14 ms·

Samsung overtakes Apple as world's most profitable mobile phone maker

125 points by Fortaymedia 13y ago

pearjuice 13y ago
It is over, Apple is finished.
- epo 13y ago
  So some outfit called Strategy Analytics, who no one has ever heard of, (but who will no doubt turn out to have Samsung as a shareholder or customer) says that their estimates of Samsung's profits exceeds their estimates of Apple's profits. And the fandroids lap it up.
  - pearjuice 13y ago
    I forgot my [sarcasm] tags.
    - jevinskie 13y ago
      It still wouldn't have been an appropriate HN comment.
      - pearjuice 13y ago
        Yet I am getting blessed with karma.
    - sigzero 13y ago
      I read it as sarcastic anyway. lol
  - laumars 13y ago
    To be honest, your comment comes across as more of a fanboy remark than the guy you were responding to. And to be honest, I'm just sick to death of how every Apple discussion (and on every forum) ends up as a heated flamewar against brainwashed sheeple who value brand loyalty above their own sanity. And I'm not singling Apple customers out; I'm talking about Samsung / Android zealots in Apple threads as well. It's as if we, the developed world, have nothing better to do with our time than start arguments on the internet about inconsequential bullshit because someone dared criticize our favorite brand.
    - derefr 13y ago
      > It's as if we, the developed world, have nothing better to do with our time than start arguments on the internet about inconsequential bullshit because someone dared criticize our favorite brand. It's almost as if it was human nature to pick inconsequential things to strongly identify with for the sake of creating arbitrary us-them divides to fight over. (http://lesswrong.com/lw/mg/the_twoparty_swindle/ http://lesswrong.com/lw/mg/the_twoparty_swindle/)
    - fc2 13y ago
      Android fans care about open source, not Google or Samsung. There's a big difference between that and Apple fanboyism.
      - laumars 13y ago
        I disagree. Most Android fans don't follow open source that closely (eg they're Windows users on the desktop). And most open source fans (myself included) don't consider Android that open.
  - epo 13y ago
    And here we go, it only took 2 days. the story is a fabrication http://appleinsider.com/articles/13/07/27/samsung-has-not-dethroned-apple-in-mobile-profits http://appleinsider.com/articles/13/07/27/samsung-has-not-de... They compared estimates (made up numbers remember) but for Apple they used some calculation of net profit, for Samsung they did not. A choice quote "In other words, in order to report that "Samsung has finally succeeded in becoming the handset industry's largest and most profitable vendor," Strategy Analytics had to compare Samsung's entire PC and device business with only half of Apple's." So basically anti-Apple propaganda, all lies and lapped up by the fandroids. Fascinatingly a submission reporting this story has been flagged so it can no longer be upvoted.
- asfasfafwF 13y ago
  This isn't /g/.
saejox 13y ago
Apple devices are ridiculously expensive. iPhone5 is $900 here.
- Tloewald 13y ago
  Apple's prices are fine here (the US) but it's hard to compete when everyone else is selling competing products at a loss (Barnes and Noble is selling off its Nook HD+ inventory at $129, Google has spent billions on Android and more buying Motorola for little apparent income, Amazon's business model is to sell razor blade handles at a loss so it can sell blades at break even, and Microsoft is paying Nokia to make Windows phones almost no-one buys — how can anyone compete with that on price?)
  - cageface 13y ago
    Apple still has huge profit margins, and so far made the mistake (IMO) of holding on to those margins instead of trading them down a bit to increase market share. They've done a lot of damage to themselves with this strategy but they still have a lot of room to maneuver.
    - seanmcdirmid 13y ago
      Don't you think they might have damaged their brand by "trading them down a bit to increase market share"? Why don't BMW or Mercedes go trade down their margins to sell more cars? I know engineers don't understand marketing very well, but they should at least understand the very simple principle of brand building.
      - danieldk 13y ago
        This is where the car analogy breaks down: we can reasonably expect that a BMW or Mercedes can use the same roads as a Dacia. But once Apple doesn't have a significant share of the smartphone market anymore, Google and others could easily lock them out further by making services that are Android-only. It's hard to ignore a 40% audience, it's attractive to bully a 10% audience, that is willing to pay huge margins, into switching to Android.
codeflo 13y ago
Are the smartphone divisions of Motorola, LG and Sony still operating at a loss? I wonder how long these companies will continue to throw money at a market they seemingly can't compete in.
- laumars 13y ago
  Since Motorola is now owned by Google, I can't see them pulling out any time soon.
- kryptiskt 13y ago
  Motorola are losing much money right now, they are rolling the dice on the Moto X launch that's coming up. Google will make a huge marketing push for that one. LG, Sony and HTC are making modest amounts of money on phones. HTC has nosedived to that level and the other two have turned around losses to be there. They need to do better, but they have little reason to pack it in.
  - czhiddy 13y ago
