The Impact of Internet on Mobile Phone Industry: Apple vs. Samsung

The Impact of Internet on Mobile Phone Industry: Apple vs. Samsung

Introduction

Internet is the fastest growing medium in the current business environment. Many organizations are able to gain benefits by using internet in order to achieve economies of scale by reaching new customers for the present products, new markets for the products and also able to launch new products in the market. Cellular based industry not only in US bit all over the world is becoming highly competitive as many rivals are entering the market and similarly some of them are able to exit from the market. The strongest rivals in the cellular industry are Apple and Samsung. Both of the mobile phone companies are able to give high competition to each other by launching products that have updated features and high usage of internet for the customers. The following research report will take into consideration the market and financial performance of both the organizations in order to find out that among these two companies which one is highly profitable and which organization has the greatest share in the market. On the other hand in order to analyze the financial performance data will be extracted from the financial statements and financial ratios of the firm during a period of last 5 years.

Samsung Market Overview

The financial performance of the two firms has highly been affected by the recent recession in US economy due to the financial crisis all over the world. Despite facing the recession and high competition Samsung was able to achieve sales at a record breaking amount. According to the annual report the company was able to generate 165 trillion revenues from their sales all over the world. The company was able to achieve a 16 trillion operating profit and the company during the last years was able to maintain a strong financial structure of the firm. The liability ratio of 32.1% and the capital adequacy ratio of 75.1% reflect the financial structure of the firm better than its rivals. The company last year was able to maintain a strong synergy between the set and component business units of the organization that help the firm in increasing their diversification of products and increase the market share in all parts of the world especially in their core business area of mobile phones. The company was using research and development methods in order to take their core business area to new heights. Organizations like Samsung have used internet to make smart phones a more useful cellular product for their customers. The launch of Galaxy II Smartphone has taken the firm's financial performances to the next level. The sellout ratio of Galaxy II of more than 10 million units in the year has enabled the firm in achieving the no.1 market share in the television advertising in US and in many other parts of the world. Samsung to fulfill its memory storage facility in the mobile phones the company has been able to ...