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    A Comparative Study Between Apple and Samsung

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    Ishandeep Singh

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    THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI “A STUDY ON PRICING STRATEGIES OF SAMSUNG AND APPLE” PROJECT SUBMITTED TO: UNIVERSITY OF MUMBAL FOR THE BACHELOR OF MANAGEMENT STUDI SEMESTER 5 SUBMITTED BY: “VIVEK SHAH” NOVEMBER 2014 Page1 THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI 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 & clear identity, as is the ease 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. Pagez THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI TABLE OF CONTENTS. [CHAPTER | CONTENTS PAGE NUMBER NUMBER 1 INTRODUTION Bl OL REVIEW OF LITERATURE 12-16 nr RESEARCH METHODOLOGY 17-21 FORMULATION OF RESEARCH PROBLEM 7 [32 | OBJECTIVE OF STUDY 17 (33 SCOPE OF STUDY 17-18 34 HYPOTHESIS 18 35 DATA COLLECTION 19 (36 / RESEARCH INSTRUMENT 19 [37 | RESEARCH DESIGN 19 38 SAMPLING PLAN/SAMPLING TECHNIQUE 20 39 TESTING OF HYPOTHESIS 20 | 3.10 RESEARCH LIMITATION 21 Vv PRICING STRATEGY OF APPLE AND SAMSUNt 22-28 Vv THE GADGET WARS 29-30 Vi DATA ANALYSIS AND ERPRETATION 31-42 Page3 THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI Vil TESTING HYPOTHESIS WITH THE HELP OF CHI | 43-55 SQUARE / vi CONCLUSI 56 1x | RECOMMENDATION 37 x BIBLIOGRAPHY 38 ANNEXURE 59-64 Page4 THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI 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 | 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 ros ABOUT APPLE: Apple Ine. is an American multinational comporation headquartered in Cupertino, California, that designs, develops, and sells consumer electronics, computer software and personal computers. Its best-known hardware products are the Macline 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, Ine. on January 3, 1977, and was renamed as Apple Ine. 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 practi 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 QL PageS THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI 2014, Apple's five-year growth average is 39% fortop line growth and 45% for bottom line growth. In May 2013, Apple entered the top ten of the Fortune S00 list of companies for the first time, rising 1 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 PRODUC = Mac Books = Pads * iPhones + iPods = iMac * Apple TV = Softwares Page6 THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI ABOUT SAMSU' 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 atrading company. Over the next three decades the group diversified into areas including food processing, textil 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 19908 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. Electronies (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? THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI 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 PRODUCT > Samsung Phones > Samsung Notes > Samsung Laptops > Samsung Desktops se Samsung Softwares Page8 THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI Chapter Il REVIEW OF LITERATURE CASE A new survey conducted by Consumer Intelligence Research Parmer (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 customers moved across from only 7% of Samsung's mobil ing 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) lll 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 ¢ tomers than Samsung did Apple customers Page9 THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI CASE 2: NEW YORK, Noy. 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 Appl five categories, losing out in only one -- cost. iPad scored higher than Samsung in four out of 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 SS, dominated rival Samsung's Galaxy S4. Apple was able to put not one, but two smartphones ahead of the S4, as the chart-leading 58 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 $$ 2.) iPhone 5 3.) Galaxy $4 4.) iPhone SC 5.) Galaxy Note 3 6.) Galaxy S3 7.) Galaxy S4 Mini 8.) Nokia 105 9.) Galaxy $3 Mini 10.) Asha 501 Page THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI 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 Switeh Tech users that participated in the poll, The Samsung Galaxy $4 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 SC finished just cighth. Below are the full w Switch Tech smartphone of 2013 poll results: 1) iPhone 38 2) Samsung Galaxy s4 3) Samsung Galaxy Note 3 4) HTC One 5) Sony Xperia Zz 6 Google Nexus 5 ay Nokia Lumia 1020 8) iPhone sc %) Nokia Lumia 920 10) BlackBerry Z1 Emest Doku, tele "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 $4 (have found the $4 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 SC, 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 SC 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 SS and SC inadequate in comparison to several of the tech giant's Android competitors. 