IPhone Fever? Don’t Count Samsung Out

The following is an excerpt from an article in:


The New York Times
Saturday, September 22, 2012

IPhone Fever? Don’t Count Samsung Out

By JAMES B. STEWART

By many measures, Samsung Electronics should be on the ropes. Last month, it lost an important patent battle with its rival Apple after a jury in the United States ruled that Samsung had illegally copied aspects of Apple’s groundbreaking iPhone. Apple introduced its newest model, the iPhone 5, to enthusiastic reviews and a worldwide consumer frenzy, with customers lining up to buy the new model days before it arrived in stores on Friday. This week, Apple shares hit a record high and cracked the $700 threshold.

So why is Samsung not only holding its own, but thriving?

Even as the Apple juggernaut has rolled over Research in Motion, which makes BlackBerry handsets, and Nokia, Samsung reported record earnings for its latest quarter, which ended June 30. Its handset profits, fueled by the introduction of its high-end Galaxy S III model in May, leapt 75 percent over the previous year. Samsung’s stock has gained over 65 percent in the last year and was trading this week on the Korea Exchange at more than 1.3 million won, also close to a record.

Samsung can’t claim the intense media coverage, the passionate fan base or the cult of personality that grew up around Steve Jobs. But the giant South Korean manufacturer has built an impressive lead in global mobile phone sales. The research firm IDC reported that Samsung had 24.1 percent of the global handset market compared with Apple’s 6.4 percent at the end of the last quarter. Samsung also had a commanding lead in the lucrative smartphone market: 32.6 percent compared with Apple’s 16.9 percent, although the gap is likely to narrow because of the iPhone 5’s introduction.

By contrast, Nokia’s share of the smartphone market withered to 6.6 percent and Research in Motion, whose BlackBerry devices once accounted for nearly 20 percent of global smartphone sales, was no longer ranked among the top five producers.

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