There are many industries where companies are beginning to focus their activities on the acquisition and protection side of their company’s intellectual property. Strategically many companies are realising that intellectual property is one of the most important parts that differentiates them as an individual organisation. The essay addresses the logic behind the focus on intellectual property and evaluates how this now impacts on industry and the firms involved within it.
The essay will focus on the mobile phone market with many companies having leading brands in the market. This industry is interesting to evaluate as it is very fast paced with many well-known companies engaging in patent ...view middle of the document...
With all this brilliant technology there has been a parallel increase in rivalry amongst industry players, which has led to patent wars or acquisitions between firms.
Industry Players Activities
The mobile phone industry has seen the fastest growth among other industries from the mid-90s it has almost increased tenfold. Due to the industry expanding globally many companies have wanted to be part of the action and have made it their main objective to enter the market. Many companies are aiming to establish themselves within the market, and become a recognised brand within mobile phone communication. However companies have started to use a more efficient method of creating and establishing themselves as a mobile phone company by the means of an acquisition. Microsoft and Nokia are good examples of this as Microsoft has just completed its acquisition of Nokia. (Microsoft, 2014) The CEO of Microsoft states that they had acquired Nokia as it will advance their transformation of their organisation by buying over their capabilities and assets (patents). The main objective of Microsoft performing this action was to expand their market share on the mobile phone market as their Windows phone is already achieving great heights within the mobile phone market and they plan on using Nokia’s mobile phone company to target the affordable mobile phone market. (Microsoft, 2014) To achieve a high position within the mobile phone market there has to be a large investment into Research and Development (R&D) of products.
The mobile phone market has seen a rise in the amount of money being invested to support R&D. Many companies spend large amounts on R&D to avoid being left behind. Companies believe that spending obscene amounts on innovation will benefit them in the long-run. (Chris P, 2013) Samsung has become the top spender on R&D in the mobile phone market with $10.4 billion being spent, which is 5.8% of its total revenue. (Chris P, 2013) Yet it has clearly been worth it, as it was reported in July 2013 that Samsung had become the world’s largest smartphone maker with Apple’s market share hitting a three year low. (Woollaston, 2013) Samsung’s success has been down to innovation and the protection of intellectual property combined with the tightening up of its operations with cost controls. (Woollaston, 2013)
Globally the industry has seen a wide array of opportunities arise down to innovation projects. However many companies are noticing an increase in sales among emerging markets as economies have seen a surge in mobile phone usage. By 2020 companies could see continued growth within the market if they manage to adapt mobile phones for the individual and workplace. Companies could see a shared value of almost $38 billion. (Keeble, 2013) Yet as emerging markets may be an opportunity to innovate something for the population’s price bracket, on the western side of the world there hasn’t been many new devices being created. In 2012 there...