Apple is losing out to Samsung
For over a year dominance of the $219 billion smartphone market has been keenly fought between Apple and Samsung. At the end of 2011, Apple was just ahead following strong sales in Q4 of its iPhone 4S where it sold 37m units and had 23.5% of the global market, just ahead of Samsung who sold 36m units of its Galaxy Note and Galaxy S2 phones which gave it a 22.8% market share, according to a report from market research firm IDC. In 2012 there has been a major shift in Samsungs favour and now it is the clear leader with sales in the first quarter of this year of 44.5m units, way ahead of Apple’s 35.1m units.
Samsung now looks set to move even further ahead with its new Galaxy S3 which went on sale in Europe on May 29 and is being released in the US on June 21; nearly two weeks ahead of the release of Apple’s new iPhone in early July. In desperation Apple has filed a motion in a California court to issue a restraining order preventing Samsung from selling it in the US, over claims that it infringes two of Apple patents. This is rich coming from Apple considering that it was only June of last year that they were found guilty for infringing Nokia’s wireless technology patents and forced to pay substantial damages.
That Apple has resorted to trying to issue a restraining order on a new smartphone from a rival shows how desperate it is; especially as according to industry experts it has a weak case with James Song, an analyst at Seoul based Daewoo Securities who stated “I don’t think Apple will succeed, Smartphones aren’t uniquely Apple’s products any more. It won’t be easy to find convincing reasons to block sales” in an interview with Bloomberg.
While Apple has been silent on the new Galaxy S3, it has publicly admitted that it’s worried claiming in its filing that it could cause it “irreparable harm,” citing press reports that carriers had already sold more than 9 million units in the US through pre-orders. These concerns are not unfounded as the S3 features some significant improvements including an infrared scanner which only dims the screen when you look away and hardware features the iPhone can only dream of such as a quad-core processor which makes it 5 times faster than the S2 and will be the first smartphone with 2GB of RAM and 32GB of storage.
In the mean time the two companies continue to do business with each other as Samsung counts Apple as among its largest buyers of chips and display screens while Apple relies on Samsung for mobile components but Apple has a lot to do to prevent it falling behind. This is its biggest post Steve Jobs challenge facing the company and whether or not it will recover its lead in the smartphone market remains in doubt.