Paradigm shift drives ICT growth
John Park Electric & Electronics and Handset analyst Daishin Securities 822.769.3087 [email protected] Platform companies grow in market capitalization
Market capitalizations of global IT companies
2002 2007 2012 2013 2014 Market cap Market cap Market cap Market cap Market cap Name Name Name Name Name ($bn) ($bn) ($bn) ($bn) ($bn) Microsoft 269.9 Microsoft 292.2 Apple 500.6 Apple 504.8 Apple 613.8 NTT Docomo 206.0 AT&T 241.8 Google 232.2 Google 374.4 Google 390.0 Intel 189.0 Cisco Systems 164.0 Microsoft 224.8 Microsoft 312.3 Microsoft 374.3 IBM 146.0 IBM 155.5 IBM 216.4 IBM 203.7 Facebook 193.6 Nokia 115.4 Google 151.7 Samsung Electronics 210.1 Samsung Electronics 191.6 IBM 191.8 AT&T 104.5 Intel 129.8 AT&T 189.4 Vodafone 190.3 Oracle 185.0 Cisco Systems 101.9 NTT Docomo 118.0 Oracle 178.4 AT&T 185.6 AT&T 181.3 NTT 101.6 NTT 115.4 Vodafone 140.3 Amazon 182.5 Samsung Electronics 179.0 Sony 81.3 HP 113.3 Cisco Systems 117.1 Oracle 172.1 Intel 172.9 Siemens 78.7 Canon 109.9 Qualcomm 105.4 Facebook 138.8 Amazon 156.6 Dell 70.0 Siemens 109.7 Siemens 103.2 Comcast 134.9 Comcast 141.6 Canon 56.9 Oracle 100.4 Intel 102.6 Intel 129.0 Cisco Systems 128.0 Oracle 55.2 Nokia 94.8 Amazon 102.5 Qualcomm 125.4 Qualcomm 127.5 Samsung Electronics 54.6 Apple 93.3 Comcast 84.0 Siemens 120.7 Siemens 110.2 Panasonic 44.6 Comcast 83.4 NTT Docomo 73.7 Cisco Systems 119.9 Vodafone 90.9 Hitachi 39.9 Sony 80.4 NTT 60.9 Softbank 105.1 Softbank 86.6 Applied Materials 39.3 Samsung Electronics 77.4 E-bay 56.3 NTT Docomo 71.7 NTT 76.3 HP 32.3 Qualcomm 74.9 Softbank 53.3 E-bay 71.0 NTT Docomo 75.5 Fujitsu 27.2 Panasonic 70.8 Canon 51.7 Baidu 62.2 Baidu 75.2 Sun Microsystems 25.8 Dell 58.1 HP 50.2 NTT 61.2 HP 71.1 Telefonaktiebolaget LM Comcast 24.9 56.7 Texas Instruments 36.7 KDDI 55.2 E-bay 68.9 Ericsson Telefonaktiebolaget LM Sharp 24.7 KDDI 53.1 32.9 HP 53.4 KDDI 51.7 Ericsson Toshiba 24.7 E-bay 45.8 Infosys 26.6 Texas Instruments 48.1 Texas Instruments 51.4 Qualcomm 24.0 Yahoo 38.5 Yahoo 22.7 Canon 42.3 Canon 43.6 Telefonos Mexico 23.0 Toshiba 36.1 SK Hynix 21.6 ASML 41.9 ASML 42.8 Telefonaktiebolaget LM IAC 23.2 Softbank 34.2 Yahoo Japan 21.3 Yahoo 41.0 41.1 Ericsson Telefonaktiebolaget LM Ricoh 22.3 Telenote 33.8 Panasonic 20.3 40.3 Yahoo 38.3 Ericsson Tokyo Electron 21.0 Telefonos Mexico 33.8 Broadcom 19.6 Hitachi 36.6 Hitachi 36.5 NEC 21.1 Yahoo Japan 30.7 Toshiba 19.5 Yahoo Japan 32.0 Adobe Systems 35.8 Kyocera 21.0 Sharp 30.2 Dell 17.6 Nokia 30.1 Micron 34.9
Note: Based on the last trading day of each year until 2013 and August 31 for 2014. Source: Bloomberg, Daishin Securities Research Center 2 Share price trends (1)
. Samsung Electronics: OP is down from its 2013 peak, dragged down by slowing growth in premium smartphones . Apple: OS-based business model takes off
Share price trends: Samsung Electronics vs. Apple Share price trends: Samsung Electronics vs. Google
(W) SEC Apple (RHS) ($) (W) SEC Google (RHS) ($) 1,800,000 120 1,800,000 700
