Samsung Presentation
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- 4. PopQuiz 1. WhatisthemeaningofthewordSamsung? 2. WhatisSamsung'scountryoforigin? 3.HowmanycompaniesisSamsungcomprisedof? 4. WhatwasthebusinessindustrySamsungwas involvedinwhenitwasfirstestablished?
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- 23. SamsungStock • ListedontheKoreanStockExchange(Ticker:SSNLF) • NotlistedonanyU.SExchange •EasiestwaytoinvestisthroughlocalSouthKorean broker,butaddedriskofpotentialcurrencyloss • Caninvestdirectlybyobtaininginvestorregistration fromSouthKoreaFinancialSupervisoryService • Marketcapof$180BcomparedtoApple’s$539Bmarket cap
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- 27. 23% 16% 7% 5%5% 44% Smart Phone IndustryMarket Share Samsung Apple Huawei Lenovo Xiaomi Others 2015MarketShare% 1. Samsung:23%MarketShare(premiumdevicesales) 2. Apple:16%MarketShare(premiumdevicesales) 3. Huawei:7%MarketShare(midrangetopremiumdevicesmainlyinEuropeandChina) 4. Lenovo:5%MarketShare(entryleveltomidrangedevicestoemergingmarkets) 5. Xiaomi:5%MarketShare(entryleveltomidrangedevicestoemergingmarkets)
- 28. 23% 16% 7% 5%5% 44% Smart Phone IndustryMarket Share Samsung Apple Huawei Lenovo Xiaomi Others 2015MarketShare% 1. Samsung:23%MarketShare(premiumdevicesales) 2. Apple:16%MarketShare(premiumdevicesales) 3. Huawei:7%MarketShare(midrangetopremiumdevicesmainlyinEuropeandChina) 4. Lenovo:5%MarketShare(entryleveltomidrangedevicestoemergingmarkets) 5. Xiaomi:5%MarketShare(entryleveltomidrangedevicestoemergingmarkets)
- 29. 2015MarketShare% 1. Samsung:23%MarketShare(premiumdevicesales) 2. Apple:16%MarketShare(premiumdevicesales) 3.Huawei:7%MarketShare(midrangetopremiumdevicesmainlyinEuropeandChina) 4. Lenovo:5%MarketShare(entryleveltomidrangedevicestoemergingmarkets) 5. Xiaomi:5%MarketShare(entryleveltomidrangedevicestoemergingmarkets) 23% 16% 7% 5%5% 44% Smart Phone Industry Market Share Samsung Apple Huawei Lenovo Xiaomi Others
- 30. ImportanceofLoyalCustomers • In2015,89%ofnewcellphonesaleswereidentifiedasreplacementphones • By2019,replacementphonesareforecastedat94%oftotalsales •Only6%ofcellphonesaleswouldthenbeattributedtonewcellphonecustomers • Increasinglyimportanttoretaincustomersandcreatebrandloyalty • Providersneedtoprovidenewesttechnologytocustomerstoreducereplacementtimeperiod
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- 36. Price SkimmingPrice • Highinitialprice • Maximumrevenue •Decreasesascompetitorsoffersimilar products/features CompetitivePrice • Similarpriceascompetitors • Lowprice/highquantity
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- 41. Customer/TargetMarketAnalysis MarketSegments • Teenagers • BusinessCustomers •ExistingUsers • FormeriPhoneUsers By2017–1/3oftheworld’spopulationwillownasmartphone! That’snearly2.6BILLIONsmartphoneusers!!
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- 53. •74.8millionunitsshipped • 20.2%growthfromthe192.7millionunitsshippedin 2014. • ApplePay •betterperformance • increasedspeed • ScreenSize 2015
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- 61. Mi1 •MIUIFirmware •Resembles • iPhone • Android •2O11 •iPhone-$770 • Mi1-$324
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- 69. Political • WarwithNorthKorea • Completeshutdown •Restrictionoftradelanes • EconomicDemocratization • Unionization • ForeignPolicies • ImportTradeLaws Philp Yun, a former senior member of the U.S. delegation IfNorthKoreaattackedSouthKorea,it couldbecrippling.Ifinfactsomethinglike thatdidhappenitwouldbedevastatingto theglobaleconomy.
