Bad Blood: Apple vs. Samsung

By , IDG News Service |  Legal

Samsung also has a strong brand; strong distribution worldwide; good pricing and excellent component sourcing, thanks to the fact that the company makes many of its own components. But above all, it has a product portfolio that covers all segments, according to Mawston.

The competition between the two companies could get even more venomous next year, if Apple were to launch its long-rumored TV set.

What sets the Samsung and Apple battle apart from others is their component relationship; Samsung remains the manufacturer of the processor for the iPad mini, the iPad and the iPhone 5.

Severing the ties completely could have negative repercussions for both companies, Wood and Mawston agree:

"Apple is a phenomenally important customer on the component side. In order for Samsung to remain a leader it has to invest an enormous amount of money in R&D, and the company can't do that just selling to its own mobile phones," Wood says.

"Apple gets good quality components from Samsung, so it may find that components from other vendors aren't as reliable. The recent display problems may have been one example of that," Mawston says.

Neither Apple nor Samsung is invincible. Samsung may be the second largest tablet vendor, but its products haven't been as successful as its smartphones.

"It is still chasing Apple," Mawston says.

Also, success in the enterprise smartphone space continues to allude Samsung.

"The big problem is that Samsung has such a strong focus on Android, which enterprises are not especially fond of," says Leif-Olof Wallin, research vice president at Gartner.

Apple, on the other hand, is heavily dependent on operator subsidies.

"If operators were to remove their subsidies over night Apple's shipments would go down very quickly," Mawston says.

The company also doesn't have a phone for the low-end pre-paid segment of the market.

The 2013 smartphone wars will be between Apple and Samsung during the first half of the year, at least.

"It is an event driven market ... If Samsung and Apple don't execute well on upcoming products plenty of competitors will be ready to pounce," Mawston says.

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