SAMSUNG OVERSEES FURTHER PROFITS FROM SMARTPHONES’ SALES

According to the article taken from official online page of BBC News 
[ http://www.bbc.co.uk/news/business-19840040], posted on 5 October 2012, about profits that Samsung Company oversees from sales of smartphones, they expect further operating profits that is about 8.1 trillion won (about 7.3 billion US dollars), almost double 2011-year’s number.

Samsung is now one of the most desired Companies in the world these days due to its high performance smartphones. Samsung smartphones are one of the most advanced in high technology competing with Apple and HTC. According to global consumer ratings, the Samsung new Galaxy S3 has been ranked number one with the IPhone 4s taking the second position. This goes to show that Samsung has an edge when it comes to consumer demand and explains why there is such high competition between Samsung and IPhone. According to these estimates Samsung would be able to gain massive profits from its smartphones alone. The previous versions of the Galaxy smartphones have already shown how desired they are in the market going head on head on head with Apple’s IPhones. The advantage Samsung gets from the consumers is that the software Samsung uses for its smartphones is totally different from the one Apple uses. Samsung uses Android Software which is open source that means users can upgrade and download applications to Samsung totally free of cost where on the other hand Apple software is not open source and users have to pay for applications. This is another reason why Samsung is more in demand then its other competitors. There for Samsung should easily be able to produce massive profits from its smartphones in the near future. Most of the company’s profits were gained by sales of Smartphones; company makes semiconductors, screens and televisions as well. According to what Lee Sun-Tae, from NH Investment and Securities, said unexpected large sales of new Galaxy S3 and high-end models of televisions appear to have to have solid incomes in third quarter.

From other side, due to the impacts caused by Apple, Samsung would face a tremendous amount of loss resulting from the shortage to its smartphones sales in the United States as the court’s statement prohibits Samsung to make sales in the tri State area. To cover up the loss caused in the United States Samsung would have to increase its sales in various other countries and increase the demand for its Smartphones in other countries. Economically Samsung would also have to cut down some of its costs, which can be done in a number of ways most common being the reduction of its labor, or increasing the price it puts on its new products in countries where Samsung products have a high demand.  Samsung being a multinational company and one of the leading Smartphones manufacturers surely would have a lot of die heart Samsung fans who even after the ban on Samsung products would want to achieve its products. Samsung could take an advantage from this as in a country where its products are scarce now they can put a higher price to them as with high demand and a limited supply the price of the product can be increased. This economic strategy could help Samsung massively. 

This graph illustrates increase in demand and decrease in supply with a higher price.

Increasing sales in other parts of the world would still be one of the most prominent and effective options the company would have, In order to achieve this goal new market strategies and massive advertisement would play a decisive role in profit maximization as with increasing popularity the awareness of Samsung products would increase and consumers could prefer this brand.  Apart from this Samsung would still have to compete with Apple in other part of the worlds and in order to stand out from Apple, Samsung could introduce new technology to its products may it be in a shape of better specifications or enhanced physical features to make it appear more attractive to the eyes of the consumers. This shouldn’t be so difficult for Samsung as according to the consumers’ ratings Samsung’s new Galaxy S 3 is one of the most preferred users’ choices with Apple’s new IPhone 5 neck on neck! It is safe t say that the competition is fierce but with enforced pressure from the courts of the United States Apple would gain a clear advantage on Samsung in the States at least. 

To cover up, according to this study Samsung will face a massive demand reduction in the United States which would cause it a mountain of loss. Supply would be reduced in that area and would be focused in other parts where sales are not prohibited. 

                                                                                                     by Christina