earnings improve slightly in the
fourth quarter, and strongly in 2012. Its telecommunications devices business
will continue to do very well, and so will non-memory chips," said Lee
Sun-tae, an analyst at Meritz Securities.
Samsung, the biggest handset maker in Google's Android
camp, however, faces challenges as the new iPhone, introduced earlier this
month, is scoring strong sales, while Nokia is fighting back with its first
phones based on Microsoft's Windows software.
Sony Corp also announced on Thursday that it would take
full ownership of its mobile venture Sony Ericsson in a bid to exploit its
music and video.
Samsung on Thursday announced the launch of its Galaxy
Note mobile devices, adding to the flagship Galaxy lineup of products. The
devices, powered by the Android software, will square off against a series of
new models released by Apple Nokia, and HTC Corp .
Sole profitable DRAM maker
Samsung's mainstay chip business saw its profit more than
halve to 1.59 trillion won from a year earlier, but it held up well as its
relatively high exposure to lucrative mobile chips helped the firm offset a
sharp plunge in prices of commodity computer memory chips.
Samsung was the sole profitable firm among major global
DRAM chip makers in the third quarter. Second-ranked computer memory chip maker
Hynix Semiconductor and Japan's Elpida Memory swung to deep losses as prices of
dynamic random access memory (DRAM) chips used in PCs tumbled about 50% in the
third quarter.
Its chip business is also benefiting from strong demand
for mobile processor chips used in Apple's iPhone and iPad as well as its own
Galaxy smartphones.
Samsung expected demand for PCs to remain weak in the
fourth quarter because of weak seasonality, while demand for mobile devices and
servers will be relatively strong.
"I see some signs that chip prices have hit bottom
as inventories are running out. However, we don't yet know when the industry is
going to pick up since macroeconomic uncertainties overshadow the demand
outlook," said Park Hyun, an analyst at Tong Yang Securities.
Samsung's display business posted losses for a third
consecutive quarter, as weak demand for TVs and PCs outweighed strong sales of
smartphones. But losses narrowed from the previous quarter, helped by strong
earnings from OLED display, which is widely expected to replace LCD as
next-generation flat-screens in mobile devices and TVs.
Samsung competes with Nokia in mobile phones, Sony and LG
Electronics Inc in TVs, Toshiba, Hynix in chips and LG Display in displays. – Reuters
SMARTPHONES. Smartphones is now becoming the
must-have device to everyone. From teenagers, to adults. Even for the old folks as well. And don’t get
shocked. Nowadays, even the kids that haven’t even entered the kindergarten
also play with stuffs like these; smartphones, table, etc. It has become a
trend for us that live in this technological era of the 21st
century.
Smartphone had actually been introduced by a long
time ago, in 1996 and the first smartphone introduced was the Nokia
Communicator. However, during that time, not many people care to even have any
phone. Only rich people will do. At this state, we can see how inelastic the
demand curve of the smartphone is.
But as time goes by, the popularity of smartphone
rises up. This has begun in year 2010 where the first generation of Apple
iPhone model was first being introduced. And now, over billions of people have it.
Maybe it’s kind of too complicated to explain it in words. So, to summarize it
up, refer to the graph provided below.
after some times had elapsed -->
Assuming that the price does change to lower, after the release, but
still during those earlier years, no one really uses smartphone; even if
there’s any. It would be just a small number of people. This might be because the
smartphone wasn’t really recognized by many in those days and our knowledge
about how to use these devices is still very shallow. Yeap. It’s inevitably
true that we just use the black and white screen colored phones and the bulky
computer desktop to assist us in our workings and daily routines. Time passes;
the world undergoes the development toward modernization, education about IT
being given in school. We came to know what are these new technologies are.
Some give a try, and then others follow. Why? Because that’s what we call it
TREND.
At this rate, the smartphones price elasticity of demand is considered
as price elastic. Just a slight change of price will affect the quantity
demanded. This is because everyone is like competing with each other to try
newer and newer things.
Samsung was initially the most leading device products. But in the time
of smartphones being introduced, Apple overtook Samsung and become the No. 1
leading smartphones products. However, Apple was no less experiencing the
growth of a leapfrog. They were being too comfortable with their rank and expect
it to stand for like forever. The company was unaware of the difficulties they
might come over. Just because they were the first to make the smartphones to
become popular, doesn’t mean that they are going to hold themselves in the
first rank like forever.
So after a while being dropped, Samsung then take over its place as the
number one throne. They studied about the Apple’s technology and improvised it
by a lot. And since Samsung is an older company compared to Apple, it is much
easier for them to win their ‘competition’ with Apple company because of these
2 main reasons; which are the technology and the bigger firm size.
Comparing Apple and Samsung, we can take Apple as a short-run company
and the Samsung as a long run company.
So, basically through that perspective, Samsung can produce more
production and in a better way because they are more advanced in the technology
thus allowing them to produce the product more efficiently and with a cheaper
cost. Besides, for being long enough in the market, it means that their firm
size also has gone larger and larger. Larger firm size guarantees them a lower
cost of raw materials. This is because the company has many contacts for the
materials and they would know who are the best in which. Also, because they are
having good relationships with many other firms, they may also get large
discounts for the materials they bought. Make sense?
But that’s not only it. Competitions of smartphones are not only happening
between Apple and Samsung product. There are many other alternatives too, such
as HTC, Blackberry, Nokia, Motorola, Sony Ericsson, etc.
We already know that one of the factors that affect the quantity of demand is the availability of substitutes. So in this case, There are two things that we can obviously see. First, Samsung demand curve is inelastic. Second, Apple product is quite elastic. Why am I saying so? This is because Samsung can still maintain its rank as the best smartphone compared to others even though there are a lot of rivals coming in their way, whereas Apple only hold the first place at the beginning, and its performance is now falling and falling and keep falling time by time. Other brands smartphones are not as bad too. They are quite good actually. So especially when the iPhone prices are not so reasonable when their features are just a so-so, people will refrain themselves from buying Apple iPhones already. The demand curve is very elastic. Different from Samsung. The demand curve is quite inelastic. Even if the price are high, well.. The demand might go down by a bit. But it’s not that noticable.
Price elasticity of demand
for Apple iPhone |
Not to be biased about these products or anything,
but from this article, we should actually know and always be aware of the
possible upcoming challenges. Always
know the how the environment around us is and be alert about SWOT (STRENGTH; to
know where and how to use it, WEAKNESS; to fix it and make things better,
Opportunities; So that we know when to take it and it’s not wasted just like
that and THREATS; so that we could be prepared and able to plan things wisely
so we wouldn’t have to face any loss.
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