Apple and Samsung have been involved in a bloody legal battle over the past few years over technology patents. Now, it seems that the two technology companies could be entering a new war, this time over their profitability.
Despite leading the smartphone marketplace in terms of total profitability for three years, Apple is now the second-most profitable smartphone manufacturer. Samsung, the South Korean conglomerate responsible for the popular Galaxy smartphone, hit an estimated operating profit of $5.2 billion USD during the second quarter of 2013.
Apple, on the other hand, recorded an estimated profit of $4.6 billion, putting it in a close second place behind the South Korean technology firm. While these numbers exclude sales of non-smartphone devices – which, in Apple’s case, includes a large range of PCs and tablet devices – they show an important industry trend.
They also reveal a realistic cause for Apple’s seemingly never-ending fight with the South Korean firm over allegations of patent violation. With very few competitors achieving profitable results in the smartphone industry – many others are posting record losses from smartphone sales – Apple sees Samsung as its only competitor.
The numbers also reveal a truth that’s becoming increasingly important for Apple – a company once best known for its innovative product line-up. With little in the way of major innovation in the iPhone line, Apple faces a difficult future if it can’t find a way to compete with Samsung’s low and high-end smartphone catalogue.
With a blogosphere that’s buzzing with rumours of a lighter, smaller iPhone or an upsized mobile device, Apple certainly has the potential to elevate its profits if its next product is a success. Given its somewhat stagnant approach to innovation in the last year, however, it might take a miracle to reverse its current trend.