MIEC Project TB03 Group 3 by Teng Elaine

Article 3: Samsung sharp drop in profit

tengelaine2012 — 2019-01-11 05:01:30 UTC

According to the latest article on BBC news, Samsung is expected to have a decrease or slow down in the demand of smartphones - even after the release of the newest model of Samsung Galaxy 9.

Also, their memory chips that was supposedly high in demand in the previous years and served as an earnings booster , it have also experienced slow down in the demand leading to a sharp profit drop.

All these was caused by the competition from different rivals especially Apple and other China rivals. The forecasted trend line shows a gradual decrease stock prices which also means that the profits are decreasing due to the drop in demand of the Samsung goods.

With the drop in demand of memory chips, which is a change in the number of buyers overall, there is a change in the non-price determinant of demand.

Article 2: Demand and Supply for India

tengelaine2012 — 2019-01-11 05:06:03 UTC

Demand & supply
There is a change in a non-price determinant of demand, which is the price of related goods, substitute of Xiaomi for Samsung. Because Xiaomi is relatively cheaper than Samsung, consumers would prefer to buy from xiaomi instead.

Market equilibrium.

There is a downward pressure on the price as Samsung was forced to lower price to compete with other budget brands for greater market share.

China's brands such as Xiaomi is challenging Samsung in the lower priced phones market in India.

Samsung India's net profit fall by 11%, but revenues grew by 10%.

This drop in net profit is because Samsung focuses on launching price-aggressive smartphones at a relatively lower margin to combat Xiaomi, Oppo Vivo and OnePlus.

Samsung is still maintaining its revenue lead in the India smartphone market.

However, as of period from July to September, Counterpoint estimates that the Chinese company Xiaomi had 27% share followed by Samsung with 23% share.'

According to https://www.counterpointresearch.com/india-smartphone-share/

The Indian mobile phone market grew by 48% YoY in Q1 2018 driven by strong demand from the featurephone segment. The smartphone market remained flat YoY.
The performance of Chinese brands remained strong, accounting for 57% of the total smartphone market in Q1 2018, up from 53% during Q1 2017. This is the highest ever contribution by Chinese players in the Indian smartphone market.
Xiaomi recorded its highest ever shipments in India during Q2 2018. The growth can be attributed to its strong product and supply chain strategy that has allowed it to launch products with a longer shelf-life than its competitors and that too in the important sub INR 10000 (

zhuzirui99 — 2019-01-11 05:58:02 UTC

Article 1: Price elasticity of Samsung phones

tengelaine2012 — 2019-01-12 06:32:43 UTC

According to the articles, not just Samsung phones but, all smartphones prices will continue to hike mainly due to speculations of an increased integration of more advanced technology thus contributes to the fast that smartphones are habitually consumed. Consumers have also showed that their appetite for smartphones and their willingness to pay more for them is growing.

While smartphones are a necessity, for many, it always functions as a form of social status display. Having a expensive and, more often than not overpriced, better looking phone displays your financial status thus, making it a luxury causing high-end expensive smartphones to be a necessity for many. This tremendously helps Apple sell their iPhone XS which currently stands as the most expensive phone in Australia costing $1829. Even though the price tag is higher than that of a computer, a smartphone is much easier to showoff one's social economic status rather than a computer that sits at home or a laptop that is not brought out often. As a result, causes smartphones such as Samsung to be price inelastic.
Smartphones are habitually purchased and consumed as stated in the article with “Consumers have also showed that their appetite for smartphones and their willingness to pay more for them is growing.” This means that even though the prices are rising, most consumers do not seem to mind and are still willing to pay and purchase at a higher price.

On the other hand, the availability of substitutes such as Oneplus, Oppo, Xiaomi and Huawei, which offers similar or better performance specifications, does contribute to making the demand for higher costing smartphones such as Samsung, elastic.

zhuzirui99 — 2019-01-15 15:04:44 UTC

Appendix 4

chloeong1997 — 2019-01-15 16:05:16 UTC