1995, 2012 and New Milestone Year
Dating back to 1995, there were some highly ranked world events such as nerve gas attack in Tokyo subway killed eight and injured thousands - the Aum Shinrikyo (Supreme Truth in English) cult is to blame. Rwanda massacre ended up with death toll 2,000 people and still unfinished, but more serious now Israelis and Palestinians agreed on transferring West Bank to Arabs on September 24. Israeli Prime Minister Yitzhak Rabin slain by Jewish extremist at peace rally on November 4. *However year 1995 has been remembered as one of the most unforgettable years to IT industry as then was when PC sold more than TV for the first time ever in the history of US market. As a result, people emailing started helping hands on postmen even more. (* Ref : Reinventing the brand by Jean-Noel Kapferer)
I admit that I was surprised by the fact about that 60 something percent out of whole Samsung sales in Scandinavia made out of phones when I heard from Ms. C working for Samsung Nordic AB a couple of months ago. when it comes to Samsung, I always thought of HA, white goods and laptops. Albeit I of course already knew Samsung was taking over the phone market globally but 60 percent seemed much more than I thought it would be.
If year 1995 was the year to many of the 1st generations of Palo Alto such as Dell, HP, Sony, IBM and others that most of these are now disappeared or acquired mostly. 2012 was the year for Samsung. Samsung made number 1 in the sales of cellular phones over the World in 2012 for the first time ever after 4 year chasing after Nokia.
2011
Nokia: 422 million sold
Samsung: 330 million sold
Apple: 89 million sold
LG: 86 million sold
ZTE: 57 million sold
RIM: 52 million sold
HTC: 48 million sold
Motorola: 40 million sold
Huawei: 41 million sold
Sony Ericsson: 33 million sold
Others: 597 million sold
2012
Samsung: 396.5 million sold
Nokia: 235.6 million sold
Apple: 135.8 million sold
ZTE: 55.9 million sold
HTC: 26.5 million sold
Others (including ZTE, Huawei and Lenovo): 635.4 million sold
2013
Samsung: 299.8 million sold (31.0% market share)
Nokia: ? million sold (?% market share)
Apple: 150.8 million sold (15.6% market share)
ZTE: million sold (?% market share)
Huawei: 46.6 million sold (4.8% market share)
Total: 968 million sold (100.0% market share)
(Ref : Wikipedia, http://en.wikipedia.org/wiki/List_of_best-selling_mobile_phones)
According to a report of market share of smartphones in 2013, It is not a surprise any longer but the most selling country was China by almost 50%, following countries were the other BRICs(Brazil, Russia, India and China) and USA. In China market, Samsung made 31,3% out of that 50% in sales and Apple (15,3%), LG (4,8%), Lenovo, Huawei and others lined up on the list. Another interesting fact is that USA is one of the a few countries or the only country that Apple is more popular than Samsung phones. By 2013, 1 billion units of smartphones have been sold in global market and here you can see the sales chart covering from 2011 to 2013 Fall.
(Ref : IC Insights)
It seems just impossible to think about smartphones without Internet. There is no consensus on the exact date when the modern Internet came into being, but sometime in the early to mid-1980s is considered reasonable. Rapid growth - especially from 1998 - on Internet access all over the countries made people have new views. Hierarchy in media distribution channels has been changed and Internet became the most valuable method toward globalization.
(Ref: Internet Access in U.S.Public Schools and Classrooms: 1994–2005 by US Department of Education)
As Philip Kotler who is one of the most famous marketing consultants and professors mentioned on Marketing 3.0, new wave technique helping connectivity and interactivity useful consists of three elements - 1.cheap computers and cellular phones 2.cheap internet broadband 3.open sources, which makes a big change from simple consumer to proconsumer. You might remember scenes from a well known movie from Korea called Old Boy that main character Daesu got stuck in a room watching TV to educate himself for a long time. If there was 2014 version of the movie, then Daesu would use a smartphone hooked up with wifi to teach himself and using internet is more efficient, informative and much faster in finding information than just watching TV, thanks to the point of being interactive that Internet has.
Smartphone has been invented from the demands that people like to use cellular phone with Internet friendly design and it literally reached a new level with technology. Especially it makes standard of living better in quality and even lets people have a new sight to see social issues and struggle against supreme power such as government as we could see how Arab Spring occurred. We need to realize United Arab Emirates and Saudi Arabia are the countries highly ranked using smartphones the most and how it affected two countries. One of the most noticeable changes was that Arab women got higher social status than ever since. Here you can view the list of countries by smartphone penetration and shows the percentage of the population owning and using a smartphone.
