April 2014 seems to be a watershed month in the ongoing struggle between Apple and Samsung for smartphone and tablet supremacy. In their latest respective financials, Apple posted larger than expected iPhone sales and profits, while Samsung posted their lowest sales and profits in five consecutive quarters.
In other words, Apple’s money machine is cranking along just fine, despite the cries of gloom and doom from the Cult of Apple Critics. Meanwhile, Samsung finds itself between a rock and a hard spot where there’s no easy way out.
Apple is squeezing Samsung from the top while Chinese manufacturers are eating Samsung’s profits from the bottom.
April was when we learned Samsung lied about how many tablets it sold in recent years. We also learned that Apple’s iPhone 5c, instead of being the failure that members of the Cult of Apple Critics said it was, was the second most popular smartphone on the planet; behind the beloved iPhone 5s, and ahead of Samsung’s flagship Galaxy S4.
Samsung’s latest financials show the company’s mobile business accounts for 76-percent of total operating income. Despite selling everything from smartphones and tablets to copiers to televisions to cameras to refrigerators to chips and screens to washers and dryers, Samsung has evolved into a diversified company with little diversification in profits.
How does that compare to Apple?
Investors have begun to realize that Apple is a money making machine, capable of buying back tens of billions of dollars in AAPL stock, while giving investors more tens of billions of dollars in dividends, and still having more money in the bank than most nations.
Apple’s walled garden approach to technology gadgetry generates massive profits at every turn. Mac, iPhone, iPad, iTunes, Apple TV, Apps, Retail Stores. And now, for the patient investor, a rapidly growing stock price.
How does Apple’s fortune compare to the competition? There’s not much to compare. Samsung is the only other profitable smartphone and tablet maker, and earnings continue to disappoint. Google’s Android has lost billions. Ditto for Microsoft, Motorola, Nokia, HTC, while Amazon ekes out a meager profit on half the revenue of Apple, the iPhone maker garners the same amount of profit in a day that Amazon makes in a quarter.
Yes, this battle raging between Apple and the rest of the technology world isn’t really a fair fight. The rest of the world is losing.