1,600,000 1,600,000 100 600
1,400,000 1,400,000 80 500
1,200,000 1,200,000
60 400 1,000,000 1,000,000
40 300 800,000 800,000
600,000 20 600,000 200 10.1 10.7 11.1 11.7 12.1 12.7 13.1 13.7 14.1 14.7 10.1 10.7 11.1 11.7 12.1 12.7 13.1 13.7 14.1 14.7 Source: Bloomberg, Daishin Securities Research Center Source: Bloomberg, Daishin Securities Research Center
3 Share price trends: Samsung Electronics vs. Facebook
Share price trends (2) (W) SEC FaceBook (RHS) (W) 1,800,000 80
70 . Hardware: 1) slowing smartphone growth; 2) 1,600,000
weakened tablet demand; and 3) low replacement 60 demand for TV and PC 1,400,000 50 . Software: Operating systems, platforms, and the 1,200,000 Internet of Things create a plethora of content 40 1,000,000 business opportunities 30
800,000 20
600,000 10 10.1 10.7 11.1 11.7 12.1 12.7 13.1 13.7 14.1 14.7 Source: Bloomberg, Daishin Securities Research Center
Share price trends: Samsung Electronics vs. NAVER Share price trends: Samsung Electronics vs. Daum Communications (W) SEC NAVER (RHS) (W) (W) SEC Daum (RHS) (W) 1,800,000 900,000 1,800,000 200,000
800,000 1,600,000 180,000 1,600,000 700,000 1,400,000 160,000 1,400,000 600,000 140,000 1,200,000 1,200,000 500,000 120,000 1,000,000 400,000 1,000,000 100,000 800,000 300,000 800,000 80,000
600,000 200,000 10.1 10.7 11.1 11.7 12.1 12.7 13.1 13.7 14.1 14.7 600,000 60,000 10.1 10.7 11.1 11.7 12.1 12.7 13.1 13.7 14.1 14.7 Source: Bloomberg, Daishin Securities Research Center 4 Source: Bloomberg, Daishin Securities Research Center Taking stock: IT market (1)
. PC, TV, and feature phones drove IT market growth until 2010. . Smartphones started taking over as the main growth driver in 2008 when the first iPhone arrived. IT market growth has been slowing since 2011 due to weakening demand for TV and PC.
Smartphones take over as the main IT market growth driver
PC TV Smartphones
(mn) (mn) (mn) Smartphones Feature phones Noteooks Desktops LCD(incl. LED) Braun tubes (PDP+CRT) 22.1% 400 300 1,800
350 -8.9% 1,600 -11.9% 17.8% 230.0% 250 37.3% 73.2% 69.3% 1,400 300 (60%) 19500.0% 804.9% 8.6% (22%) (57%)-10.8% 200 1,200 -36.8% 44.8% 222.2% 250 35.0% (12%) 4.1% -64.4% 1,000 148.7% (58%) (0%) 200 3.8% -13.3% 150 (30%) (77%) 800 (92%) 89.2% 150 (17%) 22.8% 100 600 (78%) (88%) 100 (43%) -68.0% 400 (100%) (70%) (42%) (100%) (40%) 50 50 (83%) 200 (100%) (23%) (8%) 0 0 0 2000 2005 2010 2013 2000 2005 2010 2013 2000 2005 2010 2013
Note: denotes yoy growth; number within parentheses are proportions. Source: Gartner, DisplaySearch, Daishin Securities Research Center 5 Taking stock: IT market (2)
. PC: The market is contracting because of smartphones and tablets, even though premium notebooks are holding firm. . TV: 1) LCD substitution of CRT is over; 2) the lines between different hardware segments (UHD, OLED, etc.) are blurring; and 3) content is limited. . Smartphones: Smartphones are crowding out other IT devices with competition shifting to hardware, content, and new services.
