APPLE VS SAMSUNG: COMPETITIVE DYNAMICS

ABSTRACT
This case flyer, based on the article1 from The Economic Times, can be used to understand how a competitive
strategy is played out between two of the biggest players in an industry the smartphone industry and how the
industrys competitive dynamics are shaped with several disruptions from other players. Is it a proverbial tale of
two elephants fighting and the resultant crushed grass, between Apple and Samsung, with Motorola, Nokia,
Blackberry, HTC, etc., being near irrelevant in the mobile phone industry? When Apple launched its iPhone in
2007, it set in motion a new category, the smartphones with futuristic, customer-friendly technology and a new
ecosystem of inclusive suppliers. However, since 2010, Samsungs share of the smartphone market zoomed to
31% past Apples 15%. Often referred to as two-horse race about the competition between Apple and Samsung,
the duopoly has rewritten the rules of competition in smartphone industry. While value-driven Apples market
share (in terms of handsets shipped to the distributors) is lesser, the margins are industry-highest. The
Volume-driven Samsungs market share is highest (at 21% in Q2, 2015) while its margins are way below Apples.
However, with Apples iPhone 6, Apple is expected to regain the lost ground. Can iPhone 6 reverse the market
share trend in favor of Apple? With four important and key trends in smartphone industry rise of 4G, growing
appetite for larger screens, increasing demand from emerging markets and rise in demand for cheaper handsets
how would the competition in smartphone industry pan out in the future?

Pedagogical Objectives

To understand the nature and business dynamics of smartphone industry and debate on the critical success
factors

To examine the competitive strategy between Apple and Samsung in being the market leader and debate on
the relevance of value and volume dynamics in the smartphone industry

To discuss and debate on the strategic insights from smartphone industrys competitive dynamics, i.e., how
structure gets shaped up by (a firms or firms) strategy, and relevance of technology S-Curves

Case Positioning and Setting

This case flyer can be used in an MBA Program for Business/Corporate Strategy for either of the following
concepts/theoretical constructs/discussion modules:

Industry Analysis How smartphone industrys competitive dynamics are shaped up largely by two dominant
players and with low entry barriers and easily accessible operating systems, innovations, etc., have altered the
smartphone industrys landscape

Firms Strategy How a focused and clearly positioned strategy can create an unique position

Strategy vs Structure To debate on whether structure shapes the strategy or whether strategy can shape the
structure
6 Reasons Why Samsung Should Fear The iPhone 6, The Economic Times, September 6th 2014, page 6
www.etcases.com