$14 billion per year, worldwide, on research
and development, more than three times as
much as Apple, which has fewer products,
spent in fiscal 2013.
“Samsung has done a fantastic job with
their marketing, by creating customer awareness,” says Riddhi Patel, a research director at
DisplaySearch, an industry analysis firm.
“Samsung is now the top-selling TV brand in
17 countries. Consumers definitely have faith
in the brand.”
The anti-“boob tube”
When flat-panel, wide-screen HDTVs
first were sold in North America, no single
company had market dominance. The familiar old-line TV manufacturers and untested
new brands from Asia were on an even playing field, as no company had any legacy in
this technology. Consumers pondered the
right time to move from a small picture-tube
set to a new, more expensive, high-definition
model, wondering when the price was right.
For Samsung’s move into television, “the
inflection point was in 2005,” notes Paul
Gagnon, director of global TV research for
DisplaySearch. “Samsung has always been big
on competitive pricing and marketing. And
they were the first to really shake things up
when it came to design, moving away from a
TV which was traditionally a black box. Now
design is a cornerstone.”
Early in the growth of HDTVs, Samsung
took a chance on adding color to the frame of
its TVs: Its Bordeaux range featured a red tint
around the edges. As a result, “people started to
view TVs as furniture,” Gagnon says, allowing
women, who often are more design conscious,
to take an interest in purchasing an HDTV.
The interesting question is not so much
how Samsung managed to climb to prominence, but rather how it managed to do so
given strong competition from other major
manufacturers, many of whom make equally
good and compelling products.
Smart and timely
Samsung’s success is the result of smart
strategies coupled with simple twists of fate. As
even Samsung executives acknowledge, they’ve
been in the right place at the right time; but
then they’ve been able to exploit that position.
“We’re a company, even from a global
perspective, that has anticipated changes in
the marketplace,” Tim Baxter, president of
Samsung Electronics America, tells The
Connection. Since joining Samsung in 2006
after 10 years at Sony Corporation of
America, Baxter has been a key player in
Samsung’s efforts to dramatically increase its
American footprint.
When it comes to television, “we antici-
pated the change from analog to digital,
from picture tube to flat-screen HDTVs, and
even from male-centric to female-centric
purchases,” Baxter explains. “In the process
we decided to make some big bets that
helped drive our TV business, our phone
business and even the semiconductor busi-
ness, which were the three pillars that helped
grow the company.”
Those bets included a decision to concen-
trate on flat-panel LCD TVs rather than just
plasma, the introduction of high design into
their TV products and a desire to conquer the
smartphone business by offering multiple
models, even when their initial products
received tepid reviews.
Today the company spends $12 billion to CONTINUED ON PAGE 32
o
i
r
women, who often are more design conscious,
Samsung’s Smart TV technology,
pitched here by executive Tim Baxter,
has helped make the company the
U.S. leader in TV sales.
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