Hardware competition boosts smartphone ASP
Smartphones PC TV
($bn) Noteooks Desktops ($bn) LCD(incl. LED) Braun tubes (PDP+CRT) ($bn) Smartphones Feature phones 300 140 350 26.2% -4.5% -15.9% 10.3% 12.5% -15.4% 250 120 300 -0.1% 51.8% 65.4% 12.1% -15.1% 13.6% 100 250 200 24.6%
21.9% -2.2% 185.4% (48%) 80 200 (62%) 150 (60%) (65%) (92%) (63%) -10.1% -21.9% (81%) -17.3% 60 (88%) 150 -38.6% (70%) 5.3% (93%) 100 (37%)-27.5% -46.0% 100 40 -65.4% -46.0% (100%) 50 (51%) (38%) (40%) 20 (35%) -54.2% 50 (63%) (37%) (30%) (19%) (12%) (7%) (8%) 0 0 0 2007 2009 2011 2013 2007 2009 2011 2013 2007 2009 2011 2013
Note: denotes yoy growth; number within parentheses are proportions. Source: Gartner, DisplaySearch, Daishin Securities Research Center 6 IT market outlook
. PC: Growth will continue, led by premium notebooks . TV: Hardware differentiation is in focus. UHD TV will outpace OLED TV. . Smartphones: Smartphones will serve as a gateway to the Internet of Things.
Shipment forecasts: TV vs. PC vs. Smartphones
TV PC Smartphones
(mn) (mn) CRT, etc. LCD Feature phones Smartphones (mn) 0.6% 2.3% Desktops Notebooks -3.3% 250 2,000 4.5% 400 3 3.1% 29 17 9 -64.6% 6.6% 200 -9.2% -0.8% 3.7% -48.1% 494 -40.8% 1,500 589 300 695 147 150 124 -16.0% 5.1% 136 128 880 4.7% 2.2% -7.3% -5.9% -3.1% 1,000 -15.3% 218 229 200 -21.0% 100 203 208 15.0% 1,321 1,148 -10.6% 8.4% 500 990 16.0% 50 3.0% 100 700 41.4%
0 0 2012 2013 2014F 2015F 0 2012 2013 2014F 2015F 2012 2013 2014F 2015F
Note: denotes overall market growth. Source: DisplaySearch, Gartner, Daishin Securities Research Center 7 Wearables and tablets
. Wearables: Smart watches and smart bands will drive market growth. . Tablets: Growth will fall short of expectations due to delayed replacement demand and lack of new applications.
Market outlook: wearables Market outlook: tablets
(mn) (mn) Bands Watches Glasses Others Tablet shipments 140 500
120 32 400 100
80 28 300 55 60 463 200 22 398 39 331 40 263 23 18 20 100 184 20 11 9 5 120 13 15 18 71 12 60 0 3 0 18 2013 2014F 2015F 2016F 2017F 2010 2012 2014F 2016F Source: Gartner, Daishin Securities Research Center Source: Gartner, Daishin Securities Research Center
8 Smartphones: IoT, big data, and cloud computing
. Smartphones will become the main gateway hardware platform for the Internet of Things. Better smartphones mean stronger customer loyalty. . Mobile technology, network development and wearable market expansion will spur the creation of new services.
