Smartphones cos stories


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Smartphones cos stories

  1. 1. Smartphone Cos Stories. Samsung success story: More about marketing than innovation? Reuters, April 05, 2013 Samsung Electronics is spending more on marketing than R&D for the first time in at least three years, prompting some pundits to warn that the IT giant is sacrificing innovation at a time when the market is teeming with ever smarter gadgets. The South Korean firm, which warned on Friday it will not post record quarterly earnings for the first time since 2011, looks set to spend big bucks on marketing upcoming mobile devices, including the Galaxy S4 smartphone, to convert more iPhone and iPad users loyal to arch rival Apple Inc. While the new Galaxy smartphone, unveiled to much fanfare in New York last month, will boast a motion-detecting technology that stops and starts videos depending on whether someone is
  2. 2. looking at the screen, and flip between songs and photos at the wave of a hand, industry watchers say the device would not overturn an industry that lives and dies by innovation. "(Samsung) lagged behind in creating a new category. Apple created a new category with tablets. We are waiting to see something like that happen from Samsung," said Rachel Lashford, an analyst at research firm Canalys in Singapore. Samsung spent a record 13 trillion won on marketing last year. That was $1.3 billion more than what it poured into research and development. The firm does not provide marketing and R&D spending forecasts. Some analysts said they expect Samsung to continue spending more on its marketing campaigns than on R&D this year as it fights the next wave of products from Apple. Smartphone makers are increasingly just tweaking existing specifications such as increasing screen sizes. Every gadget launch by a major global tech giant has so far underwhelmed, lacking the 'wow' factor of old and subsequently pushing their share prices lower, some analysts said. Apple has tumbled nearly 40 percent since the stock soared to more than $700 in September. Shares of Samsung hit a record in early January but have since fallen nearly 3 percent. A lack of product lineup in the longer term is also capping their upside, analysts said. "There is not that much visibility on products next year, but we expect Galaxy Note 3 later this year," said Mark Newman, a senior analyst at Stanford Bernstein in Hong Kong, referring to the phablet that is closer in size to a tablet than a phone. The smartphone-tablet hybrid, a surprise hit in 2012, appeals to users who prefer larger screens to better access visual content. Samsung estimated its January-March overall operating profit rose 53 percent to $7.7 billion as mid-tier smartphones and sales in emerging markets helped it tide over the off-peak season. That marks the end of five straight quarters of record profits for the world's biggest technology firm by revenue. "We'll keep boosting our R&D spending, while marketing will be executed flexibly according to market conditions," a Samsung spokesman said on Friday. Ahead of Apple Apple ramped up its R&D expenditure to $3.38 billion in the year to September 2012, from just $712 million in 2006. Yet that is still far less than what Samsung spends. "Samsung keeps investing in R&D. They've boosted their smartphone R&D workforce to 25,000 or so from less than 20,000, and I think they have an exciting product lineup ready, probably in the second half, to upend the market," said Lee Do-hoon, an analyst at RBS.
  3. 3. That is a significant departure for a company which used to tear apart a Sony television in 1970s to reverse engineer rivals' products. Samsung finally overtook Sony to become the world's top TV maker in 2006, largely aided by slim designs and super-thin displays produced as a result of aggressive capital investment. By contrast, Samsung's mobile devices business now generates 70 percent of its total revenue. "The Note 3, which I expect to be available in the fourth quarter, will be quite innovative. It'll have a bended display and the screen size will be bigger without having a bigger phone," said RBS's Lee. "I think it'll be pretty cool." © Thomson Reuters 2013 How Samsung Became the World's No. 1 Smartphone Maker By Sam Grobart March 28, 2013 (In sixth paragraph, clarifies Samsung's sales numbers since Lee took control. In 17th paragraph, corrects transliteration of Lee Byung Chull and title of Lee Jae Yong.) Illustration by Thomas Traum
  4. 4. I’m in a black Mercedes-Benz (DAI:GR) van with three Samsung Electronics PR people heading toward Yongin, a city about 45 minutes south of Seoul. Yongin is South Korea’s Orlando: a nondescript, fast-growing city known for its tourist attractions, especially Everland Resort, the country’s largest theme park. But the van isn’t going to Everland. We’re headed to a far more profitable theme park: the Samsung Human Resources Development Center, where the theme just happens to be Samsung. The complex’s formal name is Changjo Kwan, which translates as Creativity Institute. It’s a massive structure with a traditional Korean roof, set in parklike surroundings. In a breezeway, a map carved in stone tiles divides the earth into two categories: countries where Samsung conducts business, indicated by blue lights; and countries where Samsung will conduct business, indicated by red. The map is mostly blue. In the lobby, an engraving in Korean and English proclaims: “We will devote our human resources and technology to create superior products and services, thereby contributing to a better global society.” Another sign says in English: “Go! Go! Go!” Photograph by Tony Law for Bloomberg BusinessweekSamsung’s Human Resources Development Center More than 50,000 employees pass through Changjo Kwan and its sister facilities in a given year. In sessions that last anywhere from a few days to several months, they are inculcated in all things Samsung: They learn about the three P’s (products, process, and people); they learn about “global management” so that Samsung can expand into new markets; some employees go through the exercise of making kimchi together, to learn about teamwork and Korean culture.
