Tech

How Samsung Came From Nowhere To Ambush Apple And Become The World's Biggest Smartphone Seller

Steve Kovach
2013-03-12T14:00:00Z
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models holding samsung galaxy s iii
REUTERS/Lee Jae-Won

Samsung is an old company.

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In fact, it started as a dried fish exporter in Korea way back in 1938. 

But it wasn't until recently that Samsung's name started being used in the same breath as tech giants like Apple, Microsoft, and Amazon.

Most of that is thanks to Samsung's wildly popular and profitable mobile division that makes smartphones and tablets. What was once a run-of-the-mill handset maker is now second in brand power only to Apple. 

And by many estimates, Samsung now ships more smartphones than any other manufacturer.

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As Samsung prepares to announce its latest flagship phone, the Galaxy S4, this week, we took a look at how it got to where it is today.

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Before we dive into mobile, it's important to mention that Samsung has a long history of making all kinds of electronics, most notably televisions. Along with Sharp and LG, Samsung consistently makes the best displays for HD televisions.

samsung large hd TV
AP

Samsung is also doing interesting things with Web-connected Smart TVs. It unveiled a new interface for its TVs at CES 2013 that helps you find content easier.

samsung smart tv ces 2013
Kevin Smith/Business Insider
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Behind the scenes, Samsung makes a lot of its own components such as processors and displays for mobile devices. It sells these components to a lot of companies, including Apple. All these extra areas of business plus its wildly profitable mobile division mean Samsung has deep pockets to market its products.

Samsung flash memory and processors
AP

The real story begins in March 2010 when Samsung introduced the Galaxy S, its first major flagship Android phone. The Galaxy S was widely considered at the time to be one of the best alternatives to the iPhone 3GS. (The iPhone 4 wouldn't launch for another few months.) Samsung said it sold about 10 million Galaxy S phones in the first year.

Samsung Galaxy S
AP
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Samsung introduced the Galaxy Tab in September 2010. Most considered the 7-inch Android tablet to be the first true iPad alternative.

samsung galaxy tab 7 inch launch in 2010
AP

In fact, it was the Galaxy Tab that got Apple seriously thinking about making a smaller iPad. Apple VP Eddy Cue wrote an email to Steve Jobs, Phil Schiller, and Tim Cook saying they should consider making a smaller tablet similar to the Galaxy Tab. Steve Jobs was reportedly open to it. (The email was released during the Samsung vs. Apple patent trial last year.) Apple launched the iPad Mini in fall 2012.

apple vice president eddy cue announcing the daily for ipad
Eddy Cue. AP
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The Galaxy Tab line quickly evolved to include several more sizes and form factors. By fall 2011, there were 10.1 and 8.9-inch variations. The Galaxy Tab 10.1 became Samsung's flagship tablet. Unfortunately, Samsung relied on a version of Android called Honeycomb that was designed for tablets. Honeycomb had a lot of bugs and odd quirks that weren't fixed until Google released a new version of Android called Ice Cream Sandwich in late 2011.

samsung galaxy tab 10.1
AP

Samsung's next flagship smartphone, the Galaxy S II, made its debut in spring 2011, but didn't land in the U.S. until later in the summer. The phone improved on the original, adding a larger display and faster processor. Many considered the Galaxy S II to be one of the best Android phones at the time.

samsung galaxy s ii
AP
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Samsung launched a brand new product category in October 2011 with the Galaxy Note. The Galaxy Note was the first mainstream "phablet," or a cross between a smartphone and a tablet. The Note had a large 5.3-inch display and came with a stylus for drawing or taking notes. While initially panned by critics for being too large, Samsung sold about 10 million Galaxy Notes, proving there was consumer demand for phones with giant screens.

samsung galaxy note
AP

Samsung's mobile devices were good, but so were Android-based products from companies like HTC, LG, and Motorola. Samsung needed a way to differentiate its Galaxy phones from the rest of the Android crowd while still proving they could be a viable alternative to the iPhone. Samsung reached deep into its pockets and began an aggressive and expensive marketing campaign.

htc one x with model
AP
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In November 2011, Samsung began its marketing campaign that blatantly poked fun of Apple products and the people who buy them. The series still runs today and points out all the extra things the Galaxy line of phones can do that the iPhone can't.

samsung galaxy s ii commercial
Screenshot

Samsung launched its third flagship phone, the Galaxy S III, in May 2012. The phone had an even larger display than before at 4.8 inches. It was also packed with a ton of clever software features like the ability to automatically share photos wirelessly with other Galaxy devices. The Galaxy S III was Samsung's first phone to launch in the same variation on all four major U.S. cell phone carriers. (That was unheard of for a single model Android phone.) In January 2013, Samsung said it had sold 40 million Galaxy S IIIs.

samsung galaxy s iii and apple iphone 4s
AP
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Samsung also announced in January 2013 that it had sold 100 million Galaxy S devices since the first one launched in March 2010. (There have been several variations over the years.)

samsung sells 100 million galaxy s devices
Samsung

After a successful run with the Galaxy Note, Samsung launched the Galaxy Note II in fall 2012. It was a new phablet with an even larger (5.5-inch) screen. The Galaxy Note II also added some new software features like the ability to run multiple apps at once in separate windows.

samsung galaxy note ii
AP
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After several months of running Apple-bashing ads, Samsung didn't let up when the iPhone 5 launched. Within days of the iPhone 5 announcement, Samsung ran a full-page ad in several newspapers that compared the features of the two phones. Samsung criticized the iPhone 5 for using a different kind of charging plug and less RAM than the Galaxy S III.

samsung galaxy s iii anti iphone 5 ad
Samsung

Samsung also released a commercial around the same time as the iPhone 5 launch. The spot pointed out the iPhone 5's minor upgrades and bragged that Samsung's phones had many of those features more than a year before.

samsung galaxy s iii commercial
Screenshot
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Samsung expanded its Note line in late 2012 and early 2013 to include full-sized tablets. The Galaxy Note 10.1 and 8.0 are now Samsung's top-of-the-line tablets and compete directly with Apple's iPad and iPad Mini. The Note tablets are unique devices in that they allow added functionality not found on most tablets today, including the ability to run two apps at once in a split screen.

samsung galaxy note 8 tablet at mobile world congress in barcelona
AP

Bottom line: Aggressive marketing coupled with great products turned Samsung into a household name

chart of the day, samsung's marketing budget in context, november 2012
Asymco
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And it paid off. Here's a look at Samsung's smartphone shipments (dark green line) compared to the rest of the competition. Samsung ships more smartphones than anyone else.

global%20smartphone%20shipments%20by%20vendor 1
BII

More about Samsung...

samsung galaxy note
REUTERS/Lee Jae Won

Click here to see how it started as a dried fish exporter in Korea and became the biggest smartphone maker in the world >

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