What is the Internet of Things
Washing machine (remote control) IoT
Game/SNS Cloud Refrigerator (remote control)
Smartcar (Electric Vehicle)
Smart watch/ Band type TV
Google glass Healthcare Tablet PC
Source: Daishin Securities Research Center 9 Smartphone evolution (1) . Display technology is key to differentiation: Bigger screen sizes and higher-pixel camera modules propel high- resolution display development
Evolution of smartphone display panels
Year 2009 2010 2011 2012 2013 2014 Make Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Model Galaxy S1 Galaxy S2 Galaxy S3 Galaxy S4 Galaxy S5 Screen resolution 480x800(SD) 480x800(SD) 720x1280(HD) 1080x1920(FHD) 1080x1920(FHD) PPI 233 218 306 441 432 Make Apple Apple Apple Apple Apple Apple Model iPhone 3GS iPhone 4 iPhone 4S iPhone 5 iPhone 5S iPhone 6 Screen resolution 320x480 640x960(SD class) 640x960(SD class) 640x1136(HD class) 640x1136(HD class) 1242x2208(FHD class) PPI 165 326 326 326 326 461 Make LG Electronics LG Electronics LG Electronics LG Electronics LG Electronics Model Optimus One Optimus LTE Optimus G G2 G3 Screen resolution 320x480 720x1280(HD) 768x1280(HD) 1080x1920(FHD) 1440x2560(QHD) PPI 180 326 318 423 538
Note: iPhone 6 specifications are estimates. Source: Company data, Phonearena, Daishin Securities Research Center
10 Smartphone evolution (2)
. Smartphones increasingly adopt high-end components to support bigger screen sizes and versatile functions. . The growth of the Internet of Things requires bigger memory capacity.
RAMs for major smartphones
Year 2009 2010 2011 2012 2013 2014 Make Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Samsung Electronics Model Galaxy S1 Galaxy S2 Galaxy S3 Galaxy S4 Galaxy S5 RAM 512MB 1GB 1GB 2GB 2GB Make Apple Apple Apple Apple Apple Apple Model iPhone 3GS iPhone 4 iPhone 4S iPhone 5 iPhone 5S iPhone 6 RAM 256MB 512MB 512MB 1GB 1GB 1GB Make LG Electronics LG Electronics LG Electronics LG Electronics LG Electronics Model Optimus One Optimus LTE Optimus G G2 G3 RAM 170MB 1GB 2GB 2GB 3GB
11 Source: Company data, Phonearena, Daishin Securities Research Center Rising DRAM demand
Growing number of connected devices DRAM demand forecast
(GB million) Others Home appliancess Mobile PCs & accessories 10,000 31.4%
8,000 30.2%
22.9% 56.7% 6,000 31.9% 57.6%
59.6% 4,000 102.9% 23.1% 18.9% 11.6% 2,000 23.8%
0 2011 2012 2013 2014F 2015F
Source: industry data, Daishin Securities Research Center Note: Blue denotes change for PC and PC related products, while pink represents change for mobile devices. Orange denotes change for overall market. Source: Gartner, Daishin Securities Research Center
12 China’s smartphone market
Market share trends: Greater China manufacturers vs. the rest
Global market Chinese market Other market
Shipments from Greater China manufacturers Shipments from Greater China manufacturers Shipments from Greater China manufacturers (mn) Shipments from the others (mn) Shipments from the others (mn) Shipments from the others 350 700 1,200
600 300 (11%) 1,000 (89%) 250 500 (10%) 800 (30%) 200 400 (90%) (14%) (70%) (14%) 600 (23%) 150 300 (86%) (65%) (9%) (86%) (16%) (77%) (33%) 400 100 (35%) 200 (91%) (59%) (66%) (6%) (84%) (67%) (9%) (30%) (5%) (11%) (41%) (34%) 100 (94%) (6%) (7%) 50 (70%) 200 (91%) (90%) (70%) (95%) (30%) (94%) (93%) (10%) (89%) 0 0 0 2008 2010 2012 1H14 2008 2010 2012 1H14 2008 2010 2012 1H14
Note: Chinese companies include Huawei, ZTE, Xiaomi, Coolpad, Acer, Lenovo, HTC, and Yulong. Source: Gartner, Daishin Securities Research Center 13 New growth drivers (1): Smart cars
. Integration of mobile technology, IT, and hardware gives rise to new markets. . Smart car technology will be applied to gasoline vehicles in early stages before expanding to electric vehicles. . IT companies will supply core components of electric vehicles such as midsize and large rechargeable batteries, display panels, and communication modules.
