‘All hail Samsung Electronics’ says the Lex column in the Financial Times on the 28th of January. The news (reported fully here) that Samsung Electronics has overtaken Hewlett Packard as the world’s largest technology company may come as a surprise, especially to those who regard Samsung as a poor relation of the erstwhile dominant Japanese titans such as Sony.
However, according to market analysts, the gap between the sales of Samsung and its rivals is set to widen further by the end of 2010. Of the 38 analysts following Samsung at present 36 have issued ‘Buy’ recommendations.
Skeptics allege that Samsung relies on scale rather than innovation (see for example the FT article linked below), and is consequently weaker in terms of profitability when compared to its competitors.
The chart below, however, which shows the numbers of US patents awarded in 2009, seems to answer the first of these points, showing Samsung behind only IBM in terms of number of patents, and ahead of every other Japanese company in the league table.
FACTA, a Japanese monthly business magazine, reported in December last year that Samsung’s 2009 profit was larger than the combined profits of 9 Japanese major electronic companies. This is one of a number of articles which have recently appeared in the Japanese press about the emerging dominance of Korean companies.
Thomson Reuters released a report on January 30th this year which put Korea second only to China in terms of near-term economic growth potential. The report based its conclusion on the country’s ‘focus on education and its openness to adopting new technologies’.
Very few people predicted the economic revolution in Korea, and it could remain several steps ahead of even optimistic analysts for years to come.