Samsung’s announcement of a 7 billion dollar quarterly profit yesterday tops off a big 2012 for the Korean electronic manufacturer in which they became the world’s biggest mobile phone manufacturer after overtaking Nokia’s sales.
Android phones have been the great success for Samsung as other providers, including Google, have been comparatively slow to offer devices which give telcos the opportunity to claw back some margins they’ve been giving away to Apple over the last few year.
Despite these successes Samsung have a number of challenges ahead in 2013.
The biggest challenge is channel conflict with Google and Motorola working on launching an X-Phone which they hope will compete against both the iPhone and Samsung products
Channel conflict was always going to be a problem for handset manufacturers using the Android operating system when Google bought Motorola Mobility and now we’re seeing the effects of this.
The Koreans aren’t taking Google’s threat lying down having joined with Japanese manufacturers in a joint venture to develop a Linux based operating system for smartphones and Samsung expects to release Tizen equipped phones later in 2013.
Just on its own, the conflict with Google would be a problem for Samsung but the ongoing fights with Apple over tablet and smartphone patents continues to be a management distraction as well.
Apple’s relationship with the Korean conglomerate is a classic case of co-dependency as Samsung supply the bulk of the processors used in the iPad and iPhone. While Apple may want to kill the Samsung Galaxy tablet range, they have to be careful about going too far with a key supplier.
On the Asymco blog James Allworth wonders if Apple’s announcement to bring some manufacturing back to the US may be part of a strategy to deal with the company’s dependence upon Samsung.
With threats from ‘frenemies’ like Apple and Google one of best defenses Samsung has is the companies varied range of products along with its willingness to strike out on its own into customers’ markets.
At the Computer Electronics Show in Las Vegas, Samsung showed off its range of OLED TVs, laptops and other equipment alongside smartphones. That breadth of product frees the company from being locked into one or two markets.
Of course the best example of such an electronics conglomerate in the past was Japan’s Sony which is now truly lost and wandering in the business wilderness.
Whether Samsung can avoid Sony’s mistakes will be worth watching over the next few years, for Apple and Google it may determine who is the biggest competitor in the 2020s.