1s expert at uSwitch.com, said of the res Page THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI The test examined eight smartphones running different operating systems to see just how much juice users can expect when making calls and browsing the Intemet 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) - customer-satisfaction survey; although some observers say the results don't quite add up. samsung tablets have edged out iPads for the first time in JD Power's biannual 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 THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI 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 produets’ 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 s, while 49% gather information from the from friends, family members or colleagu manufacturer's website. Other factors that determine tablet-buying choices include brand reputation (42%) and past experience with the brand (32%). Page THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI 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 prefered 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 follo i products: © Macbooks (Apple) © iPads (Apple) © Samsung Galaxy (Samsung) © iPhones (Apple) © Samsung Laptops (Samsung) © iMac (Apple) BADA (Samsung) ° Page THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI © iOS (Apple) © Samsung Tabs (Samsung) 3.4) Hypothesis 1, Hy ~ There is no impact of income on consumer preference. H, ~ There is an impact of income on consumer preference. 2. Ho ~ There is no impact of age on consumer preference Hy - There is an impact of age on consumer preference. 3. Hy — Future scope of Apple is not more than Samsung 1H, — 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, ete. Page THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI (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) Researeh 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 archers 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 leam 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 cach 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 THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI The sample size is limited to a 100 people and hence the result may not be accurate, The sample only includes people living in Mumbai and their views might differ from the people living out of Mumbai 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 THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI 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, Pri marketing plan. Pricing promotion, Place) in the marketing mix that business people use to develop a 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 altract 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 ete ‘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 intemational operations of both Apple and in Mexico, Bra Samsung. Apple pric 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 THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI 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 driv ata 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 scem to be impervious to the discount game. In fact it’s so rare to find a ficant 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 thi 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% Of" 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 THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI choice. The actual numbers are a closely guarded secret, protected by confidentiality agreements between Cupertino and it 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 ret lers 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 tum 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, Thi 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 called the “minimum only if those resellers advertise its products at or above a certain pric advertised price” (MAP). This arrangement enables retailers to make more money per sale, but it prevents them from offering customers signi jcant 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 pi ion 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 THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI 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 cartiers 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 h st for its products. ‘The cumulative effect of Appl hard to nail down. On one hand, s pricing policy on consumers 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 THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI 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- ity goods at prices that only modestly exceed those of rival products, Thus, au guably, 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. ‘Afier 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 $ 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 THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI trillion won ($18 billion) in the second quarter. The strategy worked well for the latest product it dominated — declared war over intellectual property in April 2011, “slavishly copying” the feel and look ofits iPhone and iPad smartphones — until Apple ising the South Korean company of Samsung appeared to consider the legal trouble a necessary cost of squeezing out a giant in yet another field i 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 $ IV as is fast dominating. Samsung’s smartphone sales in the second quarter grew 150 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 Song said that despite the verdict, the fight for the smartphone market was over and had been decided in Samsung's favour. for the American consumer.” 