  5. 5. The success story of Apple’s App Store: five years and 900,000 apps June 13, 2013 by Dr. Nikola Bachfischer Five years, 900,000 apps and 50 billion downloads. Impressive benchmark data which Apple boss Cook quoted in his keynote speech for the iOS App Store at the annual developer conference WWDC. Commercially the App Store with 10 billion US$, which was paid by Apple to around six million registered developers, is also a great success. In 2012 it was just 5 billion US$ which clearly shows how fast the market is developing. Apple keeps 30% of the earnings from the App Store with 70% going to the developers. After Apple had opted for a very emotional approach in its most recent TV commercial, the company decided to follow this up with an unusually long and emotional video for its App Store. The positive effects of particular applications like Skyscape Medical Resources, Galileo, Cherokee Language or Proloquo2Go on the lives of its users were highlighted instead of simply advertising products and their various uses as is usual. They show that apps are not always concerned with shopping lists, vouchers or making life a little more comfortable for the average user. As remarkable as the video is however, parts of it are non-specific and rather too general: would anyone notice if the name Apple was replaced by Google? A very emotional Apple video: Making a Difference. One App at a Time Apple’s App Store vs. Google’s Play Store It is interesting to compare it with Google’s Play Store which overtook Apple in January with the number of apps and currently has 975,000 on offer. With this increasing market dominance, Google is putting Apple under more pressure than it would like. However, Google still lags far behind Apple as far as money earned is concerned. According to a current report by the analysts from Distimo, Apples App Store is still the store from which developers make the most turnover. According to Distimo, the 200 most successful apps in the App Store made around 5 million US$ per day in April while the 200 most successful Google Play apps only made around 1 million US$. However, Google is catching up with amount of turnover made by Apple with growth of eight per cent since November 2012. Conclusion: Mobile apps represent one of the most dynamic and successful distribution models of current times. It is clear that users integrate apps into their daily lives and no longer wish to do without them. Despite its five year success story, Apple is no longer the undisputed leader at the top. Google is continuing to put the market leader under more and more pressure. The battle for market shares in this billion dollar market is hotting up. With its rather unusual video, Apple is celebrating not just its success until now but also laying down its future claim to leadership.
