Game Theoretic Analysis of the Mobile Phone Industry: Samsung & iPhone

This essay provides a game theoretic analysis of the mobile phone industry, specifically focusing on the duopoly competition between Samsung and Apple. It explores how business executives utilize game theory to strategize and understand market dynamics. The analysis delves into the historical context of the competition, starting with the release of the first iPhone in 2007 and the subsequent entry of Samsung with its Galaxy phones in 2009. The essay examines strategic decisions made by both companies, including intellectual property disputes and innovative features like the 'rubber-banding' and 'pinch-and-zoom' features. The conclusion highlights Apple's strategic advantages in the market due to its timely decisions. The paper references several academic sources to support its analysis of the mobile phone market.

Running head: GAME THEORETIC ANALYSIS
Game Theoretic Analysis of the Mobile Phone Industry
The duopoly competition between Samsung and iPhone handsets
Name of the Student
Name of the University
Author Note

1GAME THEORETIC ANALYSIS
Introduction
There are several strategies that the business executives use to understand or
strategize the business scenarios. Game theory is also one of these theories that induce the
comparison of different industries about their decision-making strategies, business strategy,
and several other aspects (Geckil & Anderson, 2016). The analysis is irrespective of any
industry and the comparison can be between any industry and organization.
For this essay as well, game theoretic analysis would be used to have a description
about the mobile phone industry specifically focusing on the organizations, Samsung and
Apple. The duopoly competition between the Samsung and iPhone handsets would be
analysed by game theoretic analysis to assess the mobile phone industry involving both these
handsets.
Description of Industry
The cell phone industry is one of the fastest growing sectors in the communications
industry. The manufacturing of mobile phones is the primary engagement of the industry in
the recent times, which also includes the mobile phone handsets. The technological
advancements have made the industry move forward technologically and also increase the
rate of manufacturing for the handsets.
Samsung and Apple have both been developing handsets over the years for the
customers, all of them being state-of-the-art and technologically advanced at the time of their
manufacturing (Tsaur & Huang, 2016). The handsets have become increasingly advanced
with time.
The mobile phone industry has made the mobile handsets be a necessity in the daily
lives of the customers and even so, both Samsung and Apple have gained a duopoly in the

2GAME THEORETIC ANALYSIS
market. Both Apply and Samsung have the same impact on the market and they are always at
a competition to be ahead of one another.
Game Theoretic Analysis
The duopoly competition between Apple and Samsung have been an elongated affair
since the past decade. The challenges and competitions between both Apple and Samsung
were initiated when the first iPhone model was released in 2007 (Nioche et al., 2019).
According to the game theory analysis, Apple had provided with a completely innovative
product for dominating the market and achieving the modern market contraption. Samsung
also release the first Samsung Galaxy phone in 2009 competing against the market
domination of iPhone. There were modifications on both iPhones and Samsung Galaxy
handset constantly as both the handsets completed against each other. A new handset from
both the organisations released every year competing against each other (Chen, Liang & Yao,
2017). Apple heartbeat and its sum of their intellectual property and the Samsung had run
into several legal issues because of that. According to game theory analysis, this was a part of
strategy for the iPhone handsets where “rubber-banding” feature in the operating system and
“pinch-and-zoom” feature was patented so that Samsung would automatically run into
problems while applying the same to the Android handsets of Samsung. As per game
theoretic analysis, even now due to the strategic decisions made by Apple, Samsung is still
behind as per market groping is concerned.
Conclusion
In conclusion it can be said that the decisions that Samsung and Apple have both
taken in, can be analysed by game-theoretic strategy. This results to finding the fact that in
the market duopoly between Samsung and Apple, Apple still runs forward when it comes to

3GAME THEORETIC ANALYSIS
acquiring the market due to its strategic decisions made at the right time, much ahead of
Samsung handsets.

4GAME THEORETIC ANALYSIS
References
Chen, J., Liang, L., & Yao, D. Q. (2017). An analysis of intellectual property licensing
strategy under duopoly competition: Component or product-based?. International
Journal of Production Economics, 193, 502-513.
Geckil, I. K., & Anderson, P. L. (2016). Applied game theory and strategic behavior.
Chapman and Hall/CRC.
Nioche, A., Garcia, B., Boraud, T., Rougier, N., & Bourgeois-Gironde, S. (2019). Interaction
effects between consumer information and firms' decision rules in a duopoly.
Tsaur, R. C., & Huang, Y. C. (2016). Reused Smartphones Pricing Analysis-A Duopoly
Model Analysis with respect to Apple and Samsung Smartphones. International
Journal of Information and Management Sciences, 27(4), 405-422.