Apple and Samsung: Frenemies?
Apple and Samsung are two of the most successful tech giants of today, in 2013 earning a combined revenue of over $385 billion. Over the years both Apple and Samsung have fought for market share in the booming technological sector and the development of smartphones has only intensified their competition.
But are these really fierce rivals as they would have you believe, or are they actually friends?
The iPhone, perhaps the most popular item in Apple’s arsenal is selling at a staggering rate, with sales of more than 34,000 per hour in the December 2014 quarter. With these astounding numbers Apple now holds 45% of the market share for smartphones in Australia with Samsung being second largest at 40%. No other company comes even close to these two behemoths in the smartphone category! But if we take a closer look at the iPhone, their fierce rivalry betrays the surprising cooperation behind the scenes.
Samsung is one of the world’s leaders in electronic manufacturing, controlling significant portions of the technology supply chain, and given this, it’s hardly a surprise that Apple needs Samsung. The build and components of Apple’s iPhone 4 was 26% Samsung, with Samsung contributing the majority of the memory and processing components. Currently, the iPhone 6 still uses Samsung made processors. With this in mind Samsung is making a profit from 85% of smartphones sold in Australia. I’m sorry to upset any Apple fanboys out there, but a large portion of your Apple…is actually Samsung.
But then what is it that makes an iPhone special? If an Apple iPhone is more than a quarter Samsung under the hood, what is it that makes an Apple an Apple? Consumers as a collective have spoken time and time again, asserting that it’s the intangible qualities like design, and experiential qualities that make things special. We don’t buy Apple because we like the things on the inside, we buy it for the way it makes us feel on the outside.
This symbiotic relationship between Apple and Samsung yields great advantages to both parties with Samsung’s ability to produce quality and cost-efficient parts for Apple, and Apple’s market muscle allowing Samsung to thrive off the iPhone’s revenue. It’s easy to see why behind closed doors Apple and Samsung are more friends than enemies.
All images by: Kārlis Dambrāns