Apologies if the reproduced tables are difficult to read, but I’ve hot linked the news article’s URL and I invite the curious reader to follow the link to The Korea Times web site.
This article provides and hides a good deal of insight into one of Korea’s leading corporations. The difficult-to-read tables are worth checking out below or online. But how the smartphones are lumped into one large product category defies the reader from getting a proper handle on much what this article focuses.
While the Koreans and Samsung Electronics genuinely have much to be proud, the two ongoing concerns remain. Namely, given the risks for leading edge products, the margins are pretty thin. But to be fair, in many ways, the leading edge products may be described to be as “improved upon ‘me, too’ products.”
That segues to the second concern: the lack of primary innovation. For Samsung Electronics to fully earn its respect among the Big Boys, it has to come out with a truly innovating product that creates a new product niche that forces others to emulate. If done successfully, including with effective marketing, truly innovative products make it possible for producers to charge more and gain larger margins. Otherwise, one has to compete on price as well as other factors such as quality and minor improvements on the basic concept.
So far, Korean companies have yet to achieve this kind of innovation. I suspect they will in time. But given the stiff competition from other developing Asian economies, the Koreans may be running out of less time than most people realize.
W2 mil. per share for Samsung Electronics myth or foresight?
The Korea Times
June 3, 2012