Why Is Silicon Valley Afraid Of Samsung?

12/13/13 10:09AM EST

Why Is Silicon Valley Afraid Of Samsung Why Is Silicon Valley Afraid Of Samsung?

Image via Kobby Dagan/Shutterstock

Bloomberg has put together a report on the most dangerous tech companies in the world. The list, which was formed from the annual reports of a large number of publicly traded tech companies shows that American firms still dominate the tech industry. Just one of the companies listed as the “most dangerous” was from outside the country. Why is everybody so afraid of Samsung?

The South Korean electronics company has been around for a long time, and it”s been just as large and multifaceted for much of the last fifteen years as it is now. The firm operates in a huge range of businesses from components to finished products. The firm’s dominance of the Android side of the smart phone market, and the lack of American companies at the same level, makes it more visible, but there seems little reason to think of the firm as more dangerous than so many others.

Samsung Isn’t All That Different

Samsung is just another Android smart phone and tablet market right now. It may be a big one, and that means really big, but it doesn’t have that much market power. The company does work on customizing the Android experience it offers, but most of the operating system is the same. Differentiation is not high. Samsung could be replaced quickly, and without much notice.

Samsung doesn’t have a strong hold on the tablet market, and the company’s smart phone business is looking less and less solid in the face of increasing quality at the likes of HTC and Motorola. Public failures, like the firm’s smart watch the Galaxy Gear, do not help the firm’s image. Products like the Galaxy Round do little to endear themselves to the public, particularly when they’re only available in South Korea.

Apple Inc. (NASDAQ:AAPL) is probably not all that afraid of Samsung. The company knows that the south Korean firm is just the latest in a string of low-rent competitors. Samsung is beginning to come to terms with that itself, though it may take some time.

Living In Fear Of Samsung

Samsung is one of the most important tech companies around today, and the company does a whole host of important things for the industry. Perhaps the reason that so many companies are afraid is because there is so much to fear. Few companies operate as successfully in so many industries and manages to keep public interest.

Samsung is a threat to almost everybody in the tech industry. Software makers are worried about the company’s proprietary mobile OS, hardware makers are worried about the company’s products and a whole host of component manufacturers are transfixed by Samsung’s incredible range of high level manufacturing.

Samsung is not dangerous for the American tech industry. The company plays ball, and it isn’t trying to disrupt anything. For small and medium tech companies, however, Samsung is a competitor. That’s the reason the firm is so high up the Bloomberg list.

Disclosure: Author represents that he has no position in any stocks mentioned in this article at the time this article was submitted.