- 70. Economic • Koreancurrency • Majorsourceofprofitlost •25%decreasequarterlyprofits (2014) • Globalrecession • 3Q07’to 3Q08’dropped50%or 1.05trillionwoninprofit
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- 72. Social •Risingtrendof“distracteddrivers” •TheNationalSafetyCouncilhasreportedthat1.6 millioncrashesarecausedbyphoneuseeveryyear. • Everyday,11teenagersdiebecausetheyweretextingwhile driving. • 37,000+peopledieinautomobilecrashesintheU.Severyyear •Withthesekindsofalarmingstatisticslitigationonmobilephone orserviceprovidersishighlypossible.
- 73. Technological •SmartPhoneSaturation •Peripherals • Gateway/Remote • IoT •GoogleNest • SamsungSmartThings • WhathappenstotheSmartphonewheneverydevicearound youis“smart”? SamsungMobilePresidentDongjinKoh “Forthefirsttimeinhistory, therearemore devicesontheInternetthantherearepeople”
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- 78. Vision2020 QuantitativeGoals: • $400BinSales • #1GlobalITCompany •GlobalTop5Company QualitativeGoals: • InnovativeCompany • Top10BestWorkplace • Creativeleaderbuildingnewmarkets • Attractworld’sbesttalent 78
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- 80. $115B $400B $193B $169B 0 50 100 150 200 250 300 350 400 450 2009 2010 20112012 2013 2014 2015 2016 2017 2018 2019 2020 USD($billions) SamsungElectronicsAnnualRevenue 2020RevenueGoal 80 Source:SamsungElectronicsAnnualReports;assumes1.00USD=1,187.84KRW Revenue Gap:$131B
- 81. $96B $227B $0B $100B $200B $300B $400B $500B 2015 2020 (Projected) Overall GlobalSmartphone Market Revenue Samsung Competitors Wherewilltheadditionalrevenuecomefrom? 81 Current Share:23% Required Share:50% $131B $425B $455B
- 82. 0% 10% 20% 30% 40% 50% Q2 Q3 Q4Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2012 2013 2014 2015 MarketShare(%) WorldwideSmartphoneMarketShare (ShareinUnitShipments) Samsung Apple Huawei Xiaomi Lenovo Others Is50%marketsharerealistic? 82 Historicalmaximum:33%
- 83. Saturationofsmartphonemarket 83 49% 56% 65% 73% 76% 83% 85%88% 89% 86% 91% 89% 91% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 ReplacementShare MillionsofHandsets Year CellularHandsetsSoldtoExistingSubscribers NewPhonesSoldtoExistingSubscribers %ofNewPhonesSoldtoExistingSubscribers
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- 103. VR/ARmarketforecast($B) 103 0 20 40 60 80 100 120 140 160 2016F 2017F 2018F2019F 2020F Billions$ AugmentedReality VirtualReality Source:Digi-Capital
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Editor's Notes
- #5 1. Three Stars 2. Dried Fish Exporter 3. 78 affiliates 4. All of the products were made by Samsung
- #33 Televisions – LED, Smart TV’s, Ultra High Definition (UHD) and Smart Signage Wearable Tech – Smart Watches and Virtual Reality Headsets Home Appliances – Washers and Dryers, Refrigerators, Microwaves, Dishwashers, Ranges and Vacuums Smart Home – Home Montoring Kits, Hubs, Sensors and Smart Outlets Home Theater and Audio – Wireless Multi-room Audio, Soundbars, Giga Sound Systems, Home Theater Systems, Blu-Ray Players and DVD Players Digital Cameras and Camcorders – Interchangeable Lenses, Cameras and Camcorders Computing – Laptops, All-in-one PC’s, Chrome Devices, Monitors and Printers Memory and Storage – Solid State Drives, Portable SSD’s, Memory Cards and USB Drives LED Lighting – Energy efficient home lighting bulbs and related products Security and Monitoring – Internet Protocol (IP) Cameras, Security Systems and Baby Monitors Accessories – for nearly all categories of their products
- #53 these prices put the new iPhones among the most expensive smartphones on the market
- #54 Apple hit a new high with 74.8 million units shipped, albeit just 0.3 million more than the same quarter one year ago. Continued demand for Apple's iPhone 6S and 6S Plus, particularly in China and the U.S., elevated Apple in 2015 to 231.5 million units shipped in the year. This represents 20.2% growth from the 192.7 million units shipped in 2014. The combination of new innovative features such as Apple Pay and Force Touch, combined with a new Rose Gold color, better performance, and increased speed, helped drive upgrades and attracted Android switchers in record numbers.
