Technology advances faster than most people are expecting. And as people are becoming more curious and the needs for mobility increases, the market grows.
To reach the most out of the many, tech companies are racing each other to give the best out of their available resources, and create something that benefits. An Asian manufacturer, Samsung Electronics Co., Ltd. has used Google's Android mobile operating system to create smartphones and tablets that closely resemble Apple Inc.'s iPhone and iPad.
With its resources and massive marketing capability, Samsung starts to gain market share, hurting Apple's margin and stock price. Samsung, with its flagship devices and wider range of products, is threatening one of undisputed tech company that once reign the throne with quality and massive community.
The late Steve Jobs had answer to all this with his legal war that could keep Apple's clones off the market. But nearly two years after Apple first filed a patent-infringement lawsuit against Samsung, and six months after it won a huge legal victory over its South Korean rival, Apple's chances of blocking the sale of Samsung products are growing dimmer by the day, especially when Apple is unable to show that its sales have been seriously damaged when rivals, notably Samsung, imitated its products.
The war between the two giant companies may phase to a new complex relationship inside the growing mobile computing business.
Tim Cook, Jobs' successor as Apple's CEO, was opposed to suing Samsung in the first place, according to people with knowledge of the matter, largely because of that company's critical role as a supplier of components for the iPhone and the iPad. Apple bought some $8 billion worth of parts from Samsung last year, analysts estimate.
Samsung, meanwhile, has benefited immensely from the market insight it gained from the Apple relationship, and from producing smartphones and tablets that closely resemble Apple's.
While the two companies compete fiercely in the high-end smartphone business - where together they control half the worldwide sales - their strengths and weaknesses are in many ways complementary. Apple's Chief of Operations told that Samsung was an important partner and they had a strong relationship on the supply side, but declined to elaborate.
From Partner to Competitor
The partnership between Apple and Samsung was made since the year 2005, when the California-based company was looking for a stable supplier of flash memory.
The memory market back in that year was not at all stable. Since the market was not predictable, Apple wanted to partner with a supplier that was financially solid. Apple chose Samsung, a Korean company that held about 50 percent of the NAND flash memory market at that time. Steve Jobs has stated that whoever controls flash is going to control the space in consumer electronics.
The deal between the two companies led to Samsung supplying the crucial application processors for the iPhone and iPad. Initially, the two companies jointly developed the processors based on a design from ARM Holdings Plc, but Apple gradually took full control over development of the chip. Now Samsung merely builds the components at a Texas factory.
After singing the deal, the two companies built a close relationship when Jay Y. Lee, who is the grandson of the Samsung Group founder, visited Steve Jobs in Palo Alto, California.
The partnership gave Apple and Samsung insight into how the companies perform their strategies and operations. In particular, Samsung's position as the sole supplier of iPhone processors gave the Korean company valuable data on how big Apple's market was going to be, and how its efforts to be "different" through components that are shipped with its devices. The insight has given Samsung enough information about how many consumers are in need for high-end devices.
Samsung spent $21 billion (23 trillion won) on capital expenditures in 2012 alone, and plans to spend a similar amount this in 2013.
"The popularity of iPhone is a mere result of excitement caused by Apple fanatics," Samsung's then-president, G.S. Choi, told reporters in January 2010. And to anticipate the growing community of fans, Samsung had plans. Samsung mobile business head, J.K. Shin told his staff in 2010 that Samsung was going to launch the Galaxy S which highlighted Android with the look and feel similar to Apple's iPhone.
Relationship to the Court
Steve Jobs and Tim Cook complained to top Samsung executives when they were visiting Apple's office. Apple expected, incorrectly, that Samsung would modify its design in response to the concerns, people familiar with the situation said. What Apple fears were confirmed with the early 2011 release of the Galaxy Tab, which Jobs and others regarded as a clear copy of the iPad.
Cook, worried about the critical supplier relationship, was opposed to suing Samsung. But Jobs at the time was running out of patience, suspecting that Samsung was counting on the supplier relationship to protect it from retribution.
Apple filed suit in April 2011, and the conflagration soon spread to courts in Europe, Asia and Australia. When Apple won its billion-dollar jury verdict against Samsung in August 2012, it appeared that it might be able to achieve an outright ban on the offending products - which would have dramatically altered the smartphone competition. Apple that agreed to withdraw patent infringement allegations against Samsung's Galaxy S III Mini in exchange for assurances,
Later, Apple has failed to convince U.S. judges to uphold Samsung's sales bans - in large part because Apple's large profitability, large share of the market and the quality that it has does not resemble anything else on the market.
"Samsung may have taken Apple's customer base, but there is no suggestion that Samsung will wipe out Apple's customer base, or force Apple out of the business of making smartphones," U.S. District Judge Lucy Koh wrote. "The present case involves lost sales - not a lost ability to be a viable market participant."
Meanwhile, Samsung that was charged for infringing eight patented technologies in iPad Mini, came under pressure from antitrust regulators and pulled back on its effort to shut down Apple sales in Europe over a related patent dispute.
A court in U.S. recently declined Apple's bid to fast-track its case, meaning its hopes for a sales ban are now postponed for months, in which Samsung may very well release the next version of its popular Galaxy smartphones.
The Mission to Conquer
The battle between the two giants shows a kind of drama that people likes to follow. The hostility between the two appear to have put some problems in their relationship. But Apple is said that it will not be able to eliminate Samsung as its flash supplier since it still remains as a dominant manufacturer for crucial chips that Apple needs.
Both companies are deploying strategies out of the information they gather in all their partnership years to maintain and extent their reach over one each other.
One of the effort that Samsung made was developing an advertisement that mocks Apple customers, and dramatically ramped up spending on marketing and advertising, a cornerstone of Apple's success. U.S. ad spending on the Galaxy alone leaped to nearly $202 million in the first nine months of 2012, from $66.6 million in 2011, according to Kantar Media.
On the other hand, Apple is investing in manufacturing by helping its suppliers obtain the machinery needed to build large-scale plants devoted exclusively to the company. To accomplish its mission, Apple spent about $10 billion in fiscal 2012 on capital expenditures, and it expects to spend a further $10 billion this year, over a 100 percent increase from 2011.
Products and Resources for Approach
Both Apple and Samsung have different strategy to approach the growing market: Apple has only one type of smartphone, the iPhone, and four products lines in total. Apple keep variations to a minimum while focusing on the high-end market with its known sheer quality and design. By contrast, Samsung, beside making chips, TVs and other house appliances, has 37 mobile products that range from cheap to expensive. Samsung Group also sells ships to insurance policies.
Apple that keeps its core staff to only 60,000 worldwide, have its devices hugely popular in the United States. Samsung, although targeting worldwide market, have enjoyed more popularity in developing countries like India and China. Samsung with its wider range of products, employs 369,000 people worldwide that includes in 80 companies.
The different strategy and approach made by the two companies are seen to be a better advancement for profit than having an all-out war between the two for things that yet to come. As their legal war ceases down, it is clear that Apple and Samsung have plenty of common interests as they work to defeat other potential challengers, such as Microsoft and BlackBerry.