Here's How Samsung Outfoxed Apple

Apple (AAPL) has been one of the best performing stocks over the last decade. Apple became popular mainly due to its series of iPhones, but now it appears that Apple’s iPhones have peaked as analysts have predicted further sales decline for the device. On the contrary, Apple’s foremost competitor, Samsung (SSNLF), is faring a lot better than Apple for the time being.

Samsung recently introduced its new flagship phones Galaxy S7 and Galaxy S7 Edge. Both the devices comprise major enhancements compared to its prior models Galaxy S6 and Galaxy S6 Edge.
As a result, the company has observed robust sales of Galaxy S7 and Galaxy S7 Edge.

The company’s yearly revenue surged to $170 billion from $116 billion in the last seven years. In 2013, the operating profit reached $35 billion, enhanced by the outstanding sales volume as well as margin of the smartphone segment. On the other hand, the company’s top-line declined from $188 billion to $170 billion in 2015, but the operating profit was almost constant at $22.4 billion.

However, the operating income escalated 13 percent to $5.6 billion, as per first quarter results. This was mainly due to the rebound in the smartphone division operating profit. At present stage, the company’s smartphone market share is over 20 percent.

Apart from this, as per Bloomberg, Samsung may be working on a next-generation bendable smartphone making use of organic LEDs, and is expected to hit the market anytime next year. Moreover, reports from Bloomberg also state that this smartphone will be comprised of 5 inch display which can be converted to a tablet of 8 inches by unfolding the bendable display.

As a matter of fact, Samsung has always defeated Apple in the OLED race. The company has been using OLEDs for various generations of high-end smartphones, whereas Apple has gradually been working on substituting its LCDs with OLEDs due to their lighter and thinner displays as well as superior viewing experience.

When it comes to technological advancements in smartphones, Apple has always almost lagged Samsung. Although Apple’s moat has allowed it to perform better than Samsung till now, it looks like the future is going to be a lot different.

The smartphone industry is close to peaking and manufacturers will really have to up the ante to convince users to shell out hundreds of dollars every year on upgrading their phones. Samsung has considerably improved its latest flagship phones, whereas it is still yet to be seen what Apple brings to the table. However, if reports are to be believed, Apple’s next iPhone will not have any new significant feature that will make it a “must-have” phone for end users.
Published on Jul 25, 2016
By Akshansh Gandhi

Copyrighted 2020. Content published with author's permission.

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