- #56 Huawei also gained a key contract to build the first national telecommunications network for the People's Liberation Army The Chinese People's Liberation Army (PLA; Chinese: 中国人民解放军) is the armed forces of thePeople's Republic of China and the Communist Party of China small in terms of our overall business, but large in terms of our relationships In the US, Huawei has been challenged due to concerns of United States security officials that Huawei-made telecommunications equipment is designed to allow unauthorized access by the Chinese government and the Chinese People's Liberation Army,[168][169][170][171] given that Ren Zhengfei, the founder of the company, served as an engineer in the army in the early 1980s.[172] In the United Kingdom, the Conservative Party raised concerns about security over Huawei’s bid for Marconi in 2005,[170] and the company's equipment was mentioned as an alleged potential threat in a 2009 government briefing by Alex Allan, chairman of the Joint Intelligence Committee.[173] In December 2010, Huawei opened a Cyber Security Evaluation Centre to test its hardware and software to ensure they can withstand growing cyber security threats.[174][175] In the U.S., some members of Congress raised questions about the company's proposed merger with communications company 3Com in 2008,[176] and its bid for a Sprint contract in 2010.[172] In addition, Huawei withdrew its purchase of 3Leaf systems in 2010, following a review by the U.S. Committee on Foreign Investment (CFIUS).[169]
- #58 It was founded in 1987 by a former engineer in People’s Liberation Army. It has 21 R&D institutes all over the world. Huawei surpassed Xiaomi in the smartphone market. Huawei’s Smartphone shipments grew by 27% whereas the overall mobile phone shipments grew by 21%. One of its brand, Honor brand is yielding good results for Huawei with a presence in more than 60 countries around the globe. Honor brand has given successful entry into emerging economies like India where traditionally it was not strong whereas other brand Ascend is doing well in Middle East Africa and Europe. North America remains a weak spot for Huawei whereas Latin America has been strong especially, Mexico, Columbia and others. Apart from this Honor brand has managed to gain significant share in mid to high end smartphone segment, a segment which was traditionally a weak spot for Huawei. Going forward it will continue to leverage the momentum by launching more flagships in various geographies along with its online only business model in some of the regions. Huawei has shifted focus towards profitability and streamlining portfolio with mid-to premium tier models rather than focusing on lower price models and aims to ship 100 million smartphones in 2015.
- #61 The company has over 8,000 employees, mainly in mainland China, Malaysia,[12] andSingapore, and is expanding to other countries such as India,[13] Indonesia, the Philippines and Brazil.[14][15]
- #63 Sell Products slighly above their manufacturing costs In practice, Xiaomi's product managers spend a lot of time browsing through the company's user forums. Once a suggestion is picked up, it is quickly transferred to the engineers. Therefore, features can turn from mere concept to shipping products within a week. The company then ships a new batch of phones out every week on Tuesday at noon Beijing time, containing the new software builds and possible minor hardware tweaks. Xiaomi calls this process "design as you build."
- #64 Whether or not you can actually get your hands on a Xiaomi phone is another matter. When the Mi 3 initially went on sale last October, the first batch of 100,000 units sold out in less than two minutes. It would be another seven days before the company made available another 100,000 more units, which were then immediately sold out again.