  6. 6. Where Nokia Went Wrong Posted by James Surowiecki Nokia’s agreement on Tuesday to sell its handset business to Microsoft for $7.2 billion is something of a minor business coup for Nokia, since a year from now that business might well turn out to have been worth nothing. It also demonstrates just how far and fast Nokia has fallen in recent years. Not that long ago, it was the world’s dominant and pace-setting mobile-phone maker. Today, it has just three per cent of the global smartphone market, and its market cap is a fifth of what it was in 2007—even after rising more than thirty per cent on Tuesday. What happened to Nokia is no secret: Apple and Android crushed it. But the reasons for that failure are a bit more mysterious. Historically, after all, Nokia had been a surprisingly adaptive company, moving in and out of many different businesses—paper, electricity, rubber galoshes. Recently, it successfully reinvented itself again. For years, the company had been a conglomerate, with a number of disparate businesses operating under the Nokia umbrella; in the early nineteen-nineties, anticipating the rise of cell phones, executives got rid of everything but the telecom business. Even more strikingly, Nokia was hardly a technological laggard—on the contrary, it came up with its first smartphone back in 1996, and built a prototype of a touch- screen, Internet-enabled phone at the end of the nineties. It also spent enormous amounts of
  7. 7. money on research and development. What it was unable to do, though, was translate all that R. & D. spending into products that people actually wanted to buy. One way to explain this is to point out that Nokia was an engineering company that needed more marketing savvy. But this isn’t quite right; in the early aughts, Nokia was acclaimed for its marketing, and was seen as the company that had best figured out how to turn mobile phones into fashion accessories. It’s more accurate to say that Nokia was, at its heart, a hardware company rather than a software company—that is, its engineers were expert at building physical devices, but not the programs that make those devices work. In the end, the company profoundly underestimated the importance of software, including the apps that run on smartphones, to the experience of using a phone. Nokia’s development process was long dominated by hardware engineers; software experts were marginalized. (Executives at Apple, in stark contrast, saw hardware and software as equally important parts of a whole; they encouraged employees to work in multidisciplinary teams to design products.) It wasn’t just that Nokia failed to recognize the increasing importance of software, though. It also underestimated how important the transition to smartphones would be. And this was, in retrospect, a classic case of a company being enthralled (and, in a way, imprisoned) by its past success. Nokia was, after all, earning more than fifty per cent of all the profits in the mobile- phone industry in 2007, and most of those profits were not coming from smartphones. Diverting a lot of resources into a high-end, low-volume business (which is what the touch-screen smartphone business was in 2007) would have looked risky. In that sense, Nokia’s failure resulted at least in part from an institutional reluctance to transition into a new era. And there was another mistake. Nokia overestimated the strength of its brand, and believed that even if it was late to the smartphone game it would be able to catch up quickly. Long after the iPhone’s release, in fact, Nokia continued to insist that its superior hardware designs would win over users. Even today, there are people who claim that if Nokia had stuck with its own operating systems, instead of embracing the Windows Phone in 2011, it could have succeeded. But even though the Windows Phone has been a flop, the truth is that, by 2010, Nokia had already introduced too many disappointing phones, and its operating system had already proven too buggy, clunky, and unintuitive to win consumers over. In 2008, Nokia was said to have one of the most valuable brands in the world. But it failed to recognize that brands today aren’t as resilient as they once were. The high-tech era has taught people to expect constant innovation; when companies fall behind, consumers are quick to punish them. Late and inadequate: for Nokia, it was a deadly combination. Photograph: Angel Franco/The New York Times/Redux Technology & Media
  8. 8. The Fatal Mistake That Doomed BlackBerry BlackBerry failed to anticipate that consumers — not business customers — would drive the smartphone revolution By Sam Gustin @samgustinSept. 24, 201324 Comments • Read Later Mark Blinch / REUTERS A BlackBerry logo is seen at the BlackBerry campus in Waterloo, Canada, on Sept. 23, 2013 • Email • Print • Share • Comment Follow @TIMEBusiness Beleaguered gadgetmaker BlackBerry said on Monday that it’s signed a tentative agreement to be purchased by a group led by Canadian holding company Fairfax Financial in a $4.7 billion deal. The transaction, in which BlackBerry would become a private company, represents a turning point for a once high-flying tech giant that played a key role in the mobile-device revolution only to be eclipsed by Apple and Google. Fairfax, which already owns 10% of BlackBerry, will pay $9 per share for the company, about 3% more than its closing price on Friday. BlackBerry still has the flexibility to accept a better offer in a maneuver known as a “go-shop” process, but it’s hard to imagine that a sweeter overture will be forthcoming.
