A comparative study between Apple and Samsung

THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI

Page 1

“A STUDY ON PRICING STRATEGIES OF SAMSUNG AND APPLE”
PROJECT SUBMITTED TO:
UNIVERSITY OF MUMBAI
FOR THE
BACHELOR OF MANAGEMENT STUDIES
SEMESTER 5
SUBMITTED BY:
“VIVEK SHAH”
NOVEMBER 2014


Page 2

EXECUTIVE SUMMARY
The Apple brand and logo are currently more recognized around the Western world, and in
London and New York, you cannot walk down the street without seeing a sea of white
headphones and people playing with their iPhones. The Brand Finance Global 500 2013 puts
Apple and Samsung right at the very top of the best brands in the world, ahead of Coca-Cola and
Google.
Samsung smartphones are broadly comparable, feature-for-feature, with competitors like HTC,
Sony, LG and now Nokia, so why has it become so dominant? A big part of the answer lies in its
sheer marketing muscle – Samsung spends a bigger chunk of its annual revenue on advertising
and promotion than any other of the world's top-20 companies by sales – 5.4%, according to
Thomson Reuters data. Apple spends just 0.6%, and General Motors 3.5%.
Adverts mocking Apple fans, and heavy investment in product placement and in distribution
channels have strengthened its Galaxy mobile brand. Samsung now sells one in every three
smartphones and has more than double Apple’s market share.
Moon Ji-hun, head of brand consultant Interbrand's Korean operation, adds: “When your brand
doesn't have a clear identity, as is the case with Samsung, to keep spending is probably the best
strategy. But maintaining marketing spend at that level in the longer term wouldn't bring much
more benefit. No one can beat Samsung in terms of ad presence, and I doubt whether keeping
investing at this level is effective.”
Apple may sit in top position now, but has lost its mojo over the last couple of years through
lackluster product releases and perceived lack of innovation. Samsung is catching up and is
already no. 2. The Samsung brand can be improved and it isn’t loved by some like Apple, but I
am impressed with the leadership team for seizing the opportunity to leapfrog all its other
competitors, through investment and execution with conviction.


Page 3

TABLE OF CONTENTS
CHAPTER
NUMBER
CONTENTS PAGE
NUMBER
I INTRODUTION 8-11
II REVIEW OF LITERATURE 12-16
III RESEARCH METHODOLOGY 17-21
3.1 FORMULATION OF RESEARCH PROBLEM 17
3.2 OBJECTIVE OF STUDY 17
3.3 SCOPE OF STUDY 17-18
3.4 HYPOTHESIS 18
3.5 DATA COLLECTION 19
3.6 RESEARCH INSTRUMENT 19
3.7 RESEARCH DESIGN 19
3.8 SAMPLING PLAN/SAMPLING TECHNIQUE 20
3.9 TESTING OF HYPOTHESIS 20
3.10 RESEARCH LIMITATION 21
IV PRICING STRATEGY OF APPLE AND SAMSUNG 22-28
V THE GADGET WARS 29-30
VI DATA ANALYSIS AND INTERPRETATION 31-42


Page 4

VII TESTING HYPOTHESIS WITH THE HELP OF CHI
SQUARE
43-55
VIII CONCLUSION 56
IX RECOMMENDATION 57
X BIBLIOGRAPHY 58
ANNEXURE 59-64


Page 5

Chapter I – Introduction
Samsung and Apple are the two biggest smartphone companies with a combined market share of
more than half the global smartphone market. Every year both the companies bring in new
innovations in their smartphones, which greatly increases their smartphone sales. But in today’s
market where there is cut throat competition it is given that each company will try to outdo the
other in every possible manner. Hence I would like to discuss the fierce battle raging between
these smartphone giants-Samsung and Apple. Apple created a boom in the smartphone market by
launching the iPhone, which had more features and was the most advanced smartphone at that
time. The company made a huge profit and Apple became a household favorite. But with the rise
of competition and the growth of Asian giant –Samsung, Apple’s success was not to last forever.
Samsung came up with the Samsung Galaxy S smartphone with identical features as that of the
iPhone and slowly but steadily the sales of Samsung smartphones rose.
ABOUT APPLE:
Apple Inc. is an American multinational corporation headquartered in Cupertino, California, that
designs, develops, and sells consumer electronics, computer software and personal computers. Its
best-known hardware products are the Mac line of computers, the iPod media player,
the iPhone smartphone, and the iPad tablet computer. Its consumer software includes the OS
X and iOS operating systems, the iTunes media browser, the Safari web browser, and
the iLife and iWork creativity and productivity suites.
Apple was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne on April 1, 1976 to
develop and sell personal computers. It was incorporated as Apple Computer, Inc. on January 3,
1977, and was renamed as Apple Inc. on January 9, 2007 to reflect its shifted focus
towards consumer electronics.
Apple is the world's second-largest information technology company by revenue after Samsung
Electronics, and the world's third-largest mobile phone
maker after Samsung and Nokia. Fortune magazine named Apple the most admired company in
the United States in 2008, and in the world from 2008 to 2012. On September 30, 2013, Apple
surpassed Coca-Cola to become the world's most valuable brand in the Omnicom Group's "Best
Global Brands" report. However, the company has received criticism for its contractors' labor
practices, and for Apple's own environmental and business practices.
As of May 2013, Apple maintains 408 retail stores in fourteen countries as well as the
online Apple Store and iTunes Store, the latter of which is the world's largest music
retailer. Apple is the largest publicly traded corporation in the world by market capitalization,
with an estimated market capitalization of $446 billion by January, 2014. As of September 29,
2012, the company had 72,800 permanent full-time employees and 3,300 temporary full-time
employees worldwide. Its worldwide annual revenue in 2013 totalled $170 billion. As of Q1


