Samsung Topples Motorola as No.1 in the U.S.

Posted by: Ihlwan Moon on November 7, 2008

Samsung Electronics recorded an impressive performance in the U.S in the third quarter of this year, seizing the bragging right to be the No.1 brand in the world’s largest mobile phone market. Researcher Strategy Analytics said on Nov. 7 South Korea’s Samsung overtook Motorola in the American company’s home turf for the first time in history in the three months to September. During the period, Samsung grabbed a market share of 22.4% in the U.S., against 21.1% for Motorola and 20.5% for LG Electronics of Korea.

There are two main factors for the rise of Samsung. The biggest reason, of course, is ever-weakening strength of Motorola’s mobile phone business. Another major driver of Samsung’s growth is its aggressive marketing, which has been fueled by a weak Korean currency. The won that traded at 1,324 to the dollar late on Friday has lost 29% of its value against the dollar so far this year to allow the company to cut prices of its products in export markets without hurting profitability.

The big question is if Samsung could maintain its double-digit profitability once the currency regains its stability. Many economists predict the won will probably go back to between 1,100 and 1,200 to the greenback next year, when Korea is expected to report a current account surplus after an estimated deficit of around $10 billion this year. “I think Samsung is making a high-risk, high-return bet,” says handset analyst Thomas Kang at Strategy Analytics.

Samsung’s aggressive marketing has paid off at least in the short-term. Its global sales hit 51.8 million mobile phones in the third quarter, a quarterly record and up 13% from the previous quarter. That’s almost triple the pace of growth for the global handset market, which grew 5%. Samsung officials have said the cash-rich company aims to increase its market share by keeping investing in R&D and marketing while its financially-troubled rivals are cutting back.

Reader Comments

Maybe not

November 7, 2008 7:21 PM

Korean currency will be weak as overall Korean economy will be weak, except those export oriented companies.

Kevin

November 12, 2008 8:08 AM

Proud to be Korean these days. Samsung #1 in mobile phones, #1 in TV's... What's next? Home appliances?

With the US big three automakers struggling does Hyundai have a chance to gain market share? I never thought Samsung would ever be #1 in my lifetime so who knows about Hyundai.

Esayas

November 19, 2008 6:42 PM

well done ,Samsung.I just feel bad for Americans cause they are good at starting business but they finally hand it over to other competitiors----does this mean they are into other profitable businesses --may be!!!

GUNN CHEE MING

November 26, 2008 12:30 AM

Samsung's line of models, strategies, back up and many more make it more attractive to the potential buyers as compare to Motororola. Buck up Motorola.

kim

November 30, 2008 12:42 AM

Well, the problem is not Motorola alone; the whole US industries are lack of good designs.

The main problem, US always underestimate other countries, plus the poor in K12 education, more and more US students could not graduate from meager standard high schools.

The only big in thing is Wall Street, who knows short term profits, scarify long term goals and greed that destroy US economy.

Where are our leaders, what are they doing? Are they sleeping with those lobbies? When are you going to help us?

samsung no1

December 8, 2008 7:10 AM

Yes, I love my samsung phone, and samsung deserves its no.1 title

The Way I See It

December 8, 2008 6:37 PM

For so long the US has coasted along with below average products and poor designs.

Take the auto industry. Benz is developing Bluetec diesel cars, BMW is doing hydrogen, Toyota and Honda are pumping out hybrids...the list goes on. What is America doing? Releasing SUVs and cars like the Dodge Challenger that gets 13 miles per gallon. Then when crap hits the fan they want to place focus on a Chevy Volt that we won't see until 2012.

This is the same thing that happened during the muscle car era when people opted for smaller Asian cars. America still has not gotten the hint...leave the big trucks alone.

Motorola has been bleeding since the RAZR and when Nextel fell off. This is the price of lack of innovation.

Make products people want to buy and you wouldn't be dying. Now its time to destroy and rebuild.

eunji

December 12, 2008 7:08 PM

proud of being a korean!!!
samsung is not only no. 1 in us..!! also no.1 in whole world~~

thesedays whole world's economy is going slow down.. bt korea will be able to overcome itself soon .. and it can be happen by such global company like samsung , lg, hyundai..etc
!!!!!!! love korea..^^

jimmy

December 12, 2008 10:06 PM

Samsung sure has come a long way.

When Samsung first started selling on the foreign market about some 20 years ago, its products were so crude. And the name then was so jarring to the foreign ear!

But was it not in the early 2000's after the Asian financial crisis of 1997 that Samsung first came out with its first mobile phone? And it was at this point that Samsung's image suddenly become upmarket and associated with sophistication overnight.

I respect the Koreans. They just plod on, persevere with stamina and grow organically till they exceeded all the competition. Which can't be said for some countries' brands which come into the market, exist for a while and then disappear to dunno where eg. (eg. Ningbo Bird, TCL's apperance here in Malaysia)

Jack

December 18, 2008 11:05 PM

Samsung, proud to be part of the Korean Government.

Jonus

December 27, 2008 10:46 PM

Samsung marketing team too focus on US market. I don think their can make it big in Asian country. It's still lack behind Nokia and Sony Ericsson in term of branding security in most of Asian country.
Nokia was the prefer choice due to the quality and Sony Ericsson due to the stylist design. As for Samsung, the quality is there, LG the stylish design appear but the branding confidence was damn weak. Totally no confidence to buy these two korean brand phone in my country. Even the new comer HTC is doing preety well then them (although not same in term of product).
As for the Korean Car .... I don't think their can match the Japanese car. Just concentrate on their Korean market and make the oversea market as a alternative revenue sources for their P&L result..It might be the winner but not too soon

LUCA

December 30, 2008 4:15 AM

compliments to Samsung for being competitive only thanks to a weak yuan. I live in Italy and I own a Motorola because Samsung are more expensive and complicated to use, and design... well italians can really teach about it and by no way korean design is... no design; by comparison Motorola has personality . I own a GM Opel car, a very high quality small economic car with a super competitive price, and you can't compare it to low price but very very low quality Hyundai. So what? May be this perios is good for Korea in some industrial sectors thanks to a weak curency, but what happens when it changes? About cars: do you know that in neutral market like Europe Toyota is in veru deep troubles while Ford is soaring because of very high quality and trendy design of its cars? The same for GM Opel thanks to ultra low emission of polluting dust?...

To Kevin

December 31, 2008 9:44 AM

To Kevin,
It is not only #1 in Mobile phones and TVs, but also in memory chips, shipbuilding, and consumer electronics as a whole. It is also top 5 in construction and steel industries.

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