  9. 9. On Friday, BlackBerry announced that it would cut 4,500 jobs as it prepares to absorb nearly $1 billion in losses related to unsold-device inventory, sending its stock price plunging by 20%. Since last month, BlackBerry’s “special committee” has been evaluating strategic alternatives (like a sale) for the company. BlackBerry and Fairfax are expected to complete their due diligence by Nov. 4. By going private, BlackBerry (until recently known as Research in Motion) can continue to attempt a turnaround without the Wall Street pressure that accompanies public companies. (MORE: Why Apple vs. Google Is the Most Important Battle in Tech) “The special committee is seeking the best available outcome for the company’s constituents, including for shareholders,” Barbara Stymiest, chair of BlackBerry’s board of directors, said in a statement. “Importantly, the go-shop process provides an opportunity to determine if there are alternatives superior to the present proposal from the Fairfax consortium.” Prem Watsa, chairman and CEO of Fairfax, is often referred to as Canada’s Warren Buffett, the famed investor who runs the Omaha-based Berkshire Hathaway conglomerate. “We believe this transaction will open an exciting new private chapter for BlackBerry, its customers, carriers and employees,” Watsa said in a statement. “We can deliver immediate value to shareholders, while we continue the execution of a long-term strategy in a private company with a focus on delivering superior and secure enterprise solutions to BlackBerry customers around the world.” It may seem like a distant memory now, but just a few years ago BlackBerry was the premier mobile gadget on the market. The device was so ubiquitous on Wall Street and Capitol Hill that it earned the nickname CrackBerry. As recently as 2009, BlackBerry was named by Fortune magazine as the fastest growing company in the world, with earnings exploding by 84% a year. Times have changed. Since 2009, BlackBerry’s stock price has collapsed by a vertigo- inducing 90% to under $7 at its low point last summer. Today, BlackBerry has fallen to the back of the smartphone pack — with a minuscule 3% of the market — as Apple’s iPhone and Google’s Android operating system have come to dominate the market. BlackBerry’s decline has become a case study about what happens when a tech giant fails to innovate in a consumer-technology market evolving at breakneck speed. In a sign of the times, Apple said on Monday it sold a record 9 million units of its latest iPhone devices during the first weekend they were on sale. (MORE: BlackBerry CEO Could Face Testy Crowd at Annual Meeting) BlackBerry’s failure to keep up with Apple and Google was a consequence of errors in its strategy and vision. First, after growing to dominate the corporate market, BlackBerry failed to anticipate that consumers — not business customers — would drive the smartphone revolution. Second, BlackBerry was blindsided by the emergence of the “app economy,” which drove massive adoption of iPhone and Android-based devices. Third, BlackBerry failed to realize that smartphones would evolve beyond mere communication devices to become full-fledged mobile entertainment hubs.
  10. 10. BlackBerry insisted on producing phones with full keyboards, even after it became clear that many users preferred touchscreens, which allowed for better video viewing and touchscreen navigation. When BlackBerry finally did launch a touchscreen device, it was seen as a poor imitation of the iPhone. BlackBerry saw its devices as fancy, e-mail-enabled mobile phones. Apple and Google envisioned powerful mobile computers and worked to make sending e-mail and browsing the Web as consumer-friendly as possible. Founded in 1984 as a consulting business called Research in Motion in Waterloo, a suburb of Toronto, the company introduced its first BlackBerry device in 1999. For e-mail-obsessed Wall Streeters and other corporate users, it was a godsend. BlackBerry pioneered “push e-mail,” meaning that users simply received their messages when they were sent, instead of having to constantly check for new e-mails. BlackBerry’s QWERTY keyboard was like an epiphany: no more pecking at a numeric keypad to eke out messages. In the years that followed, the BlackBerry keyboard spawned a whole generation of dual-thumb e-mail warriors. As the BlackBerry exploded in popularity, especially among business customers, the company became Canada’s most valuable firm, leading some to dub Waterloo Canada’s Silicon Valley. But while BlackBerry was resting on its laurels atop the corporate mobile market, Apple and Google were laser-focused on the consumer market, which they correctly predicted would drive smartphone adoption. In January 2012, BlackBerry announced that its co-CEOs Jim Balsillie and Mike Lazaridis would step down and be replaced by Thorsten Heins, a German-born executive who joined the company in 2007. Nearly two years later, Heins has not yet been able to execute a turnaround. Sam Gustin @samgustin Read more: blackberry/#ixzz2fsqTTp1Z