Page 6

2014, Apple's five-year growth average is 39% for top line growth and 45% for bottom
line growth. In May 2013, Apple entered the top ten of the Fortune 500 list of companies for the
first time, rising 11 places above its 2012 ranking to take the sixth position. Apple is the most
successful start up company of all time, by market capitalization, revenue, and growth.
APPLE PRODUCTS:
§ Mac Books
§ iPads
§ iPhones
§ iPods
§ iMac
§ Apple TV
§ Softwares


Page 7

ABOUT SAMSUNG:
Samsung Group is a South Korean multinational conglomerate company headquartered
in Samsung Town, Seoul. It comprises numerous subsidiaries and affiliated businesses, most of
them united under the Samsung brand, and are the largest South Korean chaebol (business
conglomerate).
Samsung was founded by Lee Byung-chul in 1938 as a trading company. Over the next three
decades the group diversified into areas including food processing, textiles, insurance, securities
and retail. Samsung entered the electronics industry in the late 1960s and the construction and
shipbuilding industries in the mid-1970s; these areas would drive its subsequent growth.
Following Lee's death in 1987, Samsung was separated into four business groups – Samsung
Group, Shinsegae Group, CJ Group and Hansol Group. Since the 1990s Samsung has
increasingly globalized its activities, and electronics, particularly mobile phones and
semiconductors, have become its most important source of income.
Notable Samsung industrial subsidiaries include Samsung Electronics (the world's largest
information technology company measured by 2012 revenues, and 4th in market
value), Samsung Heavy Industries (the world's 2nd-largest shipbuilder measured by 2010
revenues), and Samsung Engineering and Samsung C&T (respectively the world's 13th and 36th-
largest construction companies). Other notable subsidiaries includeSamsung Life Insurance (the
world's 14th-largest life insurance company), Samsung Everland (operator of Everland Resort,
the oldest theme park in South Korea), Samsung Techwin (an aerospace, surveillance and
defense company) and Cheil Worldwide (the world's 15th-largest advertising agency measured
by 2012 revenues).


Page 8

Samsung has a powerful influence on South Korea's economic development, politics, media and
culture, and has been a major driving force behind the "Miracle on the Han River". Its affiliate
companies produce around a fifth of South Korea's total exports. Samsung's revenue was equal to
17% of South Korea's $1,082 billion GDP.
In 2013, Samsung began construction on building the world's largest mobile phone factory in the
Thai Nguyen province of Vietnam.
SAMSUNG PRODUCTS:
Ø Samsung Phones
Ø Samsung Notes
Ø Samsung Laptops
Ø Samsung Desktops
Ø Samsung Softwares


Page 9

Chapter II – REVIEW OF LITERATURE
CASE 1:
A new survey conducted by Consumer Intelligence Research Partner (CIRP) suggests that of
Apple's iPhone customers between July 2012 and June 2013, an impressive 42% of them were
upgrading from a previous iPhone. Better still, it compares Apple to Samsung, and shows that
only 7% of Samsung's mobile customers moved across from using an iPhone. The key stats as
presented to Fortune:
• 42% of Apple's customers between July 2012 and June 2013 were upgrading from
another iPhone
• 43% of Samsung's customers had previously owned an Android phone, but not
necessarily one made by Samsung
• Samsung drew more first-time smartphone buyers upgrading from so-called feature
phones (37%) than Apple did (26%)
• Among buyers who switched brands, Apple took three times as many from Samsung
(33%) as Samsung took from Apple (11%)
• Among switchers, Samsung drew more customers from HTC, Motorola (GOOG), and
Nokia (NOK), while Apple drew more from Blackberry (BBRY)
All interesting factoids, and there's many a discussion we could have about each of them. It's
interesting to see that Apple commands a greater share of the BlackBerry switchers, perhaps
more comfortable with the stable environment and the ecosystem that Apple provides, and is
more like the BlackBerry they know than what Samsung is serving up.
Also good news for Apple is that their brand loyalty continues to be pretty high. Attracting new
customers is always on the list, but you have to retain the ones you already have to stand any
chance. The survey doesn't differentiate which of the Samsung customers came from another
Samsung phone, just Android, so while their retention figures match Apples, it doesn't mean they
as a brand are keeping as many of their customers as Apple does. Apple also took a good chunk
more Samsung customers than Samsung did Apple customers.


Page
10

CASE 2:
NEW YORK, Nov. 2 (UPI) -- A customer satisfaction poll ranked tablets made by Korean
electronics giant Samsung ahead of Apple's iPad but some tech analysts are questioning the
finding.
The JD Power biannual customer satisfaction poll gave Samsung tablets 835 points, while Apple
tablets got a score of 833, CNN reported Saturday.
Some were baffled at the result, given Apple's iPad scored higher than Samsung in four out of
five categories, losing out in only one -- cost.
CASE 3:
A recent Counterpoint survey of October smartphone sales in 33 countries—including China—
showed the Cupertino-based company's latest flagship, the iPhone 5S, dominated rival
Samsung's Galaxy S4. Apple was able to put not one, but two smartphones ahead of the S4, as
the chart-leading 5S was also followed by its predecessor, the iPhone 5. The data was compiled
from surveys of both distributors and several major retailers across 33 countries, according
to SlashGear.
The top ten smartphones list:
1.) iPhone 5S
2.) iPhone 5
3.) Galaxy S4
4.) iPhone 5C
5.) Galaxy Note 3
6.) Galaxy S3
7.) Galaxy S4 Mini
8.) Nokia 105
9.) Galaxy S3 Mini
10.) Asha 501


