“Samsung might be be struggling. Its CFO recently told a group of reporters that the company’s upcoming earnings report wasn’t looking too good; meanwhile, the upstart handset maker Xiaomi may have overtaken it in China,” Sam Mattera writes for The Motley Fool.
“Although I believe Apple shareholders should be mindful of Samsung’s earnings, in so far as it reflects on the broader smartphone market, there are a few stark differences between the two firms. If Samsung’s mobile business begins to decline, Apple won’t necessarily suffer the same fate,” Mattera writes. “The biggest, most overwhelming difference between the two comes down to the operating systems powering their respective handsets. Samsung uses Android, an open source platform primarily developed by Google. Apple, in contrast, uses iOS — an operating system it develops in-house and [over which it] maintains exclusive control.”
“Last year, Horace Dediu took a look the profits generated by the PC market in the fourth quarter of 2012. Despite a relatively small sliver of the market, Apple captured 45% of the industry’s profits. The other players, despite selling many times more PCs, were left to fight over the remaining 55%, playing what was essentially a commodity game,” Mattera writes. “As other Android handset makers grow in competency, Samsung may suffer the same fate as the Windows OEMs of old. Apple, with its monopoly on iOS, could persevere.”
Much more in the full article here.