Table of Contents
Summary
Selling of electronic devices has become the most profitable business in the world with the current developments in technology. We have seen many mobile phone companies having upgraded their products to start producing smartphones. The competition has been between Apple Incorporated and Samsung Electronics. The company Apple has been the leading organization in production of such electronics as the smartphones, iPods, iPads and much more. When Korean company-competitor manufactures the smartphone Samsung S III Apple even takes the case in the court of law. Apple claimed that Samsung Electronics does not have the rights to produce the smart phones and in that quantity. It was stated that the company sold the highest number of phones within a period of three months than any other one in the world. Samsung stresses that the market is underestimating its capability to produce phones in large volume. The company wants to prove that is not true and it has increased the price of its shares in the market.
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Business Implications
Companies sell their share to the public to get capital for investment in certain areas. The increase of share prices can be for various reasons. The first one is to raise the capital base. Once the company increases the share price, it is obvious that the capital it is going to get is more with the condition the same number of shareholders is maintained since the latter might do away with the buying if the share price is very high. Moreover, the increase of stock price will create the image that the company is performing well economically and, thus, will make rise in the share price again. The speculations will be that the organization will even do better in the near future, and hence the price will even go higher. The shareholders will, therefore, not sell their shares at that date since they will wait when the share will go higher. However, the speculators without the shares in the company would want to buy the ones in order to sell those at a profit in the future.
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The second reason as to why the business organization may increase the share price can be to limit the number of shareholders in the company. At the same time, management of the firm may want to reduce the number of people who own a small volume of shares and have only the stockholders with a large number of shares in the company.
My Thoughts
Samsung Electronics implies it is performing well economically by increasing the price of shares and that the company will even perform better in the near future. The world’s largest mobile phone maker (in 2011) will have more capital, and accordingly will be in a position to produce more goods. For instance, the company is preparing to launch the Samsung Galaxy S IV product in the market and is currently selling the Galaxy Note 2. This South Korean multinational electronics company can manufacture the product in large quantity and sell it to all parts of the world. The implication that customers of Samsung will get is what the company is doing great, and they will have more trust with the company’s products. This will translate into the consumers’ buying more products from the Korean manufacturer, and thus the company will become more popular. It will also get more profits and, as said above, will grow economically. In general, the future of the company is moving towards the right direction, and if the trends continue Samsung Electronics will overtake the first company in the market – Apple Incorporated.
