APPLE AND SAMSUNG: TWO GIANT SMARTPHONE MAKERS
Apple Inc. and Samsung are the two giant smartphone makers worldwide. Throughout the years, these two companies have changed the landscape of mobile phone industry.
But what these two giants have, making them stand out among its counterparts?
Founded in 1976, the consumer electronics company has a book value of which no firm has ever seen. Following it switched places with Exxon Mobil Corp. for many times on top of the list in the last few quarters, the former’s share price since then has increased while the latter’s has decreased. Because of that, Apple has around $200 billion advantage.
The US-based company generates income primarily on iPhones and MacBooks. The phones outmatch the laptops 5-to-1, but the massive margins on the latter make the competition more or less move. Apple sells fewer phones than Samsung granted it is netting near the $400 profit per unit. As of 2014, the company has $182.35 in sales.
This multinational conglomerate firm based in South Korea, according to some estimates, is responsible for ⅙ the country’s gross domestic product. Founded in 1938, its main subsidiaries include construction, colossal life insurance, and shipbuilding businesses. But Samsung Electronics is the largest moneymaker across the world.
Also called Samsung, the company has around $154 billion market capitalization, almost a quarter the size of Apple’s. But in terms of sales, Samsung is considered the biggest electronics multinational worldwide, with $218 billion in sales as of 2013.
Its profit is more evident. Other divisions have started accounting a greater portion of Samsung’s profits in recent quarter. Since leading the charge in 2014, the company’s semiconductor unit increased its profits by around 82% over last year. However, Samsung’s operating profit fell in general over the previous year.
Apple and Samsung have long-standing competition that became more aggravated with time. In 2001, Apple sued Samsung, stipulating the Galaxy S and Galaxy Tab crumpled the iPhone and iPad, respectively. A week later, Samsung countersued Apple, claiming its competitor used its wireless networking technology. Both firms ended up suing each other in courts on four continents. Last year, Apple won $929 million judgment in its initial North American suit but Samsung appealed. Then, Apple secured another victory in a second lawsuit. Both firms on that summer reached certain détente, dropping all cases outside the United States. However, they continued their courtroom battles in countries where litigation is the national diversion.
The oddity about their case – or series of case – is both of them have a lucrative and cooperative relations. Samsung, through its several subsidiaries, sells portions for Apple mobile devices without a $8 billion authorization a year. In times of greater demand, Apple can escalate its orders with Samsung and let smaller rivals worry on where to look for parts.
The South Korean company framed most of its A4 and A5 processors on Apple’s mobile phones. But these processors’ heyday was many generations ago. Apple now uses A8x chip in its latest version of the iPag Air, a processor made by another company.
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