(Ref : http://en.wikipedia.org/wiki/List_of_countries_by_smartphone_penetration)
Furthermore, open education circumstance on Internet from Wiki and Khan Academy (non profit education organization created in 2006 by educator Salman Khan) to free-to-watch lectures of Harvard and MIT brings you new value and a total change on education system. Now anyone can learn anything in deep without going to school or library and teachers at school can give more efforts and guidelines to each student separately, which helps them obtain more opportunities to get more creativity.
With development of Internet technology, there have been noticeable other techniques in science. One of them is 3D Printing (addictive manufacturing) and it already started helping many groups of people including startup companies. This new technology will be definitely new hope for kick starters with creativity especially not having much finance background even though we might need to generate some sort of regulations on using this incredible method looking at a side effect of it – As an example, hand gun made out of 3D printer in Japan and the maker got arrested for carrying and manufacturing illegal weapon.
(Ref : http://www.theguardian.com/world/2014/may/08/japanese-man-arrested-guns-3d-printer)
New ways to create innovations by
using a technology such as 3D Printing helps start-up companies in diverse
ways and wearable market is one of the markets that many startup companies
are putting effort on getting into. A smart watch Pebble released in 2013
was funded via crowd funding and they got raised 10,3 million US dollars by
68,928 people, making it the most successful product funded through crowd
funding in the history. Best Buy made sold out within five days since they
started selling in July 2013.
Smart Watch, Pebble
What is Wearables?
ZDNET explains,
For those not in the know, 'wearables' refers to the electronic technologies or computers incorporated into watches, contact lenses, eyewear, bracelets, rings, clothing and more — all designed to be worn on the body.
(*Ref : http://www.zdnet.com/wearables-an-emerging-trend-with-staying-power-7000030015/)
Google Glass
Google Glass, Sony Smart Watch, Pebble, Ipod + Nike and Samsung Galaxy Gear are the ones you can buy in the market now. Still wearables are still new to the field of IT but CNN Tech headlined "Smartphones are fading. Wearables are next" (* Ref : http://money.cnn.com/2014/03/19/technology/mobile/wearable-devices/) and LG research institute also made a foresight, future IT and devices such as wearables let make a change from P2P to M2M (machine to machine) and they also predicted that married couples will wear a smart ring with OLED display using kinetic energy and wearables will be the most important devices in IoT (Internet of things) (*Ref : "웨어러블의 미래, 패션에서 길 찾아야").
Money Morning Reports :
Wearable tech is an enormous profit opportunity for the tech titans. Research firm IDC projects the wearable tech market will have a compound annual growth rate of 78.4% over the next four years. And Credit Suisse says wearable tech will explode tenfold into a $50 billion market within three years.
As a matter of fact, the first wearable was born with gambling. It began longer than 50 years ago as a way to cheat casinos, however development has since remained stagnant. Inventors built some of the first wearables in the 1960s and 1970s to count cards and improve a gambler's odds at the roulette table. MIT professor Edward Thorp was admitting on his second revised version of his book, Beat the gambler that he was using the wearable in casinos. In 1974 Keith Taft was using another wearable to win over blackjack at table. From there, working with wearables remained a small-scale field. Aside from the explosion of calculator wristwatches in the '80s, wearable tech saw little change in terms of consumer devices. Eventually mainstream player Google made a new milestone in the history of wearables on putting out Google Glass in 2013. It gathered many eyes and ears of people and media on wearables ferociously. As many media tells, 2014 will be the year of the wearable.
(*Ref : http://mashable.com/2014/05/13/wearable-technology-history/)
In July this year Samsung Electronics vice president Jaeyong Lee had a meeting with Kelvin Plank who is CEO of Under Amour, an American sports clothing company that loved by many people including famous sports stars and soldiers in Afghanistan because of functions that the products have. People think that the meeting was for potential partnership to make a breakthrough over the market that Apple made a deal with Nike. One recent rumor regarding the device Samsung will come out with is that some kind of combination wearable item covering Google Glass and sports clothes in one. If the rumor appears true, then maybe it needs to be more innovative than Wear-comfort-able, a product having activity tracking function that Taiwanese company AiQ introduced to the market before. (* Ref : http://www.aiqsmartclothing.com/)
According to another report published on Aug 4 by Canalys, Chinese company Xiaomi founded Lei Jun Chinese people called Steve Jobs and Hugo Bara who used be vice President and product spokesman of Google's Android division is working for now made number 1 in smartphone sales in China surpassing Samsung in 2nd quarter of this year for the first time ever. Over all Xiaomi grew 240 percent comparing with the 2nd quarter last year, to take 14 percent of the Chinese smartphone market. Thanks to its huge growth in China, Xiaomi became the 5th largest smartphone maker in the world. How they came up like this fast was that they went to take a different scheme, that is called agent pricing. They put out 49 inch android smart TV by the price of just 640 dollars which is almost product cost of it this year. Their smartphones are following the same way now and their strategy is to make profit out of contents instead of the products. Now Samsung seems like it is encountering a difficult situation over big players like Apple and Sony and now Chinese companies like this Xiaomi. As a matter of fact, it was foreseen that Samsung had a weak period in the 2nd quarter when they filed a quarterly repot in July this year.