Page
11

CASE 4:
Apple's flagship iPhone 5S, already draped in gold, has been voted the winning smartphone of
2013, taking home 27.64% of the 9,004 u Switch Tech users that participated in the poll. The
Samsung Galaxy S4 finished in a close second with 25.21% of the total votes, followed by the
new Samsung Galaxy Note 3, which finished with just 11.78% of the votes. The highly-praised
HTC One managed to finish fourth at 11.26% despite being named the 2013 u Switch Tech
Awards winner for best design. Apple's iPhone 5C finished just eighth. Below are the full u
Switch Tech smartphone of 2013 poll results:
1) iPhone 5S
2) Samsung Galaxy S4
3) Samsung Galaxy Note 3
4) HTC One
5) Sony Xperia Z1
6) Google Nexus 5
7) Nokia Lumia 1020
8) iPhone 5C
9) Nokia Lumia 920
10) BlackBerry Z1
Ernest Doku, telecoms expert at uSwitch.com, said of the results:
"These results speak volumes as to both the enduring popularity of the iPhone, as well as the
hugely positive reaction from customers to the Galaxy S4.
"Critics might have found the S4 packed with gimmicks rather than must-have features, but sales
have been massive and - in conjunction with a strong phablet sequel in the Note 3 - taken
Samsung from strength to strength in 2013.
"An interesting point to note is the relatively lacklustre showing from Apple's iPhone 5C, with its
premium pricing unexpectedly making the 5S more appealing as a luxury device.
"Whilst the flagship effort topped sales charts and polls alike, a modest placing for the iPhone 5C
shows that Apple still has a way to go in courting the trendsetters of tomorrow."
A new battery life test from Which? Tech Daily has deemed Apple's new iPhone 5S and 5C
inadequate in comparison to several of the tech giant's Android competitors.


Page
12

The test examined eight smartphones running different operating systems to see just how much
juice users can expect when making calls and browsing the Internet with 3G. Which? used a
phone network simulator that levels the signal strength so that it was constant for each
smartphone and used each on a "readable," rather than maximum, screen brightness level. Each
smartphone was fully charged prior to the test.
CASE 5:
(CNN) -- Samsung tablets have edged out iPads for the first time in JD Power's biannual
customer-satisfaction survey; although some observers say the results don't quite add up.
Samsung topped JD Power's rankings with a score of 835 out of 1,000, narrowly beating out
Apple's 833. Amazon was third in customer satisfaction at 826, followed by Asus and Acer.
The rankings are based on the experiences of 3,375 tablet owners who responded between March
and August of this year, and don't include the new iPad Air and iPad Mini, which went on sale
Friday.
But some tech pundits questioned the market-research company's scoring system.
Survey respondents scored Apple's iPad higher than Samsung's tablets in four of five categories -
- performance, ease of operation, styling/design, and features -- while Samsung scored higher in
just one: cost.
A Samsung Galaxy Tab 3 tablet with a 7-inch screen and 16GB of storage sells for $199,
compared to $399 for a comparable iPad Mini.
"Reporters who got their hands on the attached chart were left scratching their heads," wrote
Philip Elmer DeWitt in Fortune. "The only category that Samsung beat Apple in was (duh) cost.
And cost, according to Power's press release, counts for at most 16% of the total score."
"Did J.D. Power overreach in giving its top customer satisfaction nod to Samsung instead of


Page
13

Apple?" wondered Don Reisinger of CNET. "So who's the real winner?"
JD Power did not immediately respond Friday to CNN's request for comment.
Apple in the past has trumpeted JD Power's rankings as evidence of its products' popularity with
consumers. At the company's Worldwide Developers Conference in June, Apple CEO Tim Cook
bragged that iOS devices have won nine consecutive JD Power awards.
JD Power's survey notes that Samsung is the only manufacturer to improve across all five
categories since its last survey in April.
The survey found that before buying their tablet, 50% of consumers rely on recommendations
from friends, family members or colleagues, while 49% gather information from the
manufacturer's website.
Other factors that determine tablet-buying choices include brand reputation (42%) and past
experience with the brand (32%).


Page
14

Chapter III – Research Methodology
(3.1) Formation Of Research Problem
The electronics industry in India is growing rapidly at a rate of 16% to 17%. The two major
players are Apple and Samsung with a combined market share of 90%. There is still scope in the
market for growth. Hence, the research problem is to find out which company is preferred by the
consumers and which company has a better opportunity to take advantage of the growing
industry and consumer preference and also has a greater market share in the future.
(3.2) Objectives of Study
• To study the current market position for the two companies and their products.
• To study the consumer preference for the two companies.
• To study out which company will do better in the market in future.
(3.3) Scope of study
• With an intention to study the electronic industry the researchers have restricted the study
to the city of Mumbai.
• Researchers have restricted their study to the two major companies, Apple and
Samsung.Within these companies, the research has been restricted to the following
products:
o Macbooks (Apple)
o iPads (Apple)
o Samsung Galaxy (Samsung)
o iPhones (Apple)
o Samsung Laptops (Samsung)
o iMac (Apple)
o BADA (Samsung)


Page
15

o iOS (Apple)
o Samsung Tabs (Samsung)
(3.4) Hypothesis
1. H0 – There is no impact of income on consumer preference.
H1 – There is an impact of income on consumer preference.
2. H0 – There is no impact of age on consumer preference.
H1 – There is an impact of age on consumer preference.
3. H0 – Future scope of Apple is not more than Samsung
H1 – Future scope of Apple is more than Samsung
(3.5) Data Collection
Primary Data: For the intension to complete the research project, an attempt was made to
collect primary data using a structured questionnaire. This primary data will be used in the study
for the purpose of the further statistical calculation. Primary data will include the interviews of
the ones who use Apple and Samsung Products.
Secondary Data: The survey will be the back bone of the entire research work. The secondary
data under consideration will be collected from different secondary sources namely newspapers,
business articles, internet, reference books, etc.


Page
16

(3.6) Research Instrument
To collect the data the researchers have used a structured questionnaire. The questionnaire so
formed has only close ended questions.
(3.7) Research Design
The researchers will use primary as well as secondary data as means of data collection. To
collect primary data the researchers will use surveys as an instrument and to collect secondary
data the researchers will case studies from the internet.
(3.8) Sampling Plan/Sampling Technique
The objective of conducting a questionnaire is to analyze the consumer’s preferences, needs and
thoughts. Their expectations from the brand are noted. The survey was conducted in Mumbai.
This was conducted to get the feedback of people from a variety of backgrounds and different
financial standing.
The objective of conducting a focus group is to learn the viewpoint of the consumers about the
brand in a personalized manner. They will be asked to freely share and state their opinions of the
brand and also to criticize it as well as state its benefits. The members of the focus group will be
briefed about the product range under each brand. The companies, their logo, punch line,
promotional collaterals and the marketing program strategies, shall be discussed with them. Their
feedback will be noted and their suggestions will be taken into consideration.
Sample size
The sample size of the questionnaire survey is 100 participants. For the intension to do the
survey the questionnaire will be distributed to 100 respondants from different stratas of society
mainly teenagers, businessmen, etc.
(3.9) Testing Of Hypothesis
The researcher has made an attempt to test the hypothesis using chi square.
(3.10) Research Limitation


Page
17

1. The sample size is limited to a 100 people and hence the result may not be accurate.
2. The sample only includes people living in Mumbai and their views might differ from the
people living out of Mumbai.
3. People may not have been in the right mind set during the focus group discussion and
hence their answers and views might be different.


Page
18

Chapter IV: Pricing Strategy Of Apple and Samsung
Pricing Strategy
In economics and business, the price is the assigned numerical monetary value of a good, service
or asset. Price is also central to marketing where it is one of the four variables (4 P’s namely
Product, Price, promotion, Place) in the marketing mix that business people use to develop a
marketing plan. Pricing is a big part of the marketing mix. Choosing the right price and the right
pricing strategy is crucial to the marketing process. The price of the product is not something that
is fixed .On the other hand the price of the product depends on many other factors. Sometimes
the price of the product has got nothing to do with the actual product itself .The price may act as
a way to attract target customers. The price of the product is decided keeping many things in
mind. These things include factors like cost incurred on the product, target market, competitors,
consumer buying capacity etc.
The US CSD market is mature. The industry sales growth is largely driven by population growth
as well as the amount of advertising and product innovation taking place in the industry. Given
the mature nature of the market, both Apple and Samsung have resorted to pricing discrimination
strategies to maximize the value of consumer demand. Direct Price Discrimination – the simplest
form of extracting customer surplus is charging customers with different prices based on their
location and purchasing power. This is evident in the international operations of both Apple and
Samsung. Apple prices in Mexico, Brazil and Eastern Europe are lower than prices in the U.S.,
even though the cost of the concentrate is practically the same. Domestically, direct price
discrimination is based on distribution channel.


Page
19

Apple – Price
Comparison-shopping for new electronics can be fun and addictive. With a bit of patience, some
luck, and an eye for good deals, you can find everything from TV sets to hard drives at a
significant discount. In fact, in our economy, discounts are one of the primary mechanisms that
retailers use to compete against each other.
But all bets are off if you happen to be in the market for a product made by Apple: Both iOS
devices and Macs seem to be impervious to the discount game. In fact it’s so rare to find a
significant price variance between retailers that, when it does happen, the event usually draws
considerable press coverage.
House Advantage
With so many laws regulating competition among retailers, how does Apple pull off this
amazing feat? It turns out that the company uses a fairly straightforward strategy, known as price
maintenance that takes advantage of the popularity of its products and exploits a quirk in the way
retailers are allowed to advertise their merchandise.
Most products move from manufacturers to retailers through a network of distributors. Even
though each product has a “manufacturer suggested retail price” (MSRP), each retailer is free to
set its own sale price. Thus, a laptop with an MSRP of $500 might cost the retailer $250 to buy,
and might carry a sticker price of $350, accompanied by a bold "30% Off!" announcement in the
store’s weekly flyer. A different retailer might offer an even lower price to attract more store
traffic, or conversely it finds itself in a weaker position due to lower sales volume and have to
charge its customers more for the product.
All of this price variability is possible because of the large difference (commonly from 30 to 55
percent) between the wholesale price—what the retailer pays the distributor for each unit of the
product—and the MSRP for each unit. That gap leaves enough room for each retailer to set its
own policies and generate a sometimes significant range of market prices for a product.
Apple, however, extends only a tiny wholesale discount on its Macs and iPads to your retailer of


Page
20

choice. The actual numbers are a closely guarded secret, protected by confidentiality agreements
between Cupertino and its resellers, but the difference probably amounts to only a few
percentage points off the official price that you find at Apple’s own stores. With such a narrow
gap to tinker with, most retailers can’t offer big discounts and still hope to turn a profit.
Carrot And Stick
The price maintenance approach cuts both ways: Retailers have relatively little incentive to carry
Apple products, or to dedicate precious retail and advertising space to them, if the potential profit
from sales is so low. On the other hand, large chains not uncommonly turn a barely profitable
product into a “loss leader,” selling it below cost to increase customer traffic or to boost sales of
ancillary goods, such as accessories and cables, that have a higher profit margin.
This is where the second part of Apple’s retail strategy kicks in: The company supplements its
tiny wholesale discounts to resellers with more substantial monetary incentives that are available
only if those resellers advertise its products at or above a certain price, called the “minimum
advertised price” (MAP). This arrangement enables retailers to make more money per sale, but it
prevents them from offering customers significant discounts, resulting in the nearly
homogeneous Apple pricing we are used to.
The strategy benefits Apple in a number of ways. First, the company makes more money on
direct sales and doesn’t have to compete against marked-down prices offered by its own
resellers. Since Apple’s own retail operations are among the most profitable in the world,
undercutting their prices for the sake of a wider distribution network would be
counterproductive.
Most important, the narrow range of price variability prevents any one retailer from establishing
a strong enough market position to give it an advantage in future negotiations with Apple. Big-
box store chains like Walmart are notorious for using their heft to extract higher and higher
discounts from manufacturers—even to the point of forcing the latter out of business. By keeping
its products' prices on an even keel, Apple reduces the potential for future conflict within its
distribution channels, which also helps keep its own retail operations operating in the black.


Page
21

When Good Discounts Go Bad
The situation with the iPhone is slightly different. Though the phone's retail price is in the
hundreds of dollars, most consumers buy it alongside a two- or (in Canada) three-year cellular
service plan. In exchange for the opportunity to charge their iPhone customers $70 or more a
month, the carriers subsidize the cost of the device itself, which consequently carries a much
lower price than it would if sold unlocked and contract-free.
For retailers, these phone-and-service-contract deals are profitable not because of the hardware's
selling price, but because of a commission that carriers pay them, depending on the length and
the cost of the mobile plan that each customer chooses. This helps explain why many stores will
sell you an iPhone at the discounted price only if you buy it together with “in-store activation”;
otherwise, they’d miss out on the bulk of their financial gain from the transaction.
This fact also helps explain why stores sometimes break rank and offer discounts on Apple
handsets. Such was the case with certain Walmart locations during this past holiday season,
which offered consumers an iPhone 5 for $127—a $70 discount from the normal $199 price. The
retail giant probably set up this special deal without Apple’s involvement, and it produced
repercussions in the marketplace as competitors attempted to match Walmart’s prices.
The End Of The Road
The pricing techniques that Apple uses aren't illegal, and most of them are commonplace in the
industry. MAP, for example, is almost certainly at play when an online retailer requires you to
add a product to your basket before revealing its price; and carriers offer kickbacks to resellers
for most smartphones. Apple has simply distilled these standard tactics into a retail strategy that,
so far, has worked out very well—aided, in no small part, by the public’s seemingly insatiable
lust for its products.
The cumulative effect of Apple's pricing policy on consumers is hard to nail down. On one hand,
we're deprived of the positive effects that price competition normally produces in a free market.
The familiar phenomenon that Apple products tend to be more expensive than their competitors
in the same market space doesn't just happen: You can easily find an inexpensive laptop, but it’s


Page
22

much harder to come across an inexpensive Apple laptop.
On the other hand, it’s also hard to come across an inferior Apple laptop—and this is true of
every other product that leaves the company’s manufacturing facilities: Generous profit margins
and a tight control over its distribution channels have enabled Cupertino to produce higher-
quality goods at prices that only modestly exceed those of rival products. Thus, arguably,
consumers enjoy a better overall experience, dollar for dollar, in the long term.
Either way, Apple’s pricing strategy is a fascinating aspect of the company’s notoriously
controlling nature. If nothing else, knowing that the prices of its products are so stable makes
shopping for them relatively stress-free: The only patience you need is the patience to wait for
the delivery guy to show up at your door.
SAMSUNG – PRICING
Samsung’s strategy was to build something similar to another company’s product but to make it
better, faster and at lower cost. Heavy investments have not been a problem; it once secured low-
cost loans from a government-controlled banking sector friendly to big businesses and now
draws on its own coffers, which are sloshing with cash.
After the court victory, Apple lawyers sought injunctions against sales of Galaxy smartphones
and tablets in the American market. But those products had already lived through their life cycles
in Samsung’s fast-paced marketing plan, analysts and Samsung officials said. With characteristic
speed, Samsung had already retooled its latest Galaxy S III smartphones to stay ahead of the
patent battle.
In South Korea, where Samsung’s achievements are a source of national pride, many perceived a
bias against a foreign competitor in the American jury verdict.
Samsung Electronics is the flagship of Samsung Group, a family conglomerate that controls
more than 80 companies that build oil tankers and apartment complexes, run hotels and
amusement parks and sell insurance to housewives and artillery pieces to the military. The
flagship’s operations are often faulted for their opacity. But analysts say that also allows
Samsung to place huge bets and do so quickly.
Samsung makes not only hardware but also its components; it is Apple’s biggest parts supplier
and its fiercest competitor in the completed smartphone market. In a way, its rivals help
Samsung compete with them. Samsung’s handset business was its growth driver, raking in 20.5


Page
23

trillion won ($18 billion) in the second quarter.
The strategy worked well for the latest product it dominated — smartphones — until Apple
declared war over intellectual property in April 2011, accusing the South Korean company of
“slavishly copying” the feel and look of its iPhone and iPad.
Samsung appeared to consider the legal trouble a necessary cost of squeezing out a giant in yet
another field it is fast dominating. Samsung’s smartphone sales in the second quarter grew 150
per cent to 50.5 million units, or a record 35 per cent of the market, according to the research
firm Strategy Analytics. Apple grew 28 per cent, to 26 million units. Apple will attempt a surge
back with its new iPhone model this year, but Samsung is ready to introduce the Galaxy S IV as
a counter.
“The patent ruling and Samsung’s copycat image will have a negative impact on Samsung’s
sales of cellphones and other products,” said Kevin Lee, an analyst at Korea Investment and
Securities. “But Samsung will further widen the gap with Apple in the third quarter, though not
as much as expected before the ruling.” Samsung is appealing the verdict, which it called “a loss
for the American consumer.” Song said that despite the verdict, the fight for the smartphone
market was over and had been decided in Samsung’s favour.
In South Korea, where Samsung’s achievements are a source of national pride, many perceived a
bias against a foreign competitor in the American jury verdict. Still, the ruling reminded South
Koreans of something their country lacked, a shortcoming magnified by comparisons between
Samsung and Apple.
Although the name Samsung is synonymous with sophistication among South Koreans, the
company has never created a product so innovative that it has defined an era in consumer culture,
like the Walkman or the iPhone.


Page
24

Chapter V: The Gadget Wars
Apple vs Samsung Law Suits
Apple Inc. v. Samsung Electronics Co., Ltd. was the first of a series of
ongoing lawsuits between Apple Inc. and Samsung Electronics regarding the design
of smartphones and tablet computers; between them, the companies made more than half
of smartphones sold worldwide as of July 2012. In the spring of 2011, Apple began litigating
against Samsung in patent infringement suits, while Apple and Motorola Mobility were already
engaged in a patent war on several fronts. Apple's multinational litigation over
technology patents became known as part of the mobile device "smartphone patent wars":
extensive litigation in fierce competition in the global market for consumer mobile
communications. By August 2011, Apple and Samsung were litigating 19 ongoing cases in nine
countries; by October, the legal disputes expanded to ten countries. By July 2012, the two
companies were still embroiled in more than 50 lawsuits around the globe, with billions of
dollars in damages claimed between them. While Apple won a ruling in its favor in the U.S.,
Samsung won rulings in South Korea, Japan, and the UK. On June 4, 2013, Samsung won a
limited ban from the U.S. International Trade Commission on sales of certain Apple products
after the commission found Apple had violated a Samsung patent, but this was vetoed by U.S.
Trade Representative Michael Froman.
The first huge patent trial between Apple and Samsung started in 2012 and its first verdict was
for Apple to receive $1.05 billion for the damages caused by its infringed patents. Samsung


Page
25

argued there were some discrepancies between the numbers the jury awarded Apple and after a
new trial Samsung's fine was reduced to $929.8 million.


Page
26

Chapter VI: Data Analysis and Interpretation
The results of the survey conducted (questionnaire attached in annexure) are as follows:
Q1) What is your age?
Findings:
1. According to the survey, the researcher has found out that majority of the people who
responded to the survey are between the age group 10-20.
2. Out of 100 people, 30 of the people were between the age 11-20
5. Out of 100 people, 21 of the people were between the age 40 & above.


Page
27

Q2) Do you use electronic gadgets?
Findings:
responded use electronic gadgets
2. Out of 100 people, 95 of the people use electronic gadgets.
3. Out of 100 people, 5 of the people were electronic gadgets.


Page
28

Q3) What brand do you prefer for Mobile Phones?
Findings:
responded to the survey prefer Apple for Mobile Phones
2. Out of 100 people, 47 preferred Apple.
3. Out of 100 people, 35 preferred Samsung.
4. Out of 100 people, 14 preferred Nokia.
5. Out of 100 people, 2 preferred Blackberry.


Page
29

Q4) What is your average monthly income?
Findings:
1. According to the survey, the researcher has found the average monthly income of the
people who answered the survey.
2. 11 people earned from 0-10000.
5. 7 people earned from 30001-40000
10. 17 people earned from 80001 & more


Page
30

Q5) what brand do you prefer in laptops?
Findings:
1. According to the survey, the researcher has found out that majority of the people
who responded to the survey preferred Samsung over Apple for Laptops
2. Out of 100 people, 50 preferred Samsung
3. Out of 100 people, 30 preferred Apple
4. Out of 100 people, 15 preferred Dell


Page
31

Q6) what brand do you prefer in desktops?
Findings:
responded to the survey preferred Apple in Desktops
2. Out of 100 people, 59 preferred Apple.
3. Out of 100 people, 32 preferred Samsung.
4. Out of 100 people, 9 preferred IBM.


Page
32

Q7) what brand do you prefer in tablets?
Findings:
1. According to the survey, the researcher has found out that majority of the people prefer
Apple in Tablets
2. Out of 100 people, 70 people prefer Apple.
3. Out of 100 people, 12 people prefer Samsung.
4. Out of 100 people, 18 people prefer Dell.


Page
33

Q8) what brand has better features?
Findings:
Apple over Samsung in better brand features
2. Out of 100 people, 74 people prefer Apple Features.
3. Out of 100 people, 26 people prefer Samsung Features.


Page
34

Q9) what brand has a better price?
Findings:
1. According to the survey, the researcher has found out that majority of the people said that
Apple has a better price than Samsung
2. Out of 100 people, 59 people said that Apple has a better price.
3. Out of 100 people, 41 people said that Samsung has a better price.


Page
35

Q10) Does the price of the electronic gadgets affect your brand preference?
Findings:
1. According to the survey, the researcher has found out that majority of the people get
affected by their brand preference due to the price.
2. Out of 100 people, 70 people think the price of electronic gadgets affects their brand
preference.
3. Out of 100 people, 30 people do not think the price of electronic gadgets affects their
brand preference.


Page
36

Q11) Which advertisements do you see more?
Findings:
1. According to the survey, the researcher has found out that majority of the people said
Apple has more advertisements than Samsung
2. Out of 100 people, 75 people think Apple.
3. Out of 100 people, 25 people think Samsung.


Page
37

Q12) Considering the whole product range, which company do you think will be preferred
more in the near future?
Findings:
Apple over Samsung.
2. Out of 100 people, 35 people chose Samsung over Apple.
3. Out of 100 people, 65 people chose Apple over Samsung.


Page
38

CHAPTER VII – TESTING HYPOTHESIS WITH THE HELP OF CHI SQUARE
QUESTION 1)
INCOME(IN
THOUSANDS)
APPLE SAMSUNG WINDOWS NONE TOTAL
0-10 10 24 13 13 60
10-20 2 6 3 0 11
20-30 0 1 2 0 3
30-40 0 2 1 1 4
40-50 1 0 3 0 4
50-60 2 0 1 0 3
60-70 0 1 0 0 1
70-80 0 1 1 0 2
80+ 4 8 4 2 18
TOTAL 19 43 28 16 106
H0 – There is no impact of income on consumer preference
H1 – There is an impact of income on consumer preference
Observation O
row
total
column
total
Main
Total
E (O-E)2/E
0-10+Apple 10 60 19 106
10.7547169
8 0.052962595
0-10+Samsung 24 60 43 106
24.3396226
4 0.004738921
0-10+Windows 13 60 28 106 15.8490566 0.512151842
0-10+NONE 13 60 16 106
9.05660377
4 1.71702044
10-20+Apple 2 11 19 106
1.97169811
3 0.000406247
10-20+ Samsung 6 11 43 106
4.46226415
1 0.529917428
10-20+ Windows 3 11 28 106
2.90566037
7 0.003062975
10-20+NONE 0 11 16 106
1.66037735
8 1.660377358
20-30+ Apple 0 3 19 106
0.53773584
9 0.537735849


