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Tech Arguments 2012

Bad Blood: Apple vs. Samsung

Apple and Samsung compete in smartphones, tablets and laptops, though also need each other on component side

By Mikael Ricknas, IDG News Service
December 03, 2012 07:09 AM ET

IDG News Service - Apple and Samsung Electronics just don't seem to be able to get along. Apple under Tim Cook has become choosier about picking its fights, but the company shows no signs of wanting to settle with Samsung as they continue to battle over smartphone and tablet buyers.

Read Network World's other tech arguments.

The bad blood between Apple and Samsung is turning into a classic tech battle. The two companies continue to duke it out in stores and courts, while their component relationship has seen better days.

"It is a close and well-fought battle," says Neil Mawston, executive director at market research Strategy Analytics.

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That Apple fights on with Samsung, but settled with HTC makes sense. In stores, Samsung is without a doubt the single biggest threat to Apple, according to Ben Wood, director of research at CCS Insight.

"The recent settlement with HTC signals that Apple is becoming choosier about picking its fights ... On the flip side, Apple shows absolutely no signs of wanting to settle with Samsung," Wood says.

For HTC, having the distraction of ongoing litigation every time it puts out a new product or launch in a new market has been extremely unhelpful for its business, according to Wood. Apple possibly settled in order to better position HTC against Samsung, he says.

Samsung took advantage of the announcement by getting a court in California to force Apple to produce documentation detailing the settlement, claiming it is relevant to its own patent dispute with Apple.

However, the documents detailing the agreement will only be available to the attorneys in the patent lawsuit.

Outside the courts, Samsung has taken competition in the smartphone market to a new level this year. Thanks to the success of the Galaxy S III -- which was the best selling model during the third quarter -- Samsung is now catching up to Apple's share of profits, according to Mawston.

"Samsung and Apple, globally in the third quarter, accounted for 98% of the profits in the mobile phone industry ... Apple's share is 52% and Samsung's 46%," he says.

Apple's iconic brand and exceptionally strong product portfolio in the high-end complement its excellent distribution system.

"Even if consumers think there are other companies that can offer them different or better features, they still feel very locked into the iPhone while at same time loving the familiarity it offers," Wood says.

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.

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