Samsung Electronics Co., Ltd. (KRX:005930) has transformed itself from a lower-end tech device manufacturer into one of the top smartphone manufacturers, taking market share away from some of the established giants and developing its own consumer brand, says Edmund Harriss, Investment Director and Fund Manager at Guinness Atkinson Asset Management.
“In the consumer area, it is the smartphone business that is generating the most interest and the highest level of sales. Samsung Galaxy is a handset that has performed extremely well. They have taken extra market share away from Apple (AAPL). They also have considerable strength in their memory business, in their TV business and in other consumer durables,” Harriss said.
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Harriss says the idea of Asian companies being great manufacturers but bad developers of consumer brands is outdated, and he says Samsung is now competing with more established brands with designs that carry pricing power, and the company is not relying on just manufacturing scale.
“In the past, Samsung produced rather lower-end consumer goods. You’d much prefer, as an individual, to go and buy something from Sony (TYO:6758) or Panasonic (TYO:6752). That is no longer the case. Samsung produces some stylish designs, and they have benefited on the back of that from very high sales and high pricing power, which is brand-based, not simply based on ability to manufacture in scale,” Harriss said.
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