Market competition
Samsung and Apple have always been competitors when it comes to smartphones. Each year both of the companies have close competition, and the year 2019 is no different. Now It’s not only Samsung that Apple has to worry about because the Chinese manufacturers such as Huawei, Oppo and Xiaomi has also joined the competition. Now Apple has to worry about other competitors as well. In terms of sheer numbers, Samsung has sold more smartphone compared to apple in the year 2018. However, Apple went ahead due to Samsung’s strategy of selling budget-friendly phones as well. On the other hand, Apple just sold its flagship phones which has increased the revenue of Apple compared to Samsung. Even though Samsung has sold more smartphones compared to Apple, it was still behind Apple in terms of revenue.
Apple and Samsung
Apple is focused on the expensive mobile phones that offer a high-profit margin to them. Each year new mobile phones are introduced by mobile companies with the latest specification and price rate. While other smartphone manufacturers introduce different smartphones at different prices. Apple on the other hand release only high end mobile phones with a high price tag. Other mobile phones manufacturers such as Samsung, Xiaomi, Huawei and Oppo focuses on both budget-friendly and high-end phones. Apple is selling fewer units than Samsung, but the profit makes up for this loss. Apple is focusing on the customers that have more credit and are willing to pay for a quality phone. On the other hand, Samsung and other companies are taking all the markets of the world into consideration. The strategy of Samsung and Apple has remained this way for a long time.
Why is Apple ahead?
It is not necessary that high-income customer can lead to higher revenue in the long run. The low-income population of the world also holds trillions of incomes and the sheer number of the low-income population can make up for what is lacking in income. To get these trillions of income Samsung and other mobile phone companies came up with the solution by manufacturing low-end smartphones. The low-end smartphone not only cost less in term of the price but their manufacturing cost is also less compared to high-end smartphones. The low-end smartphones have the problem of low-profit-margin, and the users of such phones expect high specs at a lower price. Such market trend sends the smartphone manufacturers in competition and pushes them to offer high specs at a lower price ultimately reducing the profit. Even when Samsung and other companies sell more unit their profit margin is less than Apple. The target audience makes all the difference when it comes to profit margin. Though Apple has been getting more revenue, Samsung is closer to it than ever before.