After four years from when Apple held the record for the most profitable smartphone vendor, Samsung managed to take the lead. The new and successful Galaxy S4 helped Samsung to top Apple in the second quarter of the year, becoming the world’s most profitable handset vendor.
Market researchers, after they analyzed some numbers, concluded that Samsung had a $5.2 billion in operating profit, while Apple had only $4.6 billion. This is the first time when the Korean firm has overtaken the U.S. rival. One theory of why Apple lost the first place is that the launch of the new iPhone 5 wasn’t such a success, and also the tougher competition that exists now on the smartphone market. Another reason is the strong demand for Samsung’s Galaxy handsets, because is better and cheaper than iPhone.
Apple decided to use a new strategy. Because they are under pressure, they decided to launch more iPhone models at lower prices, or making them with larger displays, hopping that it will eliminate the competition and will recapture the lost profits from the second quarter of 2013. Even Tim Cook, the chief executive from Apple, said that they are thinking to allocate a new budget for their smartphones, starting this autumn.
Because the price of smartphones increased in the last year, the buyers are now looking for other options, such as LG, Sony, ZTE and even Huawei.
These numbers refers strictly to phones and do not include other products from Apple and Samsung. The numbers that researchers have analyzed are estimated and were not provided by the companies themselves, but still, it makes it clear why Apple pursued Samsung so aggressively over the patent violation allegations.
As a conclusion, I could say that although there are other competitors on the market, Apple and Samsung are still making more than 100% profit on the smartphone market.
