Samsung and apple which one is better

Samsung vs. Apple: Comparing Business Models (AAPL, SSNLF)

Samsung vs. Apple’s Business Model: An Overview

It is fair to say there is no love lost between Apple, Inc. (NASDAQ: AAPL) and Samsung Electronics Co. Ltd. (NASDAQ: SSNLF). They are in a worldwide corporate battle that started in 2010 when Samsung, then an Apple supplier, released a very iPhone-like product through its Galaxy lineup. Steve Jobs, Apple’s late CEO, was furious and went on the offensive; Samsung, in turn, dug in its heels.

It made sense that Samsung would try to incorporate elements of the Apple business model, especially after the American technology giant passed Exxon Mobil Corporation as the world’s most valuable company in 2011. Ask either company, however, and you are likely to hear there is too much emulation going on.

Consider the almost unprecedented legal wars taking place between Samsung and Apple, which span four continents and billions of dollars in awarded damages. Or the aggressive, political election-style marketing campