Samsung Rising
By Mike Masnick, Fri Jul 09 02:00:00 GMT 2004

Coming from almost nowhere in the mobile phone market, Samsung has quickly emerged as a top player, taking all of the major players by surprise... and they're not anywhere near satisfied yet.

For a while, it seemed like the mobile phone handset market was a three horse race between Nokia, Motorola and Ericsson (eventually Sony Ericsson). Everyone else seemed like minor players. However, over the last few years, the market has been shaken up, and one of the major reasons has been the emergence of Samsung as a top player, quickly growing market share at its competitors' expense.

Om Malik points out that a recent study from Strategy Analytics notes how the South Korean handset makers have been taking over the market by focusing on strong features and ease of use. While the market leaders from a few years ago rested on their laurels and their brand recognition (in an age where the handset maker brand often carried more weight than the wireless carrier's brand), Samsung and some of the other Korean handset makers knew they had to create something different that caught buyers' attention on its own merits, and not just on the brand. This was especially a challenge for Samsung, whose brand image in the US is often tied to cheap consumer electronics.

However, the strategy has worked wonders so far, and Samsung has predicted that they will overtake Nokia as the market leader by 2010. In order to do so, they're certainly not resting on their laurels. They know that they've been successful so far based on continuous innovation (they release a new phone in the US every two weeks) and they want to continue that process. However, according to this Forbes profile, the next step is to take on Nokia and others where Samsung has always lagged: with their brand. They've been allocating more money towards advertising and branding, and are looking to adjust their entire campaign to reach the point where customers say "I want a Samsung."

The risk of any such strategy, of course, is that the advertising gets ahead of the product development, but so far, Samsung shows no sign of slowing down on that front either. They're spreading the design work out around the globe, and making sure that for all the new features they add, the phones still are quite usable. At the same time, they're trying to look beyond the immediate future to what technology will be in phones three to five years from now. The Forbes story brushes over how much of Samsung's US success was based on their early agreements with Sprint, which gave them a huge channel into the market, but the overall story is a fascinating case study in how to take on large incumbents in a rapidly growing market.