    > They need to do better, but they have little reason to pack it in. http://allthingsd.com/20130705/htc-profit-misses-expectations/ http://allthingsd.com/20130705/htc-profit-misses-expectation... They're still profitable, but for how long? If they don't engineer a turnaround, they'll be solidly in the red a year from now. At that point, they have plenty of reasons to pack it in.
    - wtetzner 13y ago
      It's unfortunate, because I've owned the HTC 8x, and now the HTC One Google Play Edition. These are both some of the nicest phones I've used/seen.
10dpd 13y ago
Anyone who follows The Guardian's tech coverage in the UK would not be surprised to learn that the reporter for this article is not a certain Apple fanboy..
terabytest 13y ago
Doesn't Samsung produce a much vaster chain of models, which also contain very cheap versions which are obviously more affordable than Apple's? If that's the case, I think this statistic might be a little skewed, because it's pretty obvious that you'll end up with a bigger market share if you sell 10 different flavors of the same thing compared to a company which only sells one.
- adventured 13y ago
  I think this is such a news story, because for a long time it was touted that while Apple was rapidly losing market share, they still took home the radical majority of industry profit. That is no longer the case. And given Apple's growth has flat lined, they're losing market share in China, and their margins are under attack by good-enough cheap Android phones, it is very likely their profitability will continue to struggle against prior expectations.
  - seanmcdirmid 13y ago
    Given that Apple has completely saturated the high-end phone market in China, it makes sense that their market share isn't growing anymore. China has a lot of poor farmers upgrading their feature phones to Huawei's. Trust me, the China markets for cheap Android phones and iPhones are completely disjoint. The biggest competitor iPhone has in the high end market seems to be...weirdly enough, the Galaxy Note.
- yulaow 13y ago
  Well that's a fault of apple, not of samsung. Infact there are chance that in the near future apple releases a cheap iphone version (but how much cheap considering that the iphone is one of the phone with the higher price on the market?)
  - seanmcdirmid 13y ago
    Maybe Apple doesn't want to go there (yet). Louis Vuitton doesn't necessary miss out on the mass market for bags. If they decided to do mass market bags tomorrow, it would be very painful and the market would be very confused. Samsung, on the other hand, is just a mid-quality brand, they can safely hit the low end without confusing consumers. Apple is run pretty decently; I'm sure they'll take advantage of opportunities as they see them. It might make sense for them to focus on high-end phones and invest in other non-phone products then to regain the "most profit on phones" crown.
bsaul 13y ago
I think there's a lesson here in comparing apple ipod to iphone strategy. How come no one managed to beat apple's ipod and samsung beat the iphone. I have a couple of ideas (price tag on the iphone was too high, market size is bigger and attracts more competitors, technology is more difficult because it deals with both hardware and software, etc), but no definitive answer. That's something that will be discussed in business schools for a long time.
- RyanZAG 13y ago
  If you compare the markets exactly then the real differentiator is simply that Google open-sourced Android into the phone business, but not into the music player business. I'm not sure if 'Google did it' is the real answer to your question or not, but it's interesting to note that competing on level ground with open source is extremely difficult - especially when that open source is backed by very heavy funding.
- randallu 13y ago
  There was nothing like Android for music players. Samsung is not a software platform company in any way.
  - bsaul 13y ago
    Samsung is definitely a software plaform company. It had Bada that it used in its Wave product line (which surely accounts for a small percentage of their profit) and it will soon have Tizen. Android is definitely one reason, and one could say that samsung AND google won against Apple. That what i meant when i said the business is much more complicated as it requires to be excellent and competitive both in hardware and software.
    - randallu 13y ago
      Bada is dead, Tizen looks likely to be DOA. By software platform company I meant a company that can sustain software platforms. It's really easy to ship a new platform every year; no third parties want that though. I agree with your point that Samsung really upped the ante on Android hardware. The GS1 and GS2 were a tipping point on Android hardware performance and quality -- now that Qualcomm is making high performance parts and everyone is doing competitive product design Samsung are less necessary to Android (but still dominating).
RyanZAG 13y ago