- #65 Releasing only a limited quantity of phones each week has been a staple of Xiaomi’s business that’s helped keep costs down. The company faces less risk by managing a smaller inventory. It also lets Xiaomi gradually ramp up production as component costs decline over time.
- #66 But the obvious drawback is that eager consumers have to wait, which may result in lost sales. Last year, the company’s Hongmi phone received 7.4 million pre-orders after the device had been announced, despite the limited supplies.
- #68 Samsung does not operate within a bubble. There are forces that act upon every company, whether positively or negatively, from external sources. These sources are usually grouped into six areas: Political, Economic, Social, Technological, Legal, and Environmental. I’m going to dive into these six areas to some degree and discuss how they could impact Samsung.
- #72 This is a big reason for the explosion in smartphone adoption in developing worlds over the last 8 years. According to this study, a smartphone has the power to improve lives by providing information to areas where landlines and the Internet is not available. Phones have also created a micro enterprise for selling, repairing and refurbishing phones.
- #73 In other words 1 out of every 4 car accidents in the U.S are caused by texting and driving Every 20 seconds there is an accident involving a cell phone in the US. By the end of this presentation there will have been 180 car accidents, More than 2 people will have died in a car accident, one of which had a cell phone involved. And by the end of our class more than 1 teenager will have died due to texting while driving. Safer to drive drunk then you are to text and drive. http://www.icebike.org/texting-and-driving/
- #80 At $400B, Samsung would be larger than the GDP of 87% of all countries in the world. (Example, larger than Austria, Norway, UAE, South Africa, etc.)
- #81 Ambitious goal set in 2009 to grow revenue to $400B On track to meet goal through 2013 Recent decrease in revenue in 2014 & 2015 due to increased competition from low-end competitors, increased success of Apple iPhone 6/6S in premium segment Current revenue gap is $131B in order to reach goal
- #82 Question: Can Samsung generate $131B in additional revenue in the smartphone market alone? Answer: Technically, yes. But it is very unlikely. Will require them to double market share to 50% Overall smartphone market expected to grow $30B Conclusion: Need to BOTH grow market share and find new sources of revenue
- #83 Likely no… Conclusion: Need to BOTH grow market share and find new sources of revenue
- #84 91% of new smartphones went to existing smartphone users Need to focus on retaining customers and finding new ones Is this US or global?
- #85 1) Market Share Growth: Increase Brand Loyalty through Brand Marketing Mobile Ecosystem Development 2) Create New Sources of Revenue: Internet-of-Things Virtual Reality / Augmented Reality
- #86 Smartphones will be a gateway to other markets If you want to create the future, you need to seek radical innovation Will use next few slides to talk about where we believe Samsung should invest resources
- #87 Simply put, this is the concept of basically connecting any device with an on and off switch to the Internet (and/or to each other). This includes everything from cellphones, coffee makers, washing machines, headphones, lamps, wearable devices and almost anything else you can think of 3rd revolution of the internet
- #91 Security / Safety systems Heating / AC Lighting Appliances Entertainment
- #99 Goal: Speed adoption Focus marketing messages on the “Why” Example: Increase efficiency / reduce energy Example: Easy to order food instead of size of touch screen on Family Hub refrigerator Focus on Home Energy / Home Security Products Lower cost items Make set up / integration easy Seek to control operating system / user experience (Tizen) Link more devices automatically E.g. Goodnight modes that turn off lights, set thermostats, set security systems, etc. Affordable price options
- #100 Smartphones will be a gateway to other markets If you want to create the future, you need to seek radical innovation Will use next few slides to talk about where we believe Samsung should invest resources
- #102 Key Points: VR / AR can change the way people interact with each other VR / AR is a potential disruptive technology to Samsung screens; they need to stay out in front of the technology
- #104 http://www.digi-capital.com/news/2015/04/augmentedvirtual-reality-to-hit-150-billion-disrupting-mobile-by-2020/#.VyfM0YQrJD8