top of the world

Apple and Samsung might be sharing the crown for top smartphone maker, with both companies reportedly shipping 74.5 million units in the last quarter, there are still wide discrepancies between the financials of the two giants. While Apple is reaching new heights following the record-smashing financial results for the last quarter it reported on Tuesday, Samsung is reaching new lows as its mobile division is crumbling to turn a profit, a situation that is the result of two very different strategies.

Samsung Electronics reported a 36% year over year drop in operating profits for the last quarter. The company was brought down by its mobile division that was hit with a 64.2% drop in profits, effectively going from $5 billion in the year ago quarter to only $1.8 billion this last quarter, its worst numbers since 2011. At the same time, Apple’s operating profits went up by almost 37% to reach a record $24.2 billion.

Squeezed between low and high end device makers, Samsung is still selling smartphones by the truckload, but it’s making less and less money doing it. Its Galaxy line, which is where the company usually generates most of its profits, has met fierce competition from Apple and its larger iPhone 6. As for its low end devices, they met strong competition from rivals, such as Xiaomi in China.

Apple has never been interested in market shares because as we see again today, being the top seller doesn’t necessarily help your bottom line. Yes, Samsung sells as many devices, and maybe even more than Apple, but it doesn’t make any money doing so. This race for market share can go on for as long as you have a cash cow to pay for it all (the Galaxy line), but what happens when your big money maker starts crumbling? How do you then finance your market share expansion? And to what end?

In the meantime, Apple hasn’t been focusing so much on putting one of its phones in everybody’s hands, but rather on making sure that every device that lands in someone’s palm is actually making money. An incredible amount of money! This is paying off today.

Yet again this situation illustrates how different both companies are. Samsung makes products. Apple makes luxury products, and as any luxury company, its margins are outrageously huge. Of course the market needs different companies with different strategies to address different needs. I’m not suggesting Samsung should be more like Apple. I’m merely highlighting that one strategy is currently paying off much better than the other. But this is business, and Apple won’t be riding high forever. It might as well enjoy while it lasts.

  • El Matador

    Insert tired Samsung pun here.

    • Steven Code

      I would but my battery is about to run out

      • El Matador

        Well played sir. Well played.

    • Deep down even Samsung fans hate Samsung, It shows.

      • El Matador

        Absolutely! to clarify i’m not a Samsung fan, just tired of the same samsung to jokes.

      • Ara Rezaee

        You mean Samesung jokes…

  • leart

    Just just imagine if apple will decide to produce even a gama of low end mobiles to cover all possible customers like samsung do…

    • Apple will never do this since producing cheap hardware means producing crap hardware. This is why Apple won’t make a netbook…

      • leart

        Never say never, remember its business and apple is in terrific position to do so,
        I’m not saying crapy hardware, just to make a simple phone with just the basic features and with the price around 150$… in this moment anything with the logo of apple will sell like crazy..

      • askep3

        I after with u, but I also feel that if Apple makes a cheap product, the value, status, etc. of the “Apple logo” will also go down

      • leart

        maybe but for some years will make money like no one so… it worth risking.
        I am not saying to produce low quality products, simply with a low price

      • Bugs Bunnay

        NEVER!

      • leart

        something like IPOD TOUCH vs IPOD SHUFFLE.
        if you have the money buy ipod touch

    • Andrew

      They did; it’s called the iPhone 5c.

      • leart

        yeah but it was not cheap, im talking about 100-150 $ product, QUITE DIFFERENT

      • Andrew

        Well, it’s $0 on-contract now. But I know what you mean.

  • I didn’t think it was possible for Samsung to get any lower but apparently it is

    • Juschan

      well somehow microsoft never hooked me haha i still dont get the point why people would use windows on a pc and also on a phone ? but i have to say the lumia by nokia was a good job

    • Rowan09

      I’ve said it for years Samsung should have used it’s popularity with Android and push Tizen. Samsung got a little too complacent and was competing with themselves, by releasing too many phones a month.

  • Jason Baroni

    Now we are talking!

    • Digitalfeind

      Yep

      • coLin

        you forgot the beep

  • iPhoneWINS

    looloololllolol

  • iPodDroid

    If anyone to blame for Samsung’s fall from power is Samsung themselves.

    • Smartest Dev

      Edward! Sorry, but I liked Code Geass much better.

  • Dante Arellano

    So many people wants an iphone but they cant get it so they have to buy a samesung til’ now that is more easy to have one i think androide and samesung has to died like bluebarry.

  • As consumers, should we be celebrating this? Lol a part of me is excited and amazing at such a feet, and another says they need better products. I can’t say there is a better phone out, but can say that their are better features, i.e. battery. I’m saying that as I type on my Macbook Pro 15 inch and charge my 5s.

    • Kr00

      Yes. Samescum don’t innovate, they just copy. So with them out of the way, real phone manufacturers can get some retail air to push better products, and I’m not talking about Apple either. In my book HTC make the best Android phones on the market, but never received the spotlight for its good work.

      • George

        HTC made the best phone period, don’t even defend apple when their design for the iPhone 6 is a complete rip off of the HTC one m8.

      • Kr00

        If we were to look at who ripped off who from the beginning, we’d be here for a week. They all copied the original iPhone, but changing the screen size is hardly world shattering innovation.

      • Abi Manyu

        righhhttttt, because HTC is the first one dividing the back of their phones into 3 parts… take a look at iphone 5 and then iphone 6…. compare it to htc one x (or any htc pre m7) and then one m7/m8… which one looks more similar??? even a 5 years old can tell that ip5 to 6 is way similar in design compared to htc one (pre m7) to completely different m7/m8. And guess what, ip5 is older than m7/m8.