Samsung Electronics Co. Ltd is a Korean multinational company, manufactures a wide range of product; includes computers, mobile phone, digital TVs, air conditioner, OLED panel, LCD display panel, memory and LSI system etc. The company's main growth driver engine is Smartphone business and Tablet, accounts 31.4 % and 20.4% respectively, of market share in 3Q2013 as per data from IDC. The main concern of company is that it totally depends on Smartphone and Tablet business. This business is getting volatile and overcrowded.
2. Business Overview
Samsung Electronics is engaged in three business units: Consumer Electronics, IT & Mobile communication and Device solutions. Consumer Electronics includes Visual Display Business, Digital Business Appliances, Printing Solution Business and Health & Medical Equipment Business. IT & Mobile Communication includes Mobile communication Business, Network Business and Digital Imaging Business. And Device Solutions includes Memory Business, System LSI Business and Led Business.
2a. Consumer Electronics
"Demand for consumer electronics products in emerging markets stemmed further sales losses but weak seasonality and a sluggish economy took their toll on Samsung’s sales of TVs and home appliances...The Display Panel segment faced a challenging quarter due to seasonally soft demand from set makers. However the introduction of new devices and increased shipments of smartphone display panels, prevented steeper losses."(Samsung, 2013)
2b. IT & Mobile Communications (IM)
"The IT & Mobile Communications (IM) Division which comprises the Mobile Communications, Networks, and Digital Imaging businesses, achieved profitable results backed by strong smartphone sales coupled with reduced marketing expenses...Sound sales of GALAXY S III and GALAXY Note II devices aided profit margins for Mobile Communications, but in the second quarter global demand for smartphones is forecast to dampen, compounded by heightened competition. The January-to-March quarter again proved trying on the PC business, while the Networks Business came around with a stable supply of Long Term Evolution (LTE), fourth-generation (4G) telecommunications equipment."(Samsung, 2013)
2c. Device Solution
"Global supply of PC DRAM remained weak, brought on by adjustments in the product mix by chipmakers opting to manufacture mobile and server DRAM over chips used in PCs. Samsung is looking to improve its profit margins with a differentiated product portfolio."(Samsung, 2013)
Company's performance is heavily relied on the performance of The IT & Mobile Communication (IM) Division, which is driver force for growth of both Consumer Electronics and Device Solution division. For survival and keep generating profit, should keep consolidating its position on smartphone and tablet segment.
3. Market Analysis
3a. Smartphone & Tablet Market and Samsung's Market share
According to International Data Corporation (IDC) worldwide quarterly...