Samsung enjoyed a stellar 2021, as high demand continued to be driven by pandemic-related interest in TVs, smart wearables and headphones. However, Samsung continues to feel intensifying competition from China, especially in smartphones.
Revenue soars for Samsung in 2021 after the initial pandemic shock
After the disruption the pandemic caused for smartphones, the key category for Samsung, in 2020, the company managed to generate strong double-digit growth in 2021. In particular, Samsung TVs, tablets and smart wearables saw a continuous pandemic-related uplift, as consumers shifted their out-of-home spending towards electronics and appliances. The fast-growing headphones category, especially TWS earbuds, contributed to Samsung’s growth in portable electronics. Acquiring Harman in 2017 with its brand JBL helped Samsung to grow its share in this category, especially in European markets. Samsung also strongly benefited from its semiconductor and memory business, the fastest growing division in 2021, supported by global demand for PCs, gaming laptops, and new launches of 5G products, including smartphones.
Source: Euromonitor Consumer Electronics research, 22ed
Ecosystem retention and offering a range of services
Samsung is investing in building a cross-division ecosystem, starting with its Galaxy Ecosystem, as ecosystem retention becomes more crucial than keeping consumers in a particular product category. Also prompted by its closest rival Apple, Samsung has been widening the services and content offered on its smart TVs.
Samsung is investing heavily in R&D and directly owns many parts of the production chain. The company has its own foundries and display panel manufacturing capabilities under its Device Solutions unit. This benefits Samsung in terms of having early access to new technologies and ensures better cost control than if buying components from its competitors.
From products to ecosystem: Will Samsung leverage its wide product portfolio?
Samsung, however, has chosen a different route in terms of its content and revenue generation from services compared with its rival Apple. Whereas Apple TV+ is a monthly paid service, offering mainly its own content, Samsung’s Plus TV content service is a free, ad-supported service, offering predominantly third-party content. It expanded to more regions in 2021, now available in 23 countries, and continues adding services. In 2021, for example, Canela.TV became available, one of the first AVOD streaming services for US Hispanics.
Generating considerable interest, Samsung has also announced Samsung Gaming Hub, set to launch later in 2022 on its smart TVs, partnering with NVIDIA GeForce NOW, Stadia and Utomik. The games streaming platform will allow users to discover and stream video games and quickly launch them with connected consoles. As gaming is growing dynamically worldwide, this could give Samsung a huge competitive advantage, provided it continues to expand its partnerships with leading console players, such as Microsoft and Sony.
For further insight, read our Global Company Profile, Samsung Corp in Consumer Electronics (World).