Who Benefits From the Apple-Samsung Smartphone War?
The battle is very simple for Apple and Samsung; they are struggling to claim the throne as industry leader. Samsung has taken the world market, but has been unable to roust Apple from markets like the U.S., where it remains the leader in market share.
However, it’s a very complicated game for device manufacturers. With tactics ranging from well-timed product releases and competitive pricing to patent infringement lawsuits, there is no simple way for one company to beat the other. And that may not be a bad thing for those who are only marginally involved, or maybe even those slightly closer.
The benefits to consumers are almost unquestionable and run deep in the definition of capitalism. Competition breeds innovation and fair prices. Having Samsung and Apple at each other’s throats means consumers can get the best products for the lowest possible prices. So, consumers — waiting at one end of the manufacturing process — have a clear benefit from the competition, but those on the other end of manufacturing could be benefiting as well…
Companies like Qualcomm (NASDAQ:QCOM) and Broadcom (NASDAQ:BRCM) supply that chips that power some of the hottest and strongest smartphones on the market. Their success is strongly tied to the success of the phone manufacturers, but they don’t choose sides in the arms race going on within the smartphone war.
Qualcomm benefits when Apple makes new smartphones — which it has to do to keep up with competitors — because Qualcomm supplies high-end chips for Apple. But when Samsung retaliates against Apple with another new phone, Qualcomm can benefit again, as it also supplies chips to Samsung, and even to Nokia (NYSE:NOK).
According to Broadcom president and Chief Executive Officer Scott McGregor, “Broadcom is in almost every cool new smartphone that’s coming out,” because the company provides “things like touch and near field communications, and all kinds of other new technologies.” Broadcom is also a double-dealer between Apple and Samsung, and orders from the two companies account for some 17 percent of Broadcom’s sales.
As long as the chip companies can continue making the highest-end components and remain vital for the smartphone makers to stay on top, they can continue benefiting from the seemingly endless struggle between Apple, Samsung, and the like.