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 THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI Chapter V: The Gadget Wars Apple vs Samsung Law Suits Apple Inc. v. Samsung Electronics Co., Lid. was the of a series of ongoing lawsuits between Apple Inc. and Samsung Electronics regarding the desi 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 apatent waron 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 US., 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 afier the commission found Apple had violated a Samsung patent, but this was vetoed by US. Trade Representative Michael Froman. The first huge patent trial between Apple and Samsung started in 2012 and its first verdict was for Apple to reccive $1.05 billion for the damages caused by its infringed patents. Samsung Page THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI argued there were some discrepancies hetween the numbers the jury awarded Apple and after a new trial Samsung's fine was reduced to $929.8 million. Page THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI Chapter Viz Data Analysis and Interpretation The results of the survey conducted (questionnaire attached in annexure) are as follows: QU) What is your age? 30 25 20 0-20 15 20-30 i 030-40 1140 & above 5 0 People Findings: yk ep 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. Out of 100 people, 30 of the people were between the age 11-20 ‘Out af 100 people, 29 of the people were between the age 20-30 ‘Out of 100 people, 20 of the people were between the age 30-40 Out of 100 people, 21 of the people were between the age 40 & above. Page THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI Q2) Do you use electronic gadgets? YES NO Findings: 1. According to the survey, the researcher has found out that majority of the people who 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 THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI Q3) What brand do you prefer for Mobile Phones? @ Samsung BApple Nokia Blackberry People Findings: According to the survey, the researcher has found out that majority of the people who responded to the survey prefer Apple for Mobile Phones . Out of 100 people, 47 preferred Apple. . Out of 100 people, 35 preferred Samsung. Out of 100 people, 14 preferred Nokia. . Out of 100 people, 2 preferred Blackherry. yk ep Page THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI Q4) What is your average monthly income? 25 20 15 10 a Oo People 80001 & more Findings: 1, According to the survey, the researcher has found the average monthly income of the people who answered the survey. 11 people earned from 0-1 0000. 9 people earned from 10001-20000. 7 people earned from 20001-30000, 7 people earned from 30001-40000 3 people earned from 40001-50000 10 people earned from 50001-60000 .. 14 people eared from 60001-70000 ). 22 people earned from 70001-80000 10. 17 people earned from 80001 & more Se A aL BED Page THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI QS) what brand do you prefer in laptops? G@Samsung @Apple ODell People 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 Out of 100 people, 50 preferred Samsung Out of 100 people, 30 preferred Apple ‘Out of 100 people, 15 preferred Dell sep Page THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI Q6) what brand do you prefer in desktops? 60 50 30 20 10 @ Samsung Apple CIBM People Findings: . According to the survey, the researcher has found out that majority of the people who responded to the survey preferred Apple in Desktops ‘Out of 100 people, 59 preferred Apple. Out of 100 people, 32 preferred Samsung. |. Out af 100 people, 9 preferred IBM. THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI Q7) what brand do you prefer in tablets? @ Samsung Apple ODell People Findings: 1. According to the survey, the researcher has found out that majority of the people prefer Apple in Tablets 2. Out af 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 THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI Q8) what brand has better features? D Apple Samsung People Findings: 1. According to the survey, the researcher has found out that majority of the people prefer 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 THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI Q9) what brand has a better price? G SAMSUNG APPLE 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. THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI QID) Does the price of the electronic gadgets affect your brand preference? @Yes mNo 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. THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI QUI) Which advertisements do you see more? 80 70 60 2 [SAMSUNG 40 APPLE 30 20 10 0 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. = as. THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI Q12) Considering the whole product range, which company do you think will be preferred more in the near future? @ Samsung Apple People Findings: 1. According to the survey, the researcher has found out that majority of the people prefer Apple over Samsung, 2. Out af 100 people, 35 people chose Samsung over Apple. 