I'm having a good laugh over this headline for a very simple reason. A few years back when the iPhone was selling more than all Android devices combined, people were quick to say that Android would never be able to compete since it's 'too geeky'. Awhile later when Android took off a bit and all of the Android devices together sold more than the iPhone, people were quick to say how it's just one supplier (Apple) vs many suppliers producing Android phones. Bit later, Samsung is doing really well with their Galaxy range, and suddenly Samsung alone is selling more devices than Apple. People then say how Samsung sells tons of different devices while Apple only sells one. Again, a bit later, a quarter arrives where a single Samsung device (I believe it was the S3?) outsold the iPhone. People were then very quick to point out how profits are important, and Apple makes more profits than anybody making Android. Well, look at the news now. Samsung now overtakes Apple in profits as well. I'm sure we'll have some new goalposts shortly that we can wait for. These issues (profitability, marketshare, etc) are not ends to themselves - they are only symptoms or indicators of the real market forces behind them. The real issue is that Google/Android are out competing Apple in features, price and 'freedom'. 'Freedom' in this case being a nebulous concept that translates on-the-ground into something like 'able to load up porn apps on your phone if you want to'.
- pavs 13y ago
  I find this "us versus them" and corporate worshipping a bit troubling. I use an Android phone (S3) now, I used to use iPhone, but I didn't really like the direction they were heading. So I chose the phone OS ecosystem I liked. One thing that annoys me more than Apple fanboys are Android fanboys.
  - usethis 13y ago
    Yes, who cares, the user decides for an eco system and that's it. I am happy with Apple, they serve my every perceived need and as long as they are not too expensive or too far behind, I am not going to change. This is mostly preaching to the choir anyway.
  - PommeDeTerre 13y ago
    Merely pointing out the hypocritical arguments of some Apple supporters does not automatically make somebody an "Android fanboy". Merely pointing out the functional differences between iOS and Android does not automatically make somebody an "Android fanboy". Merely pointing out the philosophical differences between iOS and Android does not automatically make somebody an "Android fanboy". To generalize this, merely pointing out things that can be perceived as negative about one product/company/person does not mean that the person expressing such ideas automatically supports some competing product/company/person.
RealGeek 13y ago
Déjà vu, it's Windows all over again.
- yulaow 13y ago
  The irony is that now microsoft has the same problem. It is incapable to get even a little percent on tablet marketshare and the phone marketshare, in which with nokia and the lumia it is pushing literally Billions of investments, the marketshare is still really really low.
  - consonants 13y ago
    As someone who shelled out for the N770/N810, I can't help but engage in a bit of schadenfreude w/r/t Nokia's decision to drop Maemo in favor of the Windows phone platform and their subsequent adoption rates.
- joakleaf 13y ago
  How is it Windows all over again? Windows 3.0 and 95 were built on top of DOS which already had the majority of the market. Apple never had a large portion of the world-market in the 80s and 90s. Samsung doesn't make the operating system but only the phones. Google doesn't profit directly from Android. So neither of those two companies are similar to Microsoft of the 80s. DOS was incredible strong in the enterprise sector and that's how Windows really grew. Mac was weak in that sector. Android isn't built on top of anything similar to DOS. It also isn't stronger in the enterprise sector than iOS. The battle between Windows and Mac was not about "free" versus proprietary. Hardware vendors didn't get Windows for free. Microsoft made its money selling Windows. Windows didn't "win" because of just one company. Although IBM did push DOS, they didn't push Windows. Windows "won" because of many companies. Apple wasn't the largest IT-giant in the 80s and 90s. It is now. It has a fortune in the bank and plenty of smart people. It isn't really Android that has the majority marketshare. It is Samsung! I.e. one hardware company. So it really isn't anything like Windows and Mac from 80s and 90s. This is something different. It is however a battle of marketshare involving Apple, and right now they are losing share to something that looks similar to iOS, just like they lost to Windows that looked similar to Mac in the 90s. However, the situation and premises are not the same. What will be interesting now, is if Samsung and Google will continue to get along and if Samsung will want to differentiate themselves more from stock Android. I think they'll have to, in order to compete against even cheaper phones in the long run; The Android market could implode in a massive price-war with profit margins dropping to 0 everywhere. Apple can also still fight back. iOS is a reasonably solid foundation, and right now Samsung is their only real competitor. Traditionally, these devices compete on Software, design, and hardware capabilities. Apple is a much stronger software and design company than Samsung... So who knows how this will end?
aet 13y ago
Why not compare the companies based on their overall strategies/profits? Do people actually make investment decisions based on a single line of business?
mcintyre1994 13y ago
Can somebody explain why Samsung didn't have this title in Q2 2012? From the article: "The California company made an estimated $3.2bn (£2.1bn) profit from iPhone sales in the second quarter of the year, according to the research firm Strategy Analytics, a marked drop from $4.6bn a year ago" So, Apple 2012 Q2 : $4.6bn "The same trend has squeezed Samsung's handset profits, which are down from an estimated $5.6bn in the second quarter of 2012" Samsung 2012 Q2 : $5.6bn Interesting figures anyway, Apple's drop of over $1bn is interesting, they've dropped over 3x as much as Samsung did.
