For the past few years, Apple has seethed as it watched Samsung grab the buzz and market share lead with its Galaxy phones.
It wasn’t just losing that bothered Apple. It was getting spanked by a company Apple felt had essentially copied its best smartphone and tablet innovations. Apple launched a global patent litigation war against Samsung that produced a few victories but failed to fundamentally change the competitive dynamic.
Now, it turns out, Samsung appears to be in free fall. And it’s collapsing all on its own, without any help from Apple’s legal eagles.
Samsung has warned that its third-quarter earnings were going to be even worse than previously expected. In a press release, Samsung said revenues would fall by 20.5 percent and profits would drop 59.8 percent.
The projected profit of $3.8 billion is below analysts’ consensus estimate of $5.2 billion, according to Thomson Reuters. And, Reuters notes, it appears Samsung is headed for its first annual earnings drop since 2011.
Samsung is getting pummeled in China by lower-cost smartphone rivals. And the company got more bad news this week when the U.S. International Trade Commission voted to investigate allegations by Nvidia that some Samsung mobile gadgets may violate some of its graphics processing unit patents.
In a statement emailed to reporters, Samsung said: “The company is preparing new smartphone lineups featuring new materials and innovative designs.”
In the meantime, Apple has got its mojo working. Apple’s stock is trading near its all-time high. It just said it sold a record 10 million new units of the iPhone 6 and iPhone 6 Plus on the opening weekend. And it recently said it had received 4.85 million pre-orders for the new iPhones in China.
And while the Apple Watch won’t go on sale until some time next year, it’s made everyone forget about Samsung’s wearables for the moment.
Of course, Apple has its own challenges. The iPad seems to have stalled a bit in terms of sales. And the iCloud celebgate ordeal hasn’t buffed Apple’s reputation for services, which wasn’t all that hot to start with. (Cough, Apple Maps, cough).
But against the context of Samsung’s decline, many of Apple’s issues seem less than catastrophic.
The questions about Apple’s future revolve around how fast it will grow. That’s the kind of problem Samsung would love to have right now.
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