Olympic sponsor winners and losers: Samsung has a good games, Visa struggles

Well, it’s all over bar the packing away. The London 2012 Olympic Games finished last night with a musical spectacular and the host nation sitting third in the medal table. What about the sponsors though: who has won gold and who’s missed the podium? A fantastic couple of weeks of sporting action encompassing everything from …

by | August 13, 2012 | bobsguide

Well, it’s all over bar the packing away. The London 2012 Olympic Games finished last night with a musical spectacular and the host nation sitting third in the medal table. What about the sponsors though: who has won gold and who’s missed the podium?

A fantastic couple of weeks of sporting action encompassing everything from gymnastics to athletics to shooting, horse riding and running – and all three combined in the case of the marshal modern pentathlon event near where I live in Greenwich – came to an end last night.

Many claims were made for the 2012 Olympic Games in London with boasts that it would support business, encourage secure remote working, aid economic recovery and encourage the adoption of contactless card and mobile technology. All these hopes were being propagated before Danny Boyle’s witty opening ceremony on 27 July.

Visa, for instance, one of the principal Olympic sponsors, hoped that the London Games would help to familiarise consumers with near field communication (NFC) technology which was used in the ticketing, transport, food and payment systems in London. It’s too soon to say if the long hoped for ‘take off’ for contactless technology will be helped by its increased exposure at the Games, but Visa itself suffered a set-back when the card payment systems at Wembley Stadium failed due to a technical problem. The reversion to a cash only payment system hardly helped advance Visa, and other companies such as Lloyds Banking Group – who had their own mobile contactless payment (MCP) Olympic smartphone product – long held viewpoint that a ‘cashless society’ awaits us. Simple logistics and effective cash provisioning of ATMs, rather than more high tech options, may instead continue to be the primary retail payment system for some time to come.

Samsung: fast follower must aim for gold
One sponsor who seems to have come out of the London Olympic Games with a more positive bounce is Samsung. The South Korean-based international electronics and smartphone manufacturer has used its heavy investment in sponsoring the London Games to publicise its products in this particular consumer electronics segment of its business. As Samsung has overtaken Apple in its core Asian smartphone home markets, with the Galaxy mobile phone now outselling Apple’s iPhone in the region, it expects to see this trend transferred to Europe, aided by its increased exposure post-Games. This may well come to pass, and the Galaxy smartphone may even eventually challenge Apple’s iPhone in its home US market, where the firm is already losing out to phones based on the same Google Android operating system (OS) that Samsung relies on.

The challenge for Samsung in the future, however, will be to lose its tag as merely a ‘fast follower’ in the technology world who simply copies what others are doing quickly. This strategy has worked well for the company up until now with its original aping of Nokia and latterly Apple, which has resulted in on-going legal patent wars between the two, being rewarded with considerable growth. Innovating things is harder, however, and if Samsung is to take the next step towards becoming the globe’s preeminent mobile phone manufacturer and consumer technology company then it will have to work on this innovation side of the business. What if Google’s Android OS falls behind competitors, for example? Samsung has no back-up plan.

Why does it matter? Well, the consumerisation of IT trend is real and the mobile channel is a key growth area in financial services. The same consumers who demand tablets and smartphones are demending that they are also able to access their banks accounts and make payments on these devices. Whoever makes these devices naturally has an important role to play in providing future financial services, and Samsung is fast turning into one of the principal hardware providers. The truly valuable software and app provider end of the market continue to elude it for now, however, and this will perhaps be one of the principal challenges for Samsung in the years ahead.

Conclusions
As the opening ceremony of the 2012 London Olympic Games proved, with its section dedicated towards Tim Berners-Lee, the UK inventor of the World Wide Web, innovating things is not easy. The opening ceremony tagline that ‘this is for everyone’ is fine for academics such as the estimable Berners-Lee but this doesn’t necessarily translate into business success. The sadly departed ex-Apple CEO, Steve Jobs, knew this all too well. For all his advancements, he was principally a magnificent salesman and end user visionary who could make pre-existing technologies work better and design ecosystems that hoover up money. The MP3 player and the tablet computer both existed before the iPod and the iPad, for instance, but neither really took off until Jobs sprinkled his magic dust over the products and developed an AppStore for them.

Who knows, maybe Samsung can learn the same trick, without having to become pure innovators to advance the company? The next few years in the development of the company will certainly make for interesting viewing, as will the development of contactless technology and MCP payment systems supported by Visa and others. I’m not convinced it will be as interesting as seeing Usain Bolt blast through the finishing line of the 100m sprint final in London, but it will be interesting nonetheless.

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