- adventured 13y ago
  The article is wrong. Samsung earned $3.64 billion in Q2 2012, from their phone business. They had an operating profit of $5.9b in Q2 2012 (which is the apparent source of confusion). So Apple out-earned Samsung in phones last year, $4.6b to $3.64b. http://techcrunch.com/2012/07/26/samsungs-q2-2012-earnings-smartphone-business-propels-41-5b-in-revenues-5-9b-in-profits/ http://techcrunch.com/2012/07/26/samsungs-q2-2012-earnings-s...
  - mcintyre1994 13y ago
    That'd make more sense, thanks for the techcrunch link, that's much more useful. http://techcrunch.com/2013/07/25/samsung-q2-profits-up-47-5-but-operating-profit-at-its-mobile-division-slows/ http://techcrunch.com/2013/07/25/samsung-q2-profits-up-47-5-... seems to confirm the Q2 2013 figure of $5.6bn for Samsung, so that's actually a big increase year-on-year. That Guardian article is very misleading.
itg 13y ago
Must be nice being a chaebol and having the complete backing of your government.
- w1ntermute 13y ago
  Must be nice being an SV company and receiving the adoration of your government and the American people while blatantly dodging taxes and locking customers into a severely restricted platform.
  - sixbrx 13y ago
    Oh no, not adoration?!! Ando those poor customers, being forced to buy those apple devices!
  - ceol 13y ago
    There is no American comparison to a chaebol, especially Samsung. Fanboy arguments aside, you can't compare the two. It would be like if Apple built your car, held your insurance policy, and owned the apartment complex you lived in. None of that comes close to having to buy digital apps on your Apple phone from Apple.
    - hahainternet 13y ago
      Apps, Phones, Tablets, Accessories, Cars, TVs, Home Entertainment systems. While I agree a direct comparison is unwarranted, the future of Apple's closed ecosystem is slightly worrying.
marincounty 13y ago
I don't think Job's would have allowed this to happen?
glasshead969 13y ago
IMO, you can't compare quarters of 2 companies with different product cycles. Samsung just released S4 while Apple's last product launch was 9 months ago.
- protomyth 13y ago
  Sure you can, that way you can get the "Apple took back its #1 position" clicks in the next couple of months.
lotides 13y ago
(Haven't used this account in a while, not sure if it's shadowbanned. Hope you can see this.) No matter what you think of Apple, or Google, and their respective ecosystems, I'm curious what people think of Samsungs popularity. They're a massive South Korean company that until recently was well known mostly for ripping off other companies products and out-marketing them (I'm not making this up, these accusations go back decades now covering a variety of consumer products, go ahead and Google it). Some people, myself included, don't really believe this practice ever ended. Say something were to happen to Apple and Samsung truly pulled away as the technology leader in the future. Are you as a consumer happy putting your eggs in that basket, so to speak? Do you think Samsung is going to embrace a culture of innovation, vision and design? I honestly don't see it. As a designer, I've stayed clear of Samsung products because they just come off as cheap (or expensive) imitations. As a market leader, you have the privilege to introduce consumers to exciting new technologies, UI innovations and ideas. Samsung isn't built for that. Their idea of great design is hiring 1,000 good designers and taking a little bit from each one. That's not how design works. You have to have a unified vision with a great idea behind it. Consistency is so important. I don't care if Apple is the leader for the next decade but I'd rather a more creative company took the reins.
- r00fus 13y ago
  Samsung coasts on Google's creativity in pushing Android. If they had to rely on Tizen or Meego (or god forbid Symbian), they'd be dead in the water... and that's not considering Google's very popular 1st-party Android apps (ie, GMail, Maps, etc). Without Google, Samsung has no trump cars in the hand. They know it, which is why they put any money at all in to other OSs. What is amazing is that Google is letting them dominate the Android market so completely. If Google hopes that a strong Samsung will ward off a strong Apple, they better watch their own back.
general_failure 13y ago
People are delusional if they think ios has better ui than android. The app store has a terrible ui on iOS where many times it doesn't load at all. And dumbing down the ui to one button is not so great.
cpprototypes 13y ago
Apple partly helped make Samsung popular with their ridiculous patent lawsuit. It was a lot of free press for Samsung.
lazyjones 13y ago
So the Android strategy of delaying/preventing OS updates to make customers purchase new smartphones after 1-2 years finally paid off.
- hahainternet 13y ago
  This is not an 'Android strategy'. Downvoting you for lying.
protez 13y ago
I don't think Apple designed iPhone to become the world's most profitable mobile phone maker. Apple just happened to become the one with its "Apple II attitude" to mobile computing. Compared to how Apple II got obsolete in the personal computer market in 1980s, iPhone/iPad has much brighter future from its solid ecosystem. It's just the time for Apple to start selling low-priced iPhone models to compete against Google in developing countries.

