Samsung earnings implode, Apple may be getting a laugh at last

For the past few years, Apple has seethed as it watched
Samsung Electronics grab the buzz and market share
lead with its Galaxy phones.
It wasn’t just losing that bothered Apple. It was getting
spanked by a company Apple felt had essentially copied
its best smartphone and tablet innovations. Apple
launched a global patent litigation war against Samsung
that produced a few victories along the way, but failed
to fundamentally change the competitive dynamic.
Now, it turns out, Samsung appears to be in free fall.
And it’s collapsing all on its own, without needing any
help from Apple’s legal eagles.
Samsung has warned that its third quarter earnings were
going to be even worse than previously expected. In a
press release , Samsung said revenues would fall by
20.5% and profits would drop 59.8%.
The projected profit of $3.8 billion is below analysts’
consensus estimate of $5.2 billion, according to
Thomson Reuters . And, Reuters notes, it appears
Samsung is headed for its first annual earnings drop
since 2011.
Samsung is getting pummeled in China by lower-cost
smartphone rivals. In a statement emailed to reporters,
Samsung said: “The company is preparing new
smartphone lineups featuring new materials and
innovative designs.”
Perhaps. But in the meantime, Apple has got its mojo
working. Apple’s stock is trading near its all-time high.
It just said it sold a record 10 million new units of the
iPhone 6 and iPhone 6 Plus on the opening weekend.
And it recently said it had received 4.85 million pre-
orders for the new iPhones in China.
And while the Apple Watch won’t go on sale until some
time next year, it’s made everyone forget about
Samsung’s wearables for the moment.
Of course, Apple has it’s own challenges. The iPad
seems to have stalled a bit in terms of sales. And the
iCloud celebgate ordeal hasn’t buffed Apple’s reputation
for services, which wasn’t all that hot to start. (Cough,
Apple Maps , cough).
But against the context of Samsung’s decline, many of
Apple’s issues seem less than catastrophic.
The questions about Apple’s future revolve around how
fast it will grow. That would be the kind of problem
Samsung would love to have right now.