Samsung in consumer electronics: from products to ecosystems

Samsung had a strong 2021, with strong demand continuing to be fueled by pandemic-related interest in TVs, smart wearables and headphones. However, Samsung continues to feel increasing competition from China, especially in smartphones.

Samsung’s revenue skyrockets in 2021 after first pandemic shock

After the disruption caused by the pandemic for smartphones, the key category for Samsung, in 2020, the company managed to generate strong double-digit growth in 2021. In particular, Samsung TVs, tablets and smart wearables experienced a continued pandemic-related increase, as consumers shifted out-of-home spending towards electronics and appliances. The fast-growing headphone category, especially TWS headphones, has contributed to Samsung’s growth in wearable electronics. The acquisition of Harman in 2017 with its JBL brand helped Samsung increase its share in this category, especially in European markets. Samsung also benefited strongly from its semiconductor and memory business, the fastest growing division in 2021, supported by global demand for PCs, gaming laptops and new 5G product launches, including including smartphones.

Source: Euromonitor Consumer Electronics Research, 22nd Edition

Retention of the ecosystem and provision of a range of services

Samsung is investing in building a cross-divisional ecosystem, starting with its Galaxy ecosystem, as retaining the ecosystem becomes more crucial than keeping consumers in a particular product category. Also pushed by its closest rival Apple, Samsung is expanding the services and content offered on its smart TVs.

Samsung invests heavily in R&D and directly owns many parts of the production chain. The company has its own foundries and display panel manufacturing capabilities as part of its Device Solutions unit. This benefits Samsung in terms of early access to new technologies and ensures better cost control than if it were to buy components from its competitors.

image5mwb.pngSource: Euromonitor Consumer Electronics Research, 22nd Edition

From products to ecosystem: Will Samsung leverage its broad product portfolio?

Samsung, however, has chosen a different path in terms of content and revenue generation from services compared to rival Apple. While Apple TV+ is a monthly paid service, mostly offering its own content, Samsung’s Plus TV content service is a free, ad-supported service, mostly offering third-party content. It expanded to more regions in 2021, now available in 23 countries, and continues to add services. In 2021, for example, Canela.TV became available, one of the first AVOD streaming services for American Hispanics.

Generating considerable interest, Samsung also announced Samsung Gaming Hub, which is expected to launch later in 2022 on its smart TVs, in partnership with NVIDIA GeForce NOW, Stadia and Utomik. The game streaming platform will allow users to discover and stream video games and launch them quickly with connected consoles. As gaming experiences dynamic growth around the world, this could give Samsung a huge competitive advantage, provided it continues to expand its partnerships with major console players, such as Microsoft and Sony.

For more information, read our global company profile, Samsung Corp in Consumer Electronics (World).


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