125 points by Fortaymedia 13y ago

pearjuice 13y ago

It is over, Apple is finished.

epo 13y ago
So some outfit called Strategy Analytics, who no one has ever heard of, (but who will no doubt turn out to have Samsung as a shareholder or customer) says that their estimates of Samsung's profits exceeds their estimates of Apple's profits. And the fandroids lap it up.
- pearjuice 13y ago
  I forgot my [sarcasm] tags.
  - jevinskie 13y ago
    It still wouldn't have been an appropriate HN comment.
    - pearjuice 13y ago
      Yet I am getting blessed with karma.
  - sigzero 13y ago
    I read it as sarcastic anyway. lol
- laumars 13y ago
  To be honest, your comment comes across as more of a fanboy remark than the guy you were responding to. And to be honest, I'm just sick to death of how every Apple discussion (and on every forum) ends up as a heated flamewar against brainwashed sheeple who value brand loyalty above their own sanity. And I'm not singling Apple customers out; I'm talking about Samsung / Android zealots in Apple threads as well. It's as if we, the developed world, have nothing better to do with our time than start arguments on the internet about inconsequential bullshit because someone dared criticize our favorite brand.
  - derefr 13y ago
    > It's as if we, the developed world, have nothing better to do with our time than start arguments on the internet about inconsequential bullshit because someone dared criticize our favorite brand. It's almost as if it was human nature to pick inconsequential things to strongly identify with for the sake of creating arbitrary us-them divides to fight over. (http://lesswrong.com/lw/mg/the_twoparty_swindle/ http://lesswrong.com/lw/mg/the_twoparty_swindle/)
  - fc2 13y ago
    Android fans care about open source, not Google or Samsung. There's a big difference between that and Apple fanboyism.
    - laumars 13y ago
      I disagree. Most Android fans don't follow open source that closely (eg they're Windows users on the desktop). And most open source fans (myself included) don't consider Android that open.
- epo 13y ago
  And here we go, it only took 2 days. the story is a fabrication http://appleinsider.com/articles/13/07/27/samsung-has-not-dethroned-apple-in-mobile-profits http://appleinsider.com/articles/13/07/27/samsung-has-not-de... They compared estimates (made up numbers remember) but for Apple they used some calculation of net profit, for Samsung they did not. A choice quote "In other words, in order to report that "Samsung has finally succeeded in becoming the handset industry's largest and most profitable vendor," Strategy Analytics had to compare Samsung's entire PC and device business with only half of Apple's." So basically anti-Apple propaganda, all lies and lapped up by the fandroids. Fascinatingly a submission reporting this story has been flagged so it can no longer be upvoted.
asfasfafwF 13y ago
This isn't /g/.

saejox 13y ago

Apple devices are ridiculously expensive. iPhone5 is $900 here.

Tloewald 13y ago
Apple's prices are fine here (the US) but it's hard to compete when everyone else is selling competing products at a loss (Barnes and Noble is selling off its Nook HD+ inventory at $129, Google has spent billions on Android and more buying Motorola for little apparent income, Amazon's business model is to sell razor blade handles at a loss so it can sell blades at break even, and Microsoft is paying Nokia to make Windows phones almost no-one buys — how can anyone compete with that on price?)
- cageface 13y ago
  Apple still has huge profit margins, and so far made the mistake (IMO) of holding on to those margins instead of trading them down a bit to increase market share. They've done a lot of damage to themselves with this strategy but they still have a lot of room to maneuver.
  - seanmcdirmid 13y ago
    Don't you think they might have damaged their brand by "trading them down a bit to increase market share"? Why don't BMW or Mercedes go trade down their margins to sell more cars? I know engineers don't understand marketing very well, but they should at least understand the very simple principle of brand building.
    - danieldk 13y ago
      This is where the car analogy breaks down: we can reasonably expect that a BMW or Mercedes can use the same roads as a Dacia. But once Apple doesn't have a significant share of the smartphone market anymore, Google and others could easily lock them out further by making services that are Android-only. It's hard to ignore a 40% audience, it's attractive to bully a 10% audience, that is willing to pay huge margins, into switching to Android.

codeflo 13y ago

Are the smartphone divisions of Motorola, LG and Sony still operating at a loss? I wonder how long these companies will continue to throw money at a market they seemingly can't compete in.

laumars 13y ago
Since Motorola is now owned by Google, I can't see them pulling out any time soon.
kryptiskt 13y ago
Motorola are losing much money right now, they are rolling the dice on the Moto X launch that's coming up. Google will make a huge marketing push for that one. LG, Sony and HTC are making modest amounts of money on phones. HTC has nosedived to that level and the other two have turned around losses to be there. They need to do better, but they have little reason to pack it in.
- czhiddy 13y ago
  > They need to do better, but they have little reason to pack it in. http://allthingsd.com/20130705/htc-profit-misses-expectations/ http://allthingsd.com/20130705/htc-profit-misses-expectation... They're still profitable, but for how long? If they don't engineer a turnaround, they'll be solidly in the red a year from now. At that point, they have plenty of reasons to pack it in.
  - wtetzner 13y ago
    It's unfortunate, because I've owned the HTC 8x, and now the HTC One Google Play Edition. These are both some of the nicest phones I've used/seen.

