About six miles down the street from Apple Inc. (NASDAQ:AAPL)’s Cupertino, CA headquarters, Samsung broke ground on a new research and development facility today. The South Korean giant is known to be interested in keeping pace in a hotly competitive market and is looking to Silicon Valley for both startups and talent.
Although it still commands high margins with its handsets, the fact remains that the whole mobile industry is facing commoditization, and at the end – only those with big software and services portfolio will enjoy high margins.
Samsung taking over Apple’s smartphone market
Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) has been eating into Apple Inc. (NASDAQ:AAPL)’s smartphone market share for years now and it appears the South Korean company is willing to go anywhere to compete with Apple Inc. (NASDAQ:AAPL), including the iPhone maker’s own backyard.
“Our new state-of-the-art R&D center will provide an outstanding environment to support our plans for strategic growth and attracting the very best employees,” said Daniel Eum, president of Samsung Research America.
“This expansion, in addition to Samsung Semiconductor’s new San Jose campus, builds upon Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930)’s 35-year history in the Bay Area and reinforces our commitment to the valley.”
Completion of the project is meant to be quite quick with the campus set to open about this time next year. The site will include two new six-story office buildings totaling some 35,000 square meters (385,000 square feet). In an optimistic building plan, the site is expected to have office space for nearly 2,000 people that Samsung does not currently have in its employ. It’s a forward thinking plan for a company that knows it must spend big in order to remain relevant.
The campus will act as the hub for Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930)’s venture capital endeavors as well as reminding Apple Inc. (NASDAQ:AAPL) that it needs to up its own game in order to compete with the world’s largest technology firm by revenue and top smartphone maker.
Apple Samsung patent wars
There is no love lost between the companies as a series of patent infringement cases are still being heard in numerous courts worldwide. Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) was ordered to pay Apple Inc. (NASDAQ:AAPL) $1 billion in one of those cases. That judgement was lowered to $600 million by a judge, Samsung is appealing the judgment.
Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) recorded $187.8 billion in sales last year and 270,000 employees across 79 countries.