Smart car systems and their major functions
Data transmission and Satellite Network base station reception (GPS) Server
Music, video streaming, and Vehicle Telematics, Navigation Active Safety System Navigation recharging information Data information Intelligent distributed information transmission and Bluetooth, CD, management Network management reception external input Data analysis unit HVAC maintenance Radar
Home electronic Vehicle control equipment Preventive function Car door control based on camera Vehicle information Charging Station Infortainment system User display smartphone
*HVAC: heating, ventilation, air conditioning 14 Source: Daishin Securities Research Center Electric vehicles (1)
IT technology integration (batteries, displays, inverters, motors, electronic components, etc.)
Structure
Source: Audi, Daishin Securities Research Center 15 Electric vehicles (2)
EV technology map
Source: Daishin Securities Research Center 16 Electric vehicles (3)
Characteristics of electrical vehicles by type
Type All electric vehicle Hybrid electric vehicle Plug-in Hybrid vehicle
Battery capacity 20~85 0.5~1.5 4.5~16.5 (kWh) internal combustion large-size internal combustion engine+mid- engine+midsize Composition battery+motor+rechargeable BEV_Telsa_Model S size battery+motor battery+motor+rechargeable battery with external power source battery with external power source Power motor engine+motor motor, engine(when a battery dies) electricity, fossil fuel (when a Fuel electricity fossil fuel, electricity battery dies) -Battery-powered drive - Higher fuel efficiency with an -No CO2 emission efficient, alternative use of both - A motor as a single power source Pros -A quiet engine motor and engine - Rechargeable battery with an -Longer life - Less CO2 emission than other external electric power source HEV_Toyota_Prius engine-powered vehicles
- Low battery capacity - Low battery capacity - High prices - High prices - High prices relative to other - Lack of charging stations and Cons - Lack of charging stations and engine-powered vehicles long recharging time long recharging time - Unsuitable for long-haul drive (bus, truck) PHEV_Chevrolet_Volt - Nissan Leaf, Tesla Model S, - Toyota Prius, Ford Fusion, - Chevrolet Volt, Toyota Prius Plug Model BMW i3, Mitsubishi I Hyundai Sonata In, Ford Fusion Energi
Source: Industry data, Daishin Securities Research Center
17 Electric vehicles (4)
Electric vs Gasoline
Model Nissan Leaf Toyota Prius Chevrolet Volt Hyundai Elantra (Avante) Type BEV HEV PHEV gasoline Length (mm) 4,445 4,480 4,498 4,550 Width (mm) 1,770 1,750 1,788 1,775 Height (mm) 1,550 1,505 1,430 1,435 Engine electricity, motor I4 1.8L L4 1.4L I4 1.6L Fuel electricity electricity gasoline motor, gasoline gasoline Battery capacity (kWh) 24.0 1.3 16.5 - Emission (cc) 0 1,798 1,400 1,591 Fuel efficiency(liter) 51.0km / L 21.0km / L 41.0km / L 14.0km / L Accommodation (persons) 5 5 4 5 Maximum power 80.0Kw(107hp) 99hp 149hp 140hp Engine front-engine, front-drive front-engine, front-drive front-engine, front-drive front-engine, front-drive Tire(inch) 16 15~17 17 14~17 Weight (kg) 1,493 1,395 1,721 1,250 Price around W27mn around W25mn around W28mn around W20mn
Note: Prices in North America have been converted to the Korean won Source: Companies’ homepages, Daishin Securities Research Center
18 New growth engines (2) : Wearables
Smart skin Bands Watches Apparel - “Print” device onto skin - Fitbit, NikeFuel - Samsung’s Gear series, - Smart, removable fabrics iWatch (set to be - Flexible circuit board - Tracks daily activity, sleep, - Flexible fabric circuit board launched) etc. - Technology is currently under - Applications: Healthcare, - Focuses on the linkage development - Capabilities are limited entertainment, information, etc. with smartphones Implantable devices - Currently available - Technology is in early stages of - Currently available - Flexible circuit board development Glasses - Implanting biometric chips - Google Glass, MS - Technology is currently under