Page
39

20-30+ Samsung 1 3 43 106
1.21698113
2 0.038686558
20-30+ Windows 2 3 28 106 0.79245283 1.840071878
20-30+NONE 0 3 16 106
0.45283018
9 0.452830189
30-40+ Apple 0 4 19 106
0.71698113
2 0.716981132
30-40+ Samsung 2 4 43 106
1.62264150
9 0.087757789
30-40+ Windows 1 4 28 106
1.05660377
4 0.003032345
30-40+NONE 1 4 16 106
0.60377358
5 0.260023585
40-50+ Apple 1 4 19 106
0.71698113
2 0.111717974
40-50+ Samsung 0 4 43 106
1.62264150
9 1.622641509
40-50+ Windows 3 4 28 106
1.05660377
4 3.574460916
40-50+NONE 0 4 16 106
0.60377358
5 0.603773585
50-60+ Apple 2 3 19 106
0.53773584
9 3.97633234
50-60+ Samsung 0 3 43 106
1.21698113
2 1.216981132
50-60+ Windows 1 3 28 106 0.79245283 0.054357592
50-60+NONE 0 3 16 106
0.45283018
9 0.452830189
60-70+ Apple 0 1 19 106
0.17924528
3 0.179245283
60-70+ Samsung 1 1 43 106
0.40566037
7 0.870776656
60-70+ Windows 0 1 28 106
0.26415094
3 0.264150943
60-70+NONE 0 1 16 106
0.15094339
6 0.150943396
70-80+ Apple 0 2 19 106
0.35849056
6 0.358490566
70-80+ Samsung 1 2 43 106
0.81132075
5 0.043878894
70-80+ Windows 1 2 28 106
0.52830188
7 0.42115903
70-80+NONE 0 2 16 106
0.30188679
2 0.301886792


Page
40

80+ Apple 4 18 19 106
3.22641509
4 0.185479422
80 +Samsung 8 18 43 106
7.30188679
2 0.066744674
80 + Windows 4 18 28 106
4.75471698
1 0.119796346
80+ NONE 2 18 16 106
2.71698113
2 0.189203354
Total: 23.18260773
(r-1)(c-1)= (9-1)(4-1)= 27 degrees of freedom
X 2
critical= 40.11
X 2
cal < x2
critical, hence we reject H1
Thus there is no impact of income on consumer preference.


Page
41

Question 2)
H0 – There is no impact of age on consumer preference
H1 – There is an impact of age on consumer preference
Observation O row total
column
total
Main
Total
E (O-E)2/E
0-10 & apple 0 2 18 106 0.339622642 0.339622642
0-10 & samsung 0 2 45 106 0.849056604 0.849056604
0-10 & windows 1 2 27 106 0.509433962 0.472396925
0-10 & none 1 2 16 106 0.301886792 1.614386792
11-20 & apple 12 60 18 106 10.18867925 0.322012579
11-20 & Samsung 23 60 45 106 25.47169811 0.239846261
11-20 & windows 18 60 27 106 15.28301887 0.483018868
11-20 & none 7 60 16 106 9.056603774 0.46702044
21-30 & apple 3 21 18 106 3.566037736 0.08984726
21-30 & Samsung 11 21 45 106 8.91509434 0.487581112
21-30 & windows 3 21 27 106 5.349056604 1.031596286
21-30 & none 4 21 16 106 3.169811321 0.217430368
31-40 & apple 2 5 18 106 0.849056604 1.560167715
31-40 & Samsung 3 5 45 106 2.122641509 0.362641509
31-40 & windows 0 5 27 106 1.273584906 1.273584906
31-40 & none 0 5 16 106 0.754716981 0.754716981
41-50 & apple 0 8 18 106 1.358490566 1.358490566
41-50 & Samsung 3 8 45 106 3.396226415 0.046226415


Page
42

41-50 & windows 2 8 27 106 2.037735849 0.000698812
41-50 & none 3 8 16 106 1.20754717 2.66067217
51-60 & apple 0 5 18 106 0.849056604 0.849056604
51-60 & Samsung 3 5 45 106 2.122641509 0.362641509
51-60 & windows 2 5 27 106 1.273584906 0.414325646
51-60 & none 0 5 16 106 0.754716981 0.754716981
61-70 & apple 0 2 18 106 0.339622642 0.339622642
61-70 & Samsung 1 2 45 106 0.849056604 0.026834382
61-70 & windows 1 2 27 106 0.509433962 0.472396925
61-70 & none 0 2 16 106 0.301886792 0.301886792
70up & apple 1 3 18 106 0.509433962 0.472396925
70 up & Samsung 1 3 45 106 1.273584906 0.058770091
70up & windows 0 3 27 106 0.764150943 0.764150943
70up & none 1 3 16 106 0.452830189 0.661163522
Total 20.10897817
(r-1)(c-1)= (8-1)(4-1)= 21 degrees of freedom @ 5% los
X 2
critical= 32.67
X 2
cal < x2
critical we reject H1
Hence, there is no impact of age on consumer preference


Page
43

Question 3)
H0 – Future scope Apple is not more than Samsung
H1 – Future scope of Apple is more than Samsung
When people were asked which company they thought would be preferred more in the near
future, 75% of the people have selected Apple out of the two companies. Therefore, the
researchers have tried to analyze the reasons for the same with the help of graphs and the results
of the survey conducted. The following results have been noted down:
Rating of scale 1-5 Number of people
1 3
2 5
3 8
4 33
5 51
• This table shows us how popular Apple is amongst the people surveyed by us
• 3/100 have rated the popularity as 1 which is the lowest
• 5/100 have rated it a 2
• 8/100 have rated the popularity of Apple as 3
• 33/100 people have rated the effectiveness of Apple’s popularity a 4
• 51/100 that is the majority of the people surveyed have rated it a 5 which means Apple is
very popular amongst the people