10dpd 13y ago

Anyone who follows The Guardian's tech coverage in the UK would not be surprised to learn that the reporter for this article is not a certain Apple fanboy..

terabytest 13y ago

Doesn't Samsung produce a much vaster chain of models, which also contain very cheap versions which are obviously more affordable than Apple's? If that's the case, I think this statistic might be a little skewed, because it's pretty obvious that you'll end up with a bigger market share if you sell 10 different flavors of the same thing compared to a company which only sells one.

adventured 13y ago
I think this is such a news story, because for a long time it was touted that while Apple was rapidly losing market share, they still took home the radical majority of industry profit. That is no longer the case. And given Apple's growth has flat lined, they're losing market share in China, and their margins are under attack by good-enough cheap Android phones, it is very likely their profitability will continue to struggle against prior expectations.
- seanmcdirmid 13y ago
  Given that Apple has completely saturated the high-end phone market in China, it makes sense that their market share isn't growing anymore. China has a lot of poor farmers upgrading their feature phones to Huawei's. Trust me, the China markets for cheap Android phones and iPhones are completely disjoint. The biggest competitor iPhone has in the high end market seems to be...weirdly enough, the Galaxy Note.
yulaow 13y ago
Well that's a fault of apple, not of samsung. Infact there are chance that in the near future apple releases a cheap iphone version (but how much cheap considering that the iphone is one of the phone with the higher price on the market?)
- seanmcdirmid 13y ago
  Maybe Apple doesn't want to go there (yet). Louis Vuitton doesn't necessary miss out on the mass market for bags. If they decided to do mass market bags tomorrow, it would be very painful and the market would be very confused. Samsung, on the other hand, is just a mid-quality brand, they can safely hit the low end without confusing consumers. Apple is run pretty decently; I'm sure they'll take advantage of opportunities as they see them. It might make sense for them to focus on high-end phones and invest in other non-phone products then to regain the "most profit on phones" crown.

bsaul 13y ago

I think there's a lesson here in comparing apple ipod to iphone strategy. How come no one managed to beat apple's ipod and samsung beat the iphone. I have a couple of ideas (price tag on the iphone was too high, market size is bigger and attracts more competitors, technology is more difficult because it deals with both hardware and software, etc), but no definitive answer. That's something that will be discussed in business schools for a long time.

RyanZAG 13y ago
If you compare the markets exactly then the real differentiator is simply that Google open-sourced Android into the phone business, but not into the music player business. I'm not sure if 'Google did it' is the real answer to your question or not, but it's interesting to note that competing on level ground with open source is extremely difficult - especially when that open source is backed by very heavy funding.
randallu 13y ago
There was nothing like Android for music players. Samsung is not a software platform company in any way.
- bsaul 13y ago
  Samsung is definitely a software plaform company. It had Bada that it used in its Wave product line (which surely accounts for a small percentage of their profit) and it will soon have Tizen. Android is definitely one reason, and one could say that samsung AND google won against Apple. That what i meant when i said the business is much more complicated as it requires to be excellent and competitive both in hardware and software.
  - randallu 13y ago
    Bada is dead, Tizen looks likely to be DOA. By software platform company I meant a company that can sustain software platforms. It's really easy to ship a new platform every year; no third parties want that though. I agree with your point that Samsung really upped the ante on Android hardware. The GS1 and GS2 were a tipping point on Android hardware performance and quality -- now that Qualcomm is making high performance parts and everyone is doing competitive product design Samsung are less necessary to Android (but still dominating).

