The two tech giants are engaged in an all-out struggle for market supremacy. Samsung may sell more smartphones, but Apple generates more profit. Where will each turn next?
PARIS — Come September, with the simultaneous release of the iPhone 7 and Galaxy Note 7, tech giants Apple and Samsung will launch the next great battle in their now decade-long war for smartphone supremacy.
Together, the companies dominate the market, though in terms of units sold, Samsung has a clear edge right now over its U.S. competitor. So far this year, the Korean brand has sold 324.8 million smartphones. Apple cleared 231.5 million. The gap widened in the first quarter with a strong drop in iPhone sales.
The trend marks a reversal of fortune for Apple, which kicked off the war in 2007 with the launch of its first iPhone and maintained its edge over Samsung for years. It may also be the reason that Apple, which has been buying chips from Samsung for its iPhones and iPads, decided for its new phone — the iPhone 7 — to employ the services of TSMC, a Taiwanese company.
Samsung may sell more smartphones than Apple, but in terms of revenue or profit, the U.S. company dominates. "Samsung generates 15 to 20% of operational profit on its top-end smartphones, while Apple makes doubles those figures, according to estimates," says Leslie Griffe de Malval, an analyst from Fourpoints.
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Photo: Eduardo García Cruz
Unlike Apple, which concentrates on high-end products, Samsung has a whole range of smartphones, including basic and mid-range products. The Korean also depends less on its smartphones than does Apple, which earns two thirds of its revenue from iPhones.
On the stock exchange, the market capitalization gap that had widened between the two countries since the advent of the iPhone has significantly tightened in recent months, from approximately $600 billion in 2015 to $328 billion.
The telephone titans also compete over intellectual property. In 2012, Samsung lost a $1-billion patent case against Apple. But two years ago, the old enemies buried the hatchet by putting an end to their respective judicial proceedings, except in the U.S. And in the license field.
Another front in their decade-long war is the public relations field. Samsung, the master of media hype, has become, over time, one of the largest advertisers in the world, with public relation budgets that reach billions of dollars. It even began using comparative advertising against Apple, mocking the latter's products in favor of its own.
Apple may spend less than its Korean rival on advertising, but still leads the battle of the brands. The U.S. firm has long stood out for its stellar marketing and iconic product launches, every September, that its competitors still can't seem to match.