- Will be available in 2015 development
19 Smart watch
Specifications
Samsung Samsung Samsung Samsung Company Qualcomm LG Electronics Motorola LG Electronics Apple Sony Electronics Electronics Electronics Electronics Model Toq Gear 2 Gear 2 Neo G Watch Gear Live moto360 Gear S G Watch R iWatch Smart watch 3 To be released in To be released in To be released in Release date Dec 2013 Apr 2014 Apr 2014 Jun 2014 Jun 2014 To be released To be released 2014 Oct 2014 4Q14 Size (mm) 43.3x47.6x9.96 36.9x58.4x10.0 37.9x58.8x10.0 37.9x 46.5x 9.9 37.9x 56.4x 8.9 N/A Weight 90.8g 68g 55g 63g 59g N/A AP 200MHz ARM 1.0 GHz 1.0 GHz 1.2GHz 1.2GHz N/A Core Single Dual Core Dual Core Dual Core Quad Core N/A - 2.0” - Plastic AMOLED OLED RAM 512MB 512MB 512MB 512MB 512MB 512MB - Flexible curved AMOLED - Higher resolution display -1.2GHz snap display LCD 1.55" Mirasol 1.63" Super AMOLED 1.63" Super AMOLED 1.65" IPS LCD 1.63" Super AMOLED 1.5 IPS LCD dragon 400 - Wireless charging - Tizen OS - Sapphire glass Resolution 288x192 320x320 320x320 280x 280 320x 320 320x290 -Waterproof/ dust Camera None 2.0 M None None None None - S Health resistant
300 mAh (low usage 300 mAh (low usage Battery 240 mAh 400 mAh 300 mAh N/A up to 6 days) up to 6 days)
Price $350 #300 $200 $230 $200 $250
Source: individual smartphone makers, Daishin Securities Research Center 20 Smart watch
. Smart watches are emerging as a new category of IT devices . Major features include 1) health management 2) supplements to smartphones, tablets and other wearables and 3) unique functions of its own
Smart watch features
Source: Daishin Securities Research Center 21 Glass and head mount wearables
Glass and head mount wearables
Source: Daishin Securities Research Center 22 New growth catalysts (3): Smart home
. The Internet of Things drives a paradigm shift in the conventional market for TV, lighting and home appliances. . Smartphone applications are growing in variety: Software and content are becoming more important than hardware
Smart home concept
Source: Industry data, Daishin Securities Research Center 23 Platform company growth strategies (1)
. Internet of Things: Companies with their own OS and platform will outshine peers and lead growth . Hardware makers (smartphones) will become less differentiated vs. software providers . A paradigm shift will create new businesses
SW/HW platform companies are offering more services
Source: Daishin Securities Research Center 24 Platform company growth strategies (2)
Google, Apple, and Samsung Electronics M&A deals in 2014
Acquirer Announcement Target companies Business Payment method Status Google 2014-08-22 Gecko Design Inc IT device design Undisclosed Pending Google 2014-08-06 Tinker Square Inc Mobile messenger Undisclosed Pending Google 2014-08-06 Directr Inc Mobile video Cash Completed Google 2014-07-23 DrawElements Ltd Image processing SW Undisclosed Pending Google 2014-07-01 Songza Media Inc Music streaming Undisclosed Completed Google 2014-06-25 Appurify App performance test Cash Completed Google 2014-06-21 Dropcam Inc Home security system Cash Pending Google 2014-06-19 mDialog Corp Video platform Undisclosed Completed Google 2014-06-10 Skybox Imaging Inc Satellite image Cash Pending Google 2014-05-19 Enterproid Inc Mobile device management Undisclosed Pending Google 2014-05-16 Quest Visual Inc Augmented reality Undisclosed Completed