RyanZAG 13y ago

I'm having a good laugh over this headline for a very simple reason. A few years back when the iPhone was selling more than all Android devices combined, people were quick to say that Android would never be able to compete since it's 'too geeky'. Awhile later when Android took off a bit and all of the Android devices together sold more than the iPhone, people were quick to say how it's just one supplier (Apple) vs many suppliers producing Android phones. Bit later, Samsung is doing really well with their Galaxy range, and suddenly Samsung alone is selling more devices than Apple. People then say how Samsung sells tons of different devices while Apple only sells one. Again, a bit later, a quarter arrives where a single Samsung device (I believe it was the S3?) outsold the iPhone. People were then very quick to point out how profits are important, and Apple makes more profits than anybody making Android. Well, look at the news now. Samsung now overtakes Apple in profits as well. I'm sure we'll have some new goalposts shortly that we can wait for. These issues (profitability, marketshare, etc) are not ends to themselves - they are only symptoms or indicators of the real market forces behind them. The real issue is that Google/Android are out competing Apple in features, price and 'freedom'. 'Freedom' in this case being a nebulous concept that translates on-the-ground into something like 'able to load up porn apps on your phone if you want to'.

pavs 13y ago
I find this "us versus them" and corporate worshipping a bit troubling. I use an Android phone (S3) now, I used to use iPhone, but I didn't really like the direction they were heading. So I chose the phone OS ecosystem I liked. One thing that annoys me more than Apple fanboys are Android fanboys.
- usethis 13y ago
  Yes, who cares, the user decides for an eco system and that's it. I am happy with Apple, they serve my every perceived need and as long as they are not too expensive or too far behind, I am not going to change. This is mostly preaching to the choir anyway.
- PommeDeTerre 13y ago
  Merely pointing out the hypocritical arguments of some Apple supporters does not automatically make somebody an "Android fanboy". Merely pointing out the functional differences between iOS and Android does not automatically make somebody an "Android fanboy". Merely pointing out the philosophical differences between iOS and Android does not automatically make somebody an "Android fanboy". To generalize this, merely pointing out things that can be perceived as negative about one product/company/person does not mean that the person expressing such ideas automatically supports some competing product/company/person.

RealGeek 13y ago

Déjà vu, it's Windows all over again.

yulaow 13y ago
The irony is that now microsoft has the same problem. It is incapable to get even a little percent on tablet marketshare and the phone marketshare, in which with nokia and the lumia it is pushing literally Billions of investments, the marketshare is still really really low.
- consonants 13y ago
  As someone who shelled out for the N770/N810, I can't help but engage in a bit of schadenfreude w/r/t Nokia's decision to drop Maemo in favor of the Windows phone platform and their subsequent adoption rates.
joakleaf 13y ago
How is it Windows all over again? Windows 3.0 and 95 were built on top of DOS which already had the majority of the market. Apple never had a large portion of the world-market in the 80s and 90s. Samsung doesn't make the operating system but only the phones. Google doesn't profit directly from Android. So neither of those two companies are similar to Microsoft of the 80s. DOS was incredible strong in the enterprise sector and that's how Windows really grew. Mac was weak in that sector. Android isn't built on top of anything similar to DOS. It also isn't stronger in the enterprise sector than iOS. The battle between Windows and Mac was not about "free" versus proprietary. Hardware vendors didn't get Windows for free. Microsoft made its money selling Windows. Windows didn't "win" because of just one company. Although IBM did push DOS, they didn't push Windows. Windows "won" because of many companies. Apple wasn't the largest IT-giant in the 80s and 90s. It is now. It has a fortune in the bank and plenty of smart people. It isn't really Android that has the majority marketshare. It is Samsung! I.e. one hardware company. So it really isn't anything like Windows and Mac from 80s and 90s. This is something different. It is however a battle of marketshare involving Apple, and right now they are losing share to something that looks similar to iOS, just like they lost to Windows that looked similar to Mac in the 90s. However, the situation and premises are not the same. What will be interesting now, is if Samsung and Google will continue to get along and if Samsung will want to differentiate themselves more from stock Android. I think they'll have to, in order to compete against even cheaper phones in the long run; The Android market could implode in a massive price-war with profit margins dropping to 0 everywhere. Apple can also still fight back. iOS is a reasonably solid foundation, and right now Samsung is their only real competitor. Traditionally, these devices compete on Software, design, and hardware capabilities. Apple is a much stronger software and design company than Samsung... So who knows how this will end?

aet 13y ago

Why not compare the companies based on their overall strategies/profits? Do people actually make investment decisions based on a single line of business?

mcintyre1994 13y ago

Can somebody explain why Samsung didn't have this title in Q2 2012? From the article: "The California company made an estimated $3.2bn (£2.1bn) profit from iPhone sales in the second quarter of the year, according to the research firm Strategy Analytics, a marked drop from $4.6bn a year ago" So, Apple 2012 Q2 : $4.6bn "The same trend has squeezed Samsung's handset profits, which are down from an estimated $5.6bn in the second quarter of 2012" Samsung 2012 Q2 : $5.6bn Interesting figures anyway, Apple's drop of over $1bn is interesting, they've dropped over 3x as much as Samsung did.

