RPT-Apple and Samsung: A defining rivalry in a changed mobile market

Sun Dec 9, 2012 5:00pm EST
 

By Jeremy Wagstaff and Miyoung Kim

JAKARTA/SEOUL Dec 7 (Reuters) - What a difference three months can make.

At the end of August, Apple Inc seemed on top of the world. Fresh off a resounding $1.05 billion U.S. legal victory over arch-foe Samsung Electronics Co Ltd, the company was gearing up to launch the fifth iteration of its iconic iPhone. Just a week prior, its market value had surpassed Microsoft Corp's and it became the most valuable technology company in history.

That was then. Since winning a landmark U.S. patent infringement case in August, its stock has dived 18 percent, wiping $108 billion from its value. But the shares of defeated party Samsung have surged, rising 16 percent.

The dramatic reversal has sparked raging market speculation. Some pundits say concerns are growing about the seemingly inexorable advance of Google Inc's Android, the rival software championed by Samsung. Others say fears about higher capital gains taxes have prompted investors made rich by Apple's stock-price growth to sell.

But it is the Apple-Samsung rivalry that defines a global mobile device industry with a growing list of struggling players. Together, the two mobile juggernauts account for more than 1 in 2 smartphones sold globally.

Analysts say Samsung is beginning to shed its aura as a "fast follower" and becoming a serious innovator, while Apple has failed to deliver on a truly seminal product in years - the oft-rumored Apple TV remains a well-honed rumour.

"Apple's actions have started to appear as if innovation is slowing and they're defending turf with a zero-sum market view rather than continuing to innovate as a world-beating leader," said Tony Nash, managing director at IHS, a business information provider.   Continued...