Global Collaboration: The Effect on Financial Market Trading

by Mike on May 15, 2017

Global Collaboration: The Effect on Financial Market Trading

“Globalism began as a vision of a world with free trade, shared prosperity, and open borders. These are good, even noble things to aim for.” – Deepak Chopra

Why do global corporations such as Apple and Samsung use similar technologies when developing their individual brands? We have heard time and time again of how they have accused one another in the past of stealing each other’s patents which inevitably leads to prolonged court battles and consequently massive fines by the relevant global competition commissions? Finally, how does their love-hate relationship affect their share prices and the global financial markets?

Apple and Samsung share technology

The latest news out of the Apple stable is that the company plans to move across to Samsung’s organic OLED (Light-Emitting Diode) displays, and they aim to complete this transfer before the iPhone8 release this year. Furthermore, not only will Apple be forced to utilise Samsung technology for its new iPhones, but they will also be compelled to purchase this technology from the Samsung factories.

The reason for this move by Apple is that the suppliers who currently provide Apple with their mobile device displays are not able to meet Apple’s high production goals. Therefore, the company has to transition to the latest OLED technology to rise to the challenge of providing a similar, if not better range of mobile products than Samsung. As an aside, the Samsung S8 is the first smartphone that can compete with the speed and processing power of the iPhone7. Consequently, I anticipate that competition between the two companies will increase sharply.

The impact of collaboration on the financial markets

In a nutshell, the interrelatedness between global corporations emphasises the fact that we live in a global society. The world financial markets enjoy it when companies that are listed on the different stock exchanges are successful. However, the flip-side of this coin is that when one or the other suffers, it has the potential to affect the global financial world as a whole.

Should the collaboration between Apple and Samsung be successful, it is reasonable to expect each company’s share prices to rise. Before we opine further on this subject, let’s have a brief look at some the factors that influence the current market value of all of the companies listed on one or more of the world’s stock markets.

On the whole, it is a challenge to accurately predict share prices, because theses prices change regularly based on a variety of factors. If you understand and appreciate these factors, it will help you prepare a more successful financial marketing investment strategy. Ergo: these variety of factors include:

Global news and economic conditions

There is no doubt that the world’s financial markets take their direction from the current geopolitical and socio-economic conditions. For example, if the world is in a recession, then the number of smartphones sold worldwide will drop. This will have a negative impact on the smartphone manufacturers’ sales figure which, in turn, will create a negative outlook for the company. Consequently, investors might decide that it is too risky to invest in smartphone manufacturers and sell off all of the shares they hold. Finally, the share price will tank.

Market perception

Prior experience has shown that these accusations usually end up in one of the High Courts in the USA or Europe. As soon as Apple and Samsung go head to head with each other, the share prices in the entire technology sector might be affected by this disruption. Ergo, financial market investors do not like instability, risk, and confusion. Thus, the result is that they will consider selling off their shares in this sector and move their funds into safe-haven stocks until the situation has been resolved.

Final Thoughts

It is fairly easy to see that global collaboration can be a good thing. If it is approached in a fair and equitable manner, both companies (and the global share prices) will benefit. Unfortunately, retail is known to be a cut throat business and global enterprises will often accuse each other of negative selling tactics in order to disrupt the market and sway public opinion away from their competitors and towards themselves.


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