Page
44

1 10
2 59
3 29
4 8
5 12
• This Table shows us how effective the features of Apple is
• 10/100 people have rated the features as 1, which means they do not think the features of
Apple is good enough.
• 59/100 people have rated the features as 2
• 29/100 have given the features of Apple a 3 out of 5
• 8/100 have given the features of Apple a 4 out of 5
• 12/100 people have rated the features as 5
1 3
2 18
3 20


Page
45

4 22
5 37
• 3/100 people have rated the pricing of Apple as 1 thus these people do not think the
pricing is effective
• 18/100 people have given a 2, they are also amongst the people who think that Apple’s
pricing is not effective
• 20/106 have rated the pricing as 3, they say that the pricing is neither effective nor is it
ineffective
• 22/100 have rated it a 4, these people think that the pricing is quite effective
• 37/100 are the people who have rated the pricing as 5, they think the pricing is very
effective.
Mobile Phones Number of people
Apple 57
Samsung 33
Nokia 4
Blackberry 3
HTC 3


Page
46

• This table shows us what brand the people will choose for mobile phones.
• 57/100 people have chosen Apple
• 33/100 people have chosen Samsung
• 4/100 people have chosen Nokia
• 3/100 people have chosen Blackberry
• 3/100 people have chosen HTC
Brand Number of People
Apple 75
Samsung 25
• This table shows us what has a brighter future Apple or Samsung
• 75/100 people think Apple has a brighter future
• 25/100 people think Samsung has a brighter future
From the above tables we can conclude that maximum number of people would purchase more
of Apple products than of Samsung products.
Thus it can be said that in the near future Apple will have an upper hand in the market due to its
popularity.
Considering all the above mentioned factors, the researchers have accepted the hypothesis H1.
Hence the researchers conclude that future scope of Apple is more than Samsung.


Page
47

Chapter VIII – Conclusion
After conducting the research, with the help of secondary and primary data, the researchers have
found with that Apple and its products have an upper hand in the market. As per the secondary
data, the market share of Apple and its products is claimed to be 51%, while that of Samsung and
its products is 45%.
As per the data from the primary research conducted by the researchers, Apple products in the
electronics market has a higher market share, led by Apple Mobile Phones, a brand of Apple.
Similar is the case with laptops and tablets where Macbooks and iPads, both, products of Apple
have a higher market share compared to its rivals in the market. Hence, looking at the overall
data, the researchers conclude that Apple currently has a better market share and a better brand
image than its competitor, Samsung. This upper hand of Apple is mainly because of some of its
strong brands like iPhones and iPads.
While making an attempt to learn more on the future scope of the industry with respect to these
two leading players, the researchers have found that Apple has a better scope for the future than
Samsung. This is because of the strong product range and the brand image and the popularity
that Apple has built.


Page
48

Chapter IX – RECOMMENDATION
There is a tremendous potential for further growth in the India market in the electronics industry.
Around 67% of the people have said that they have increased the purchase of electronic gadgets
in India. This shows that people like electronics in India. Looking at this, the researcher would
recommend these two companies to pay more attention in making more and better gadgets.
According to the survey Apple is more user friendly and less complicated in its software than
Samsung, so Samsung should improve their software i.e. BADA and make it better and less
complicated than Apple.
According to the survey people think Apple has a better price between both the two big
companies and also they see more advertisements of Apple than Samsung.
The survey also says that people think Apple has a better future than Samsung because of its
features,


Page
49

BIBLIOGRAPHY
• en.wikipedia.org
• www.google.com
• www.apple.com
• www.samsung.com
• www.linkedin.com
• www.betanews.in
• www.debate.org
• www.papercam.com
• www.studymode.com


Page
50

ANNEXURE
Apple v/s Samsung
Please take a few minutes to complete this survey. Your specific answers will be completely
anonymous, but your views, in combination with those of others, are extremely important. This
survey is regarding the brand preference of electronic gadgets consumers and the switching
behavior of the customer. The responses given will be used for the academic purpose to complete
my research work.
Please tick mark where ever applicable.
Product Range for Samsung includes:
1. Samsung Tabs
2. Samsung Mobile Phones (Galaxy, Note, S series, Corby)
3. Samsung Laptops
4. Samsung desktops
5. Bada
Product Range for Apple includes:
1. iPhones
2. iPads
3. Macbook (pro and air)
4. iMac
5. iOS


Page
51

1) What is your name?
2) What is your age?
0-20
20-30
30-40
40 & above
3) Do you use electronic gadgets?
Yes
No


Page
52

4) What is your average monthly income?
0-10000
10001-20000
20001-30000
30001-40000
40001-50000
50001-60000
60001-70000
70000-80000
80001 & more
5) What brand do you use in mobile phones?
Samsung
Apple
Nokia
Blackberry


Page
53

6) What brand do you prefer in Laptops?
Samsung
Apple
Dell
7) What brand do you prefer in Desktops?
Samsung
Apple
IBM
8) What brand do you prefer in Tablets?
Samsung
Apple
Dell
9) What brand has better features?
Samsung
Apple


Page
54

10) What brand has a better price?
Samsung
Apple
11) Does the price of the electronic gadgets affect your brand preference?
Yes
No
12) What advertisements do you see more?
Samsung
Apple
13) Considering the whole product range, which company do you think will be preferred
more in the near future?
Samsung
Apple

A comparative study between Apple and Samsung

Recommandé

Recommandé

Contenu connexe

Tendances

Tendances (20)

En vedette

En vedette (14)

Similaire à A comparative study between Apple and Samsung

Similaire à A comparative study between Apple and Samsung (20)

Dernier

Dernier (20)

A comparative study between Apple and Samsung