Google 2014-05-07 Stackdriver Inc Cloud service Undisclosed Completed Google 2014-05-06 Adometry Inc Marketing analysis Undisclosed Completed Google 2014-04-14 Titan Aerospace Corp Drones Undisclosed Completed Google 2014-02-21 Spider.io Online ad fraud detection Undisclosed Completed Google 2014-02-16 SlickLogin Password technology Undisclosed Completed Google 2014-01-27 DeepMind Technologies Ltd Machine learning Cash Completed Google 2014-01-15 Impermium Corp Cyber security Undisclosed Completed Google 2014-01-13 Nest Labs Inc Indoor temperature control Cash Completed Apple 2014-07-28 Booklamp E-book search Undisclosed Completed Apple 2014-06-06 Simple Rules Inc Online music file Undisclosed Completed Apple 2014-05-28 Beat by Dre Headset, earphone Undisclosed Completed Apple 2014-02-22 Burstly Inc App data analysis Undisclosed Completed Apple 2014-01-06 SnappyLabs LLC Camera application Undisclosed Completed Samsung Electronics 2014-08-19 Quietside Corp Heating, air conditioning and hot water making Undisclosed Pending Samsung Electronics 2014-08-14 SmartThings IoT platform Undisclosed Pending Samsung Electronics 2014-03-20 Sunedison Semiconductor LLC Semiconductor material Undisclosed Pending
Source: Bloomberg, Daishin Securities Research Center 25 Hardware companies: Growth hinges on product line-up upgrades . The success of wearable devices depends on smartphone brand power (smart device portfolios) . Samsung Electronics: The company has the biggest smartphone market share. Its strategy is to flood the market with product offerings to overwhelm competition . Apple: Brand loyalty is high. Apple has the biggest app store and the biggest pool of app designers, which enables earlier app launches than rivals. . Second-tier companies: The focus is primarily on smartphone ecosystem formation, which is being delayed
Product line-ups
Samsung Electronics Apple LG Electronics Huawei Lenovo
Smartphone Smartphone Smartphone Smartphone Smartphone Galaxy S4 mini (4.3”) iPhone 5S (4.0”) L series Ascend Y330 (4.0”) S660 (4.7”) Galaxy S5 (5.1”) iPhone 5C (4.0”) (3.5”, 4.5”, 4.7”) Ascend P7 mini (4.5”) S860 (5.3”) Galaxy Grand 2 (5.3”) iPhone 6 (5.5”, 4.7” estimate) F series (4.5”, 4.7”) Ascend P7 (5.0”) Galaxy Note 3 (5.7”) G3 (5.5”) Tablet Galaxy Mega (6.3”) Tablet G Pro 2 (5.7”) Tablet A7-50 (7.0”) iPad Air (9.7”) G-Flex (6.0”) MediaPad X1 (7.0”) A8 (8.0”) Tablet iPad mini2 (7.9”) MediaPad M1 (8.0”) A10 (10.1”) Galaxy Tab 4 Tablet (7.0”/8.0”/10.1”) MP3 G-Pad Wearable PC (7.0”/8.0”/10.1”) Talkband Wearable PC Gear 2, Gear 2 Neo, Gear Wearable Fit TV (set-top box concept) G-watch
PC PC
TV TV (LCD, UHD, Curved UHD) (LCD, UHD, UHD OLED)
Home appliances Home appliances
26 Source: Daishin Securities Research Center APPENDIX ) Smartphone market
Global smartphone market share (quarterly) Global smartphone market share (yearly)
Samsung Electronics Apple Samsung Electronics Apple Huawei Lenovo 40% Huawei Lenovo 40% Xiaomi LG Electronics Xiaomi LG Electronics 35% 35%
30% 30%
25% 25%
20% 20%
15% 15%
10% 10%
5% 5%
0% 0% 2008 2009 2010 2011 2012 2013 2Q14 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 Source: Gartner, Daishin Securities Research Center Source: Gartner, Daishin Securities Research Center
27 APPENDIX ) Smartphone OS market share
Global smartphone OS market share (quarterly) Global smartphone OS market share (yearly)
Others Blackberry OS Microsoft Apple iOS Android Blackberry OS Microsoft Apple iOS Android 100% 100%
80% 80%
60% 60%
40% 40%
20% 20%
0% 0% 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 2009 2010 2011 2012 2013 2Q14
Source: Gartner, Daishin Securities Research Center Source: Gartner, Daishin Securities Research Center
28