How Apple, Inc. went thermonuclear on Samsung, erasing Android’s primary profit center
“After failing to do much more than embarrass Samsung Electronics in years-long legal battles over patent infringement, Apple has rapidly obliterated Samsung’s mobile division profitability, rendering it as barrenly unprofitable as every other Android or Windows licensee with razor thin margins in the phone, PC and tablet market,” Daniel Eran Dilger reports for AppleInsider.
MacDailyNews Take: An iPhone with a larger screen option will hurt Samsung immeasurably more than myriad, unending traipses through the legal morass. – MacDailyNews, May 2, 2014
“While Apple’s critics might prefer to credit Xiaomi for Samsung’s decline, the South Korean giant’s plummeting profitability is not due to a major drop in its low priced, high volume phones and tablets but rather an implosion of Samsung’s profitable, high end Galaxy S and Note models that directly compete with iPhones,” Dilger reports. “Earlier today, Samsung announced an incredible 73.9 percent drop in its mobile division profits for Q3. Analysts have been noting through 2014 that the company faces increasing competitive pressure from both Apple on the high end and from high volume sales of lower end models increasingly being produced by Chinese companies, in particular rising star Xiaomi.”
MacDailyNews Take: Xiaomi makes Samsung look like original thinkers. So, as with personal computers, the only companies having any success are the innovator and those who steal IP and knockoff the innovator’s products.
“Samsung is clearly facing a battle on both fronts. However, based on the numbers the company has reported, the catastrophic drop in profits Samsung suffered in the third quarter has come from a thermonuclear assault by Apple targeting its core revenue and profit generators,” Dilger reports. “Further, the damage Apple caused Samsung will only get worse for the company as its remains are ravaged by other Android licensees.”