Here is Samsung’s complete statement on all the factors that affected second quarter results:
The earnings forecast is the result of the strong Korean currency throughout the second quarter as it appreciated against the dollar, euro and most emerging market currencies.
The company also witnessed a slowdown in the overall smartphone market growth and saw increased competition in the Chinese and some European markets. And this led to higher inventories for the medium- and low-end smartphones. The second quarter is a seasonally weak period for smartphone demand in China. Samsung also saw an increase in inventory due to price competition and a weaker demand for 3G products ahead of the expected growth of 4G LTE products in the Chinese market. Weaker demand in the second quarter also led to increased inventory in Europe, where Samsung has a 40 percent market share approximately.
In the case of tablets, sales were sluggish due to a longer replacement cycle than that of smartphones, which is usually between two to three years. In addition, higher shipments of 5-to-6 inch large screen smartphones replaced demands for 7-to-8 inch tablets. With the release of new smartphone devices in the second quarter, Samsung launched various promotions to reduce existing inventories in sales channels and this increased the company’s marketing expenditure compared to the previous quarter. The weak demand for smartphones also affected the System LSI and the display businesses that provide key components and screen technologies.The company cautiously expects a more positive outlook in the third quarter with the coming release of its new smartphone lineup. Samsung does not expect any major marketing expenditure to occur in the upcoming quarter.
Samsung expects stronger smartphone sales and this will have a positive impact on the company’s display panel businesses. In the memory business, following stable market conditions in the first half, seasonal increase in demand in the third quarter is expected to drive stronger earnings growth. Samsung will continue to expand its B2B businesses and looks forward to exceeding consumers’ expectations by offering the most innovative wearable devices, smart home appliances, and Internet of Things (IoT) devices.
As the report mentioned at the bottom part above, we can assume Samsung will try to make a game changing with wearables to keep the market adamantly. Samsung takes this as a new opportunity and may find a solution to survive in the field from Marketing 3.0 written by an American marketing author and professor Philip Kotler. Still China is not widely opened for internet access - for instance Facebook is still blocked - unlike the country has Weibo that made its historical successful debut on Nasdaq and another big dragon Taobao, which is a lot like Ebay and is about to do IPO and to be listed on Nasdaq later. Samsung should make more proconsumers through socializing with people in deep to be a SBE (social business enterprise). It makes end-customers, retailers, chains and manufacturers feel more loyal and closer to the brand and Samsung should not forget to show a global brand images contributing to society as GBE (green business enterprise).
From PC Magazine:
The iWatch will have the same status symbol power as many other Apple products, especially at the beginning. It has the potential to be a threat for the industry, and nobody should sit with their arms crossed.
In the next few months, Samsung will definitely get some more competitions from Google, Microsoft that bought Nokia, Apple, new born Chinese companies and a few startups in this space. For better or worse, none of them know as much about you as Google does, so it’ll be hard for them to replicate the Google Now experience. If Google is appealing to the user’s sense of convenience, Apple is focused on fashion, having poached top execs from Burberry, Nike, Yves Saint Laurent, and Tag Heuer and Chinese companies like Xiaomi might focus on agent pricing. Samsung then should go for fashion Apple follows, intercorrectedness that helps making internet technology and fast internet combine and of course the most important innovations no one ever has reached yet - To name a few, a body scanning wearable communicating with doctors wirelessly and a wearable with hectic function that can check health condition. By creating these innovative new wearables, Samsung can become a company no copycats will be ever made after.
Healthpals - Wearable health monitoring system
Google executive chairman, Eric Schmidt says
The Internet is the first thing that humanity has built that humanity doesn’t understand, the largest experiment in anarchy that we have ever had.
There are a bunch of unexpected things to happen in upcoming years and we are still pretty much experimenting with Internet now. Thanks to gradual changes from P2P to M2M and being robotic in real life, wearables passing the era of PC, Internet and smartphones will be the most valuable in IoT in the future. As preoccupying the wearable market, Samsung with innovative minds as socializing and green business enterprise will jump over wall huggers (Samsung called Iphone users in Samsung Galaxy S5 commercial) and little rice (Literal translation of Xiaomi in English) and new milestone year after 1995 and 2012 will be made.
BY KY O.N.O
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