Corporate Strategies in Consumer Electronics

November 2021

Global tech companies face a supply chain crisis and the only way for them to be competitive is to innovate and change their business model. This report sets out to examine the strategies employed by top players, as well as new players on how they stay competitive during this challenging time.

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Key Findings

Affordable flagship models

BBK Electronics overtook Samsung as the largest smartphone manufacturer in the world through its “flagship killer” strategy; positioning the phones with high-end performance but mid-tier prices to undercut the competition. It is expected that while the strategy may be effective, it will not be a long-term strategy.

Research and development effort leveraged by upstream semiconductors

The increasing research and development budgets from semiconductor companies such as NVIDIA and AMD showed the importance of producing high-performance and power-efficient units. It is expected that the gap between companies with the capability to produce proprietary SOC and their competitors will widen.

New business models for growth

Large tech companies turned to providing more services to end-users as a way to generate revenue. Apple’s revenue generated from services grew from 11% in 2016 to 20% in 2020. Cloud storage, music services and entertainment is seeing great potential for growth for tech companies.

“Right to repair”

The conversations around “right to repair” have grown over the years as consumers have requested that manufacturers design their products in a way they are more serviceable; some start-ups have attempted to design such products as a unique selling point.

 

Introduction

Key findings

Global Outlook

Sales of consumer electronics jumped in 2021 amid COVID-19
Cost-conscious consumers benefits Chinese phone brands

Leading Companies and Brands

Leading companies in computers and peripherals
R&D costs allocated upstream to chip manufacturers
Market strategy of top three laptop manufacturers
Leading companies in portable consumer electronics
iPhones growing strongly in China
Premiumisation hurts Sony share in headphones market
Leading companies in in-home consumer electronics
Koreans continue to dominate TV production

Key Trends Shaping Consumer Electronics

BBK Electronics overtakes long-time leader Samsung
BBK brands are undercutting Samsung

Key Trends Shaping Consumer Electronics - Affordable flagships

Flagship killer is a sprint, not a marathon
Vertical integration to ensure product design flexibility
Vertical integration extends beyond semiconductors
Korean companies have a wide spectrum of business units
“Right to repair” legislation faces difficulties (for now)
Right to repair/Modular laptops and phones
Companies reinventing business models to drive revenue growth
New business models: categories and services
Services bundles to ease consumers into an ecosystem
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