3, Out af 100 people, 65 people chose Apple over Samsung. = as. THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI CHAPTER VII ~ TESTING HYPOTHESIS WITH THE HELP OF CHISQUARE QUESTION 1) INCOMEGN APPLE | SAMSUNG WINDOWS TOTAL THOUSANDS) 0-10 I 24 13 3 60 10-20 2 6 3 iW 20-30 0 1 2 3 30-40 0 2 i 4 40-50 1 0 3 4 50-60 2 0 1 3 60-70 0 1 0 1 70-80 0 1 1 2 0+ 4 8 4 18 TOTAL 1 B 28 6 106 Hy — There is no impact of income on consumer preference H, ~ There is an impact of income on consumer preference . row | column | Main Observation O |i lear Teal E (O-E)/E 10.7547169 0-10+Apple 10 | 60 19, 106 8 0.052962595 (24.3396226 0-10+Samsung 24 60, 4B 106 4 0.004738921 O-10HWindows [13 | 60 28 106 15.8490566 | 0.512151842 9.05660377 0-10+NONE 13 60 16 106 4 1.71702044 197169811 10-20+Apple 2 u 19 106 3 0.000406 247, 446226415, 10-20+ Samsung |6 | 1 43 106 1 0.529917428 290566037 10-20+ Windows |3__| 11 28 106 7 0.003062975 1.66037735 10-20+NONE 0 I 16 106 _ 1.660377358 0.53773584 20-30+ Apple oO 3 19, 106 9 0.537735849 THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI 121698113 20-30+ Samsung 43 106 2 0.038686558 20-30+ Windows 28 106 0.79245283 | 1.840071878 0.45283018 20-30+NONE 16. 106 9 0.452830189 O71698T13 30-40+ Apple 19 106 2 0.716981132 1,62264150 30-40+ Samsun, 43 106 9 0.087757789 105660377 30-40+ Windows 28 106 4 0.003032345, 0,60377358 30-40+NONE 16. 106 5 0.260023585, 0.71698 113 40-50+ Apple 19 106 2 111717974 162264150 40-50 Samsung 43 106 9 1,622641509 1.05660377 40-50+ Windows 28 106 4 3.574460916 0,60377358 40-50+NONE 16. 106 5 0.603773585, 0.53773584 50-60+ Apple 19 106 9 397633234 121698113 50-60+ Samsung 43 106 2 1.216981132 50-60 Windows 28 106 079245283 _| 0.054357592 045283018 50-60+NONE 16 106 9 0.452830189 017924528 60-70+ Apple 19 106 3 0.179245283, 0.40566037 60-70+ Samsung 43 106 7 0.870776656 026415094 {60-70 Windows 28 06 3 0.264150943 015094339 60-70-NONE 16 106 6 0.150943396 035849056 70-80+ Apple 19 106 6 0.358490566 0.81132075 70-80+ Samsun; 43 106 5 0.043878894 0.52830188 70-80+ Windows 28 106 7___| 042115903 0.301 88679 70-80+NONE 16 106 2 0,301886792 THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI 3.22641509 80+ Apple 4 iis 19 106 l4 | o.185479422 7.301 88679 804Samsung [8 18 | 43 106 2 0,066744674 4.75471698 80+ Windows 4 18 28 106 1 0.119796346 (2.71698113, 80+ NONE 2 18, 16. 106 2 0.189203354 Total: 23.18260773 (e1yel X? critieal= 40.11 9-1 )(4- )= 27 degrees of freedom X *cal < x" critical, hence we reject Hy ‘Thus there is no impact of income on consumer preference. Page THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI Question 2) Hy — There is no impact of age on consumer preference H, ~ There is an impact of age on consumer preference column Main Observation ° row total | oat E (O-E)VE 0-10 & apple 0 2 18 106 0.339622642 0,339622642 0-10 & samsung i) 2 a5 106 0.849056004 0.849056604 0-10 & windows 1 2 7 106 0.509433962 0.472396925 0-10 & none 1 2 16 106 0.301886792 1614386792 11-20 & apple 2 0 18 106 10.18867925 0,322012579 11-20 & Samsung 23 60 aS 106 2547169811 (0.239846261 11-20 & windows 18 0 27 106 1528301887 (0483018868 11-20 & none 7 «0 16 106 9.050603774 0.46702044 21-30 & apple 3 21 18 106 3.566037736 0.08984726 21-30 & Samsung, mn 21 45 106 891509434 OAR7S81112 21-30 & windows 3 21 27 106 5.349056004 1.031596286 21-30 & none 4 21 16 106 3.169811321 0.217430368 31-40 & apple 2 3 18 106 0.849056004 1560167715 31-40 & Samsung 3 5 a5 106 2122641509 (0.362641509 31-40 & windows 0 5 27 106 1273584006 1273584906 31-40 & none 0 5 16 106 0.754716081 0754716981 41-30 & apple 0 8 18 106 1358490566, 1358490566 41-50 & Samsung 3 8 a5 106 3.396226415 0.046226415 Page THE STUDY OF SMARTPHONE IN THE CITY OF MUMBAI 41-30 & windows 2 8 27 106 2037735849 0.000698812 41-30 & none 3 8 16 106 120754717 2.66007217 51-60 & apple 0 5 18 106 0.849056004 0.849056004 51-60 & Samsung 3 5 a5 106 2122641509 (0.362641509 51-60 & windows 2 5 27 106 1273584906 (0.414325646 31-60 & none 0 5 16 106 0.754716081 0754716981 61-70 & apple 0 2 18 106 0.339622642 (0.339622642 61-70 & Samsung, 1 2 a5 106 0.840056604 (0.026834382 61-70 & windows T 2 27 106 (0,509433062 (0.472396925 61-70 & none 0 2 16 106 0301886792 0301886792 Toup & apple I 3 18 106 0,509433062 (0472396925 70 up & Samsung 1 3 45 106 1.273584906 0.058770091 TOup & windows 0 3 27 106 (0.764150943, (0.764150943 TOup & none 1 3 16 106 (0452830189 0.661163522 Total 20.10897817 (r-1)(c-1)= (8-1)(4-1)= 21 degrees of freedom @ 5% los X? critical= 32.67 X? cal

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