Samsung has maintained strong consumer loyalty and a large amount of the market share in South Korea for several years because the country has always been its home market. Samsung accounts for a large part of the country’s GDP and the government of South Korea even grants the company several tax deductions and subsidies to help it out. It has been believed that South Koreans have a strong sense of patriotism instilled in them and feel that it is necessary to support those industries that started off in their home market. All of the support the government provides is essential for Samsung to ward off the influence that Apple could have on South Korean consumers.
Recently, the iPhone’s widespread appeal became evident in South Korea when the market shares for both companies were released a few months ago. In a year, Samsung had faced a considerable drop in its market share and Apple had experienced a large gain in market shares. Several incidents and reasons could be linked to this change based on several studies and surveys, South Koreans seem to be more interested in buying more luxury items now and are becoming increasing likely to buy more premium and expensive brands. Additionally, Apple’s devices and technology are viewed as luxury items worldwide and could result in more South Koreans buying Apple products. Furthermore, Apple’s hardware and design is highly advanced and aesthetically appealing. Using such expensive marketing strategies and expensive items to create their devices is alright for Apple since they sell their phones at a relatively high price. However, because Samsung tries to keep up with Apple they spend a large amount on hardware but sell their phones at a much lower price resulting in a lower profit margin.
A recent study showed that the new iPhone 6 beat Samsung’s S5 in nearly every attribute. In terms of design, operating system, speed, and size, Apple came out on top and garnered an above average response. The S5 received comparatively less attention and was given a below average response. This seems odd considering that Samsung tries to keep up with Apple by creating phones that can compete with the sleekness and effectiveness of the iPhone.
Overall, all these consumer trends and data point toward a huge blow for Samsung. South Korea provides Samsung with a huge boost in terms of approval and profits. If Samsung were to lose all of this to Apple, it would be hard to see how Samsung could bring themselves back to a level to compete effectively in the future. They would be placed in the low end of the market for quite some time.