adventured 13y ago
The article is wrong. Samsung earned $3.64 billion in Q2 2012, from their phone business. They had an operating profit of $5.9b in Q2 2012 (which is the apparent source of confusion). So Apple out-earned Samsung in phones last year, $4.6b to $3.64b. http://techcrunch.com/2012/07/26/samsungs-q2-2012-earnings-smartphone-business-propels-41-5b-in-revenues-5-9b-in-profits/ http://techcrunch.com/2012/07/26/samsungs-q2-2012-earnings-s...
- mcintyre1994 13y ago
  That'd make more sense, thanks for the techcrunch link, that's much more useful. http://techcrunch.com/2013/07/25/samsung-q2-profits-up-47-5-but-operating-profit-at-its-mobile-division-slows/ http://techcrunch.com/2013/07/25/samsung-q2-profits-up-47-5-... seems to confirm the Q2 2013 figure of $5.6bn for Samsung, so that's actually a big increase year-on-year. That Guardian article is very misleading.

itg 13y ago

Must be nice being a chaebol and having the complete backing of your government.

w1ntermute 13y ago
Must be nice being an SV company and receiving the adoration of your government and the American people while blatantly dodging taxes and locking customers into a severely restricted platform.
- sixbrx 13y ago
  Oh no, not adoration?!! Ando those poor customers, being forced to buy those apple devices!
- ceol 13y ago
  There is no American comparison to a chaebol, especially Samsung. Fanboy arguments aside, you can't compare the two. It would be like if Apple built your car, held your insurance policy, and owned the apartment complex you lived in. None of that comes close to having to buy digital apps on your Apple phone from Apple.
  - hahainternet 13y ago
    Apps, Phones, Tablets, Accessories, Cars, TVs, Home Entertainment systems. While I agree a direct comparison is unwarranted, the future of Apple's closed ecosystem is slightly worrying.

marincounty 13y ago

I don't think Job's would have allowed this to happen?

glasshead969 13y ago

IMO, you can't compare quarters of 2 companies with different product cycles. Samsung just released S4 while Apple's last product launch was 9 months ago.

protomyth 13y ago
Sure you can, that way you can get the "Apple took back its #1 position" clicks in the next couple of months.

lotides 13y ago

(Haven't used this account in a while, not sure if it's shadowbanned. Hope you can see this.) No matter what you think of Apple, or Google, and their respective ecosystems, I'm curious what people think of Samsungs popularity. They're a massive South Korean company that until recently was well known mostly for ripping off other companies products and out-marketing them (I'm not making this up, these accusations go back decades now covering a variety of consumer products, go ahead and Google it). Some people, myself included, don't really believe this practice ever ended. Say something were to happen to Apple and Samsung truly pulled away as the technology leader in the future. Are you as a consumer happy putting your eggs in that basket, so to speak? Do you think Samsung is going to embrace a culture of innovation, vision and design? I honestly don't see it. As a designer, I've stayed clear of Samsung products because they just come off as cheap (or expensive) imitations. As a market leader, you have the privilege to introduce consumers to exciting new technologies, UI innovations and ideas. Samsung isn't built for that. Their idea of great design is hiring 1,000 good designers and taking a little bit from each one. That's not how design works. You have to have a unified vision with a great idea behind it. Consistency is so important. I don't care if Apple is the leader for the next decade but I'd rather a more creative company took the reins.

r00fus 13y ago
Samsung coasts on Google's creativity in pushing Android. If they had to rely on Tizen or Meego (or god forbid Symbian), they'd be dead in the water... and that's not considering Google's very popular 1st-party Android apps (ie, GMail, Maps, etc). Without Google, Samsung has no trump cars in the hand. They know it, which is why they put any money at all in to other OSs. What is amazing is that Google is letting them dominate the Android market so completely. If Google hopes that a strong Samsung will ward off a strong Apple, they better watch their own back.

general_failure 13y ago

People are delusional if they think ios has better ui than android. The app store has a terrible ui on iOS where many times it doesn't load at all. And dumbing down the ui to one button is not so great.

cpprototypes 13y ago

Apple partly helped make Samsung popular with their ridiculous patent lawsuit. It was a lot of free press for Samsung.

lazyjones 13y ago

So the Android strategy of delaying/preventing OS updates to make customers purchase new smartphones after 1-2 years finally paid off.

hahainternet 13y ago
This is not an 'Android strategy'. Downvoting you for lying.

protez 13y ago

I don't think Apple designed iPhone to become the world's most profitable mobile phone maker. Apple just happened to become the one with its "Apple II attitude" to mobile computing. Compared to how Apple II got obsolete in the personal computer market in 1980s, iPhone/iPad has much brighter future from its solid ecosystem. It's just the time for Apple to start selling low-priced iPhone models to compete against Google in developing countries.