IDENTIFICATION
OF APPLE’S TARGET COMPETITOR
Apple competitors range from a wide list of
brands. Looking at the 4 key competitive areas where Apple plays (PC,
Smartphones, Tablets, MP3 Players), the main competitors include the likes of HP,
Dell, Microsoft, Samsung, Google, HTC, LG, etc.
When looking at the key threats for Apple,
4 of them fit perfectly for the sake of this exercise, namely:
1.
Rapid technological change
2.
Android OS growth
3.
Price pressure from Samsung
over key components
4.
Competitors moves in online
music market
Taking into account that if we look at
Apple’s gross margin level, the company is mainly fuelled by the sales of both
iPhone and the iPad, accounting to more than 80% of their gross margin, it is
sensible to say that their main threats would come from a competitor who could
undermine these areas.
As such we have identified 2 of Apple main competitors
being Samsung (supported by Google).
THE
SOURCE OF SAMSUNG COMPETITIVE ADVANTAGE
1.
Hardware integration
flexibility with Open Source OS and Software
2.
Excellence in Engineering and
producing hardware parts and consumer
electronics
5.
Ability to market the brand
HOW
STRONG IS SAMSUNG OFFER TO THE MARKET?
1.
We do have offerings for all
segments in the smartphone market
(contrary to our main competitor), and we can
provide offers to first time smartphones’ users in low end countries.
2.
With the flexibility of using
Open Sources OS, we provide solutions to different consumers looking for
experience in different OS platforms (Android, Windows…)
3.
With the recent hardware
innovations, there is more vertical integration from consumers, on how they
experience their connectivity (personal and professional)
4.
Taking advantage of an Open
Source OS (Android), Google Play is growing faster and has more apps than the
Apple’s App Store
5.
Solid and steady growth YoY
with increased shipments on our smartphones globally. Q1 2013 indicates a 33%
global market share (6% growth over SPLY, growing nine times faster than
Apple), followed by Apple who shares fell to 17.9% compared to 22.8% SPLY.
We have set up our production facilities in
low cost countries. This allows producing goods with low production cost and
benefit us, as it can offer lower price and earn higher margins.
1.
Q1 2013 sales revenue increased
to $47.6 billion
2.
Audited operating profit shows
an impressive $7.9 billion (3% budget).
3.
Net profit of $6.4 billion (44%
YoY)
4.
Nevertheless, our growth decelerated
(percentagewise) compared Q4 2012, when our profits grew by 54% and revenue
rose nearly 17%.
FEEDBACK
FROM SAMSUNG’S CUSTOMERS
Knowing that for a satisfying user
experience of our products, it is important to a powerful handset and built-in
OS which is easy to use, yet with flexibility to be customized for individual
needs and taste, we believe there is still plenty of room for improvement in
the consumer satisfaction ratings of all our range of solutions on offering.
Recent J.D. Power and Associates
Reports for Q1 2013 in the U.S.
indicates that for the ninth consecutive study, Apple ranks highest among
manufacturers of smartphones in customer satisfaction, performing particularly
well in physical design and ease of operation. In this study, our brand was
rated forth in the list behind Study Average, and Nokia.
Although we believe it might have to do with the
OS system in use rather the hardware on offering, the fact that a recent
Barron’s report illustrated that iPhone users are “apparently” much more likely
to buy an iPhone again (77%) than Android users (48%), clearly indicates that
we still need to do much more to understand and create the kind of experience
our consumers have not yet even “dreamed” about.
