20501034 - entry 9

'Why Samsung and LG Scare Motorola'
by Moon, BusinessWeek's Seoul bureau chief.
BusinessWeek(http://www.businessweek.com/globalbiz/content/apr2008/gb20080430_178487_page_2.htm) 2008. 5. 1

Summary

Last year, Samsung Electronics passed Motolola to become the world's No. 2 player in the cell phone industry. Now Motorola is in real danger of being overtaken" by LG Electronics. Samsung and LG are accounts for 44% of cell phone sales.

One of the reasons that Samsung and LG is dominating the markting is the Korean’s capability to bring out bunch of stylish products incorporating new technologies. As an example, Samsung brought 30 new multimedia models in the 2nd quarter of this year.

Another reason Samsung and LG being so successful is iPhone. Samsung and LG’s star product, touch screen interface and multimedia device, was basically shown in the iPhone. While iPhone took 0.6~0.7% share of market due to expensive price, Samsung and LG imitated very fast and manufactured touch screen interface phone with cheap price.

My opinion

First of all, I have to say Samsung and LG read latest trend well. In the book, ‘Microtrend’, the author Pinn pointed that in our age, there are many different kinds of demands which should be satisfied. Just 10 years ago, we are very used to hear mega bit hit product. Whole people in nation were excited in just one product. (ex. Ice cream, bag, song and etc) In that age, people have similar tastes and they faithfully followed the what others do or buy. However, in out age, everybody wants to be treated differently. They even hate to wear same cloth with other people. They want to be distinguished from anonymous people. So I can say what they value is more like individual characteristic now.
In this sense, Samsung seemed to find various kinds of customer’s needs. According to customer’s needs, Samsung made 30 different kinds of cell phone and satisfy each demographics.

I think what Samsung and LG did better than others is they radically reduced the time which is consumed to absorb newest technologies from pioneer company, Apple. Apple suggested touch screen style cell phone with iPhone. Samsung and LG realized that it would be the next trend of cell phone. They moved very fast quickly adopted it. In this way, Samsung and LG could minimized the R&D cost in comparison with Apple and even beat the Apple. It will be key factor how Samsung and LG keep reducing the time to absorb new technology from competitors and have their own competitive edge which is hard to get by other companies.