Business Technology

Friday 18 August 2017

Apple overtakes Samsung in the global smartphone battle

The Apple iPhone 6 range.
The Apple iPhone 6 range.
The new Galaxy s6

Anya George Tharakan

Apple sold more smartphones globally in the fourth quarter than any other company. That means the Californian company has overtaken Samsung for the first time since 2011, according to research firm Gartner.

Apple sold 74.83m smartphones to end users worldwide, ahead of the 73.03m phones sold by Samsung, according to Gartner's report this week.

The success of big-screen iPhone 6 and 6 Plus drove Apple's sales in its first quarter ended December 27. The company reported a profit of $18bn for the period, the biggest ever reported by a public company, according to S&P analyst Howard Silverblatt.

Apple's smartphones sales jumped about 49pc in the fourth quarter, according to Gartner. In contrast, Samsung, the market dominator since 2011, recorded a fall of nearly 12pc.

In January, the company posted its fifth consecutive quarter of earnings decline in the mobile division.

"Samsung continues to struggle to control its falling smartphone share, which was at its highest in the third quarter of 2013," said Anshul Gupta, principal research analyst at Gartner.

Besides losing market share to the costlier iPhones, the Korean company has been battling low-cost Chinese vendors such as Xiaomi and Huawei.

On Monday, Samsung unveiled its new range of slim-bodied Galaxy S smartphones, made from aircraft-grade metal.

The new phones are a bid to reclaim the throne of undisputed global smartphone leader from Apple. Designed from scratch in an operation dubbed "Project Zero", the Galaxy S6 and its curved-edges variant are critical for Samsung's plans to reverse plunging smartphone revenues that led to its first annual earnings fall in three years in 2014.

"We listen to our customers and we learn from our missteps," JK Shin, Samsung's president and chief executive told a packed hall in Barcelona's convention centre this week.

"I may not be the best public speaker. That is because my first language is engineering," he said.

Samsung has yet to disclose pricing or where the phones will appear first but said that the phone will go on sale in 20 countries. Stand-out features include casing made from light-weight metal used in airplanes, a step up from the plastic that disappointed many critics of the S5, and Corning Inc's Gorilla Glass on both front and back.

The Galaxy S6 upgrades the previous version's camera and screen, and strips out many of Samsung's unpopular in-house software apps that infuriated users by gobbling memory. It and the Galaxy S6 Edge will also be powered by Samsung's new 64-bit, 14-nanometer Exynos processors, analysts said.

"This offers the promise of delivering better overall margins for Samsung and, in time, differentiated performance from rivals, as Apple has achieved" with their own chip used in iPhones, said Ian Fogg, an analyst at IHS Technology. "But it's a high-risk, high-reward strategy," he added.

In its previous Galaxy phones Samsung used a processor from Qualcomm. The phones are also the first from Samsung to support wireless charging as a standard feature.

In another departure, they have non-removable batteries to make them slimmer. To compensate for the lack of interchangeable batteries, Samsung says a 10-minute charge by cord gives four hours of power.

Samsung is also touting the Galaxy S6's compatibility with a new mobile payments system it is preparing to launch in the US and South Korea in the second half of this year, using the technology of recently acquired startup LoopPay. The system, in partnership with major US banks and credit card companies including Visa and MasterCard, will allow users to make mobile payments through magnetic strip-card readers without an external accessory needed for other models.

The rival Apple Pay system, launched in the US in September and rapidly winning retailer support, requires merchants to install near-field card readers, limiting its reach as contactless credit cards have been slow to take off there. The new Samsung flagships will also come with free two-year, 115-gigabyte cloud storage through Microsoft's OneDrive, suggesting better relations between the two.

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