Samsung vs Apple in Emerging Markets

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The (infamous) battle between the two leading mobile phone manufacturers (Apple and Samsung) continues to intensify in every aspect imaginable. Gartner reports that in the last quarter of 2012, Both Samsung and Apple raised their worldwide smartphone market share to 52% from 46.4% in the third quarter of 2012. But Samsung ended the year in the No. 1 position, in both worldwide smartphone sales and overall mobile phone sales.

Meanwhile, from a mobile operating systems perspective, itโ€™s official — Android and Appleโ€™s iOS are now the two market leaders. According to IDC, they both now control more than 90% the mobile OS.

The following chart explains it better.

smartphone
Source: IDC

However, as the mobile phone ecosystem continues its worldwide exponential growth, I was particularly interested to explore how the two giants (Samsung vs Apple) stack up against one another in emerging markets.

It maybe said that, in terms of mobile innovation, the maturity threshold is fast approaching. Most consumers now days base their purchasing decision primarily on either sophistication or added value offerings — such as free cloud storage, or free access to third party services. However, in emerging markets, factors affecting consumer-purchasing decisions are very different in comparison to mature markets. In Emerging markets, Pricing is the name of the game.

In all probability, the number one reason that has driven a rapid adoption and growth of Android in emerging markets is its ability to run on lower end, low cost smartphones. Samsung has profited immensely from this, given that Nokiaโ€™s market share has been on a downward trajectory. Last year alone, Samsung released a total of 37 different phones, most of them being low and middle tier phones. Apple released just one. But Appleโ€™s strategy for producing high-end smartphones works well for them. They sold 125 million iPhones last year, with many more sales expected this year in mature markets.

The one market they can no longer afford to ignore, however, is the emerging markets. According to IDC, the rate of growth in emerging markets is twice as that of mature markets. Thus, for the next 5 years, most growth is expected to come from emerging markets. Its been highly publicized in the media that Apple is working on a cheaper iphone model, to possibly seize a chunk of this market. But whether the idea of a cheaper iphone materializes, it remains a mystery (for now at least). Nonetheless, Samsung is expected to unleash many more cheaper phones on the market, which will in turn probably put it in the driving seat as the number one manufacturer in emerging markets.

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