There are three key elements to Samsung’s success globally. First, it has laid out a roadmap, a vision and a desire to be the No. 1. Second, they have the advantage of playing across microprocessors, memory, components, displays and other technologies which gives them an advantage over others. This enables Samsung to push the envelope on their devices. Today, even Samsung’s own competitors like Apple source key components like display and flash memory from Samsung.
And third, they manufacture all their products—this gives them a lot of cost advantage and allows innovation. For example, the ability to have a large screen size for the Galaxy S3 and still make it less power-hungry comes from being present in many different component sectors and being able to manufacture it on its own. This is not the case with others like Apple, who outsource manufacturing a lot.
Samsung also has an Asian approach to innovation which the Japanese were following earlier and now the Koreans are practising. Under this, they manufacture hundreds of products across various price lines—so vastly different from Apple’s approach of launching one blockbuster product led by a breakthrough design. They have pursued a fast follower strategy and no matter what price point, they have a product there. It’s innovation of a different kind.
Jayant Sinha, MD, Omidyar Network India
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