In China, Apple’s focus pays off while Samsung feels painful squeeze

“The mobile industry has long held that Samsung’s broad range of mobile devices makes it nimble in changing markets, while Apple loses out by rigidly sticking to its high-end gadgets,” Edwin Chan, Christina Farr, and Tony Munroe report for Reuters.

MacDailyNews Take: “The mobile industry.” In other words, those who Apple schooled so badly the only way they can survive is by knocking off Apple’s iOS and iPhone.

“But manufacturers’ recent earnings reports challenge those assumptions, at least in China, the world’s biggest mobile market – where the roll-out of the next-generation 4G wireless network has been touted as a booster for smartphone makers seeking growth as demand in advanced countries falters,” Chan, Farr, and Munroe report. “Apple Inc’s latest quarterly results showed sales of its high-end phones in China grew at nearly twice the pace analysts had expected. Meanwhile, budget offerings from Chinese firms won at the cheaper end, effectively squeezing industry leader Samsung Electronics Co Ltd.”

“Even as Apple posted strong China sales, the South Korean tech giant warned this month that quarterly earnings could drop 25 percent due to an inventory build-up of cheaper phones and weaker demand for 3G products in China,” Chan, Farr, and Munroe report. “That could suggest that Samsung’s strategy of offering everything to counter every price point may actually have left it stranded between being a price competitive brand and a premium gadget seller. By contrast, Apple has studiously cultivated its high-end aura, and its iPhones and iPads continue to command a higher price tag on average than its rivals.”

“Samsung’s high-end smartphones and tablets such as its Galaxy S range, its answer to the iPhone and iPad, accounted for just a quarter of its January-March sales volume in China, while devices priced below 500 yuan ($80.75) made up the vast majority, according to data firm Canalys,” Chan, Farr, and Munroe report. “At the same time, Samsung has come under pressure from the rise of Chinese budget handset makers like Xiaomi, which this week released the Mi 4, its new 1,999 yuan 4G handset.”

MacDailyNews Take: Slavish Apple copier Samsung is being squeezed to death between Apple from the top and by a more efficient slavish Apple copier from the bottom. Perhaps there is justice in this world after all.

“Apple said this week its third-quarter revenue was buoyed by unexpectedly strong results in China, where iPhone sales jumped nearly 50 percent in April-June,” Chan, Farr, and Munroe report. “‘A lot of China Mobile customers have been holding on to old phones, so when the high-speed 4G came out they naturally switched to a 5S or 5C and upgraded. This trend will only become more apparent with the iPhone 6’s release,’ said C.K. Lu, an analyst at Gartner… ‘Right now, what we’ve seen is just a small part of the users who want to upgrade to 4G,’ said Lu. ‘The broader set of consumers, the relatively mainstream ones who want a large screen, are still waiting for the iPhone 6. So when that comes, the effect on high-end brands like Samsung will be even bigger.'”

Read more in the full article here.

MacDailyNews Take: May the pain coming to Samsung pack thermonuclear intensity.

As for what “the mobile industry has long held,” they’re obviously reading the wrong analyses:

Some people haven’t been paying attention for the past three decades, so I have a newsflash for them: Apple sells premium products at premium prices to premium customers… Whoever thought Apple was going to play at the bottom of the barrel either hasn’t been paying attention or was born yesterday. Wake up or have a happy birthday.SteveJack, MacDailyNews, October 23, 2012

[Thanks to MacDailyNews Reader “jpbeads13” for the heads up.]


  1. what ever happened to the widespread analyst and tech pundits claim that Apple will die if it didn’t produce ‘cheap’ devices?
    Anybody apologize yet for their way wrong claims?

    Apple fans had told them over and over again : “remember netbooks?”

    (btw apple doesn’t produce ‘cheap’ but it produces best value for money. China the biggest manufacturer in the world understands value for money, understands quality vs ripoff, any Chinese who can afford it goes for iPhone vs Samsung top of the line POS . )

    Wait until the ‘big’ iPhone is released (many Asian use phones as primary computing device) and really see the hurt on ripoff-sung.

  2. Everytime I see a Samsung in the wild and I take a look at the owner, I can’t help but feel sorry for their affliction. Being fat, stupid and drunk is no way to go through life.

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