About the Samsung group:
The Samsung group is originally from Korea but has developed subsidiaries throughout the world over the years particularly in Europe with Samsung France. Its activity, which generates hundreds of billions of dollars every year in turnover, is particularly related to the manufacturing and sales of electrical components and computer materials.
In recent years it has started to be active in the mobile phone industry which has enabled it to widen its range of activities and thereby generate more profits.
Samsung’s main competition:
Over the last few years, Samsung has mainly focused in the production and sale of mobile smartphones and has become number one in its business sector, beating other big manufacturers. It is therefore in this business sector that you must look for Samsung’s most dangerous competition. In order to help you carry out a comparative analysis and to open a position in the market in the best way possible way, we invite you to discover Samsung’s main competitors on the market:
- Apple manufacturer is currently ranked the second biggest mobile telephone manufacturer, holding 14.1% of market shares.
- Next comes Chinese manufacturer Huawei which holds the third place with 8.9% of market shares.
- Xiaomi ranks fourth with 4.9% of market shares.
- Finally, Lenovo is ranked fifth with 4.8% of market shares.
- Thus, Samsung remains on top with no less than 21.7% of market shares in 2016.
Samsung’s main partners:
Thanks to various partnerships, Samsung has been able to maintain a good reputation in this business sector. Here they are in further detail.
- In 2017, Samsung established a partnership with Apple for the creation of a curved screen for the next iPhone.
- In 2017, Samsung also signed a deal with Tesla regarding the design of its mobile phone’s batteries.
- In the same year, Samsung struck a deal with Google in the field of artificial intelligence.
- Finally, the company also has an extended partnership with Microsoft in the field of professional mobility which was renewed in 2017 in view of new projects.
Important stock market data relating to Samsung shares:
Although it is important to really understand the dynamics that caused the different trends observed by Samsung shares in the past such as the most influential events used in the fundamental analysis or the major technical data, it is also important to know some basic information such as the following:
- In 2017 the total stock market capital of the Samsung Group amounted to 200 billion Euros.
- The price of Samsung shares is currently quoted on the American Nasdaq All Markets stock market.
- Samsung Group shares are also included in the composition of the Nasdaq 100 American stock market Index.
- The shareholdings of the group are comprised as follows: 13.5% Samsung Electronics, 9.03% National Pension Service of Korea, 7.55% Samsung Life Insurance, 4.25% Samsung C & T Corp, 3.54% Kun-Hee Lee PhD, 1.40% the Vanguard Group, 1.32% Samsung Fire and Marine Insurance, 1.28% BlackRock, 1.24% NN Investment Partners BV and 1.13% Capital Research & Management Co.
Financial and economical history of the Samsung Company:
To better interpret the different price movements that have marked the growth of the Samsung share price it is necessary to delve into the recent history of the group’s financial and economical activities and events. Here are the most important dates to remember:
- In 2011, Samsung sold its hard disc activities to Seagate Technology for 1.4 billion dollars partly in shares.
- In 2014 the group commenced the construction of a smartphone factory in Vietnam. The same year, the group announced the sale of its optical fibre subsidiary to the Corning Company for an unstated amount. It then announced the redundancy of 10,000 workers in South Korea and 9-10% of its employees in China.
- In 2016 Samsung purchased a 37.5% shareholding of Samsung Electronics in Samsung Card for 1.3 billion dollars. HP purchased, in the same year, the printing activities of the group for 1.05 billion dollars. Samsung was also ordered to pay a fine of 120 million dollars to Apple for patent violations. Other difficulties occurred following incidents caused by the Samsung Galaxy Note 7 which was recalled and sales were stopped. In November of the same year Samsung purchased the Harman Company, a specialist in audio-visual equipment integrated into cars.
By analysing how these different events have influenced the price of Samsung shares you will be in a position to better foresee the future movements of this asset on the markets.
Should you take a long term position on the Samsung share price?
If you plan to buy Samsung shares to add to your investment portfolio or take position on purchasing this asset using CFDs you are probably considering the perspectives relating to the future of this company. As you may know through the various information we have just provided, the Samsung Company has numerous advantages that will contribute to its continued prosperity and holding its position as one of the leaders in its principal activity sectors.
Although Samsung nowadays boasts a range of products that benefit from a high popularity in the public eye, nothing guarantees its continued success over the long term. The company, as with all the large groups in the technological sector, could at any time experience a decrease in esteem from the consumers. A simple problem during the launch of a product in which the company has heavily invested such as a new smartphone could in fact have dire consequences for the company’s profits, as well as its share value particularly as the Samsung share price is particularly speculative in nature.
But to predict the future variations of the Samsung stock, it is necessary to be based on different analyzes. Over time, Samsung has shown itself adept at diversifying its product range and nowadays we find the brand present in various product sectors such as televisions, computers, smartphones and household electrics with a highly positive reputation overall. Samsung has in fact done everything possible to increase the popularity of their products, notably in terms of publicity campaigns using different types of media and particularly for the Galaxy range of smartphones. The company actually allocates over 30 million Euros per year to advertising.
The arguments in favour of a rise in the Samsung share price:
Concerning the factors favourable to a rise in this asset price we note the following in particular:
- Firstly, one of the principal arguments in favour of a long rising trend of the Samsung share price relates of course to the long experience of this company in its activity sector. The Samsung Company has in fact been present in this market for several decades now and has succeeded in developing an excellent brand image as well as a worldwide reputation for superior knowledge and capabilities in its chosen sector.
- The marketing strategy followed by Samsung should also be noted for its efficacy. In fact, this company has done everything possible to target a wide range of clients by developing a varied assortment of products with numerous models and options at a wide range of prices. This in turn has enabled the company to significantly increase its sales achieved from each of its new devices which are available in different models of which the price varies according to the options or size.
- The Samsung Group has also succeeded in positioning itself in an advantageous manner in certain specific parts of its chosen sector. We can notably point out a real advantage of this company in terms of its position among the largest manufacturers of televisions and mobile telephones worldwide. In this manner it benefits from a position of strength for negotiations and an excellent presence on the international market.
- Still on the subject of factors in favour of a rise in the Samsung share price, we can also mention the fact that this company has shown itself capable of making high quality strategic alliances with other large high tech companies. It has also shown its ability to introduce new increasingly popular and perfect models onto the market while decreasing production costs to a minimum to favour its margins and increase the possibility of reducing its sales prices.
- This brings us to another favourable factor for the Samsung share price which relates this time to the innovative abilities of this group. Samsung has in fact greatly invested in research and development and is renowned for regularly introducing new and innovative product models onto the market. In this manner it retains a certain dynamism and maintains its leadership against its major competitors.
- The diversification of the Samsung Group’s activities is another undeniable advantage. The group is in fact above all renowned for the products it creates, manufactures and sells including telephones, computers and household appliances, but it is also a large manufacturer of parts and accessories such as LCD monitors, memory cards and other components destined for other manufacturers, sometimes even the direct competitors to Samsung.
- In the mobile telephone sector generally called smartphones we can also note that Samsung is currently the leader in terms of sales just above its major competitor Apple. This success is notably due to its Galaxy series of products which continues to benefit from a high degree of popularity on this market. This range of smartphones was in fact the first to effectively create competition for the iPhone telephones produced by Apple.
- Another indirect argument that should be considered before launching into trading in this share price concerns the work force of the Samsung Company. This company currently employs over 400,000 people around the world which of course avails this company of a significant strength in terms of production as well as sales. The size of this workforce is therefore also a significant indicator of the success enjoyed by this company and its strength in terms of development.
- And finally, the last argument in favour of a rise in the Samsung share price concerns the international status of this company which sells its products worldwide. Samsung is particularly well positioned in the emerging markets such as Asia to which it is close geographically speaking, in this area it is one of the leaders in terms of high tech product sales.
The arguments in favour of a drop in the Samsung share price:
As you may have noted from reading the precedent arguments, there are numerous factors in favour of a long rising trend in the Samsung share price. However, the situation is not that simple as the group also has certain weak points and factors that could negatively impact the positive trend in its price. We now offer you the opportunity to learn about the two principal arguments in favour of a drop in the Samsung share price.
- Firstly, we can of course note the strong competition to the Samsung Group as its major handicap. Since the arrival of smartphones in the mobile telephone sector, the market share of this company in this sector has fallen overall even though Samsung remains the leader. This is notably due to the entry of other companies in this sector and the competition they represent such as the Korean firm Huawei that manufactures advanced technological products at a slightly lower price than Samsung. In this highly specific market context, the possibilities for growth and development of the Samsung Group remain fairly limited.
- And, to conclude, the second argument in favour of a drop in the Samsung share price relates this time to the numerous problems that this company has encountered with some of its patents that have been contested by its long time competitor Apple. Although these files are now classified the investors are still anxious about the possibility of new and similar scandals in the future and can at times appear reticent to take buying positions on this asset due to this lack of confidence. Also, these patent disputes have also contributed to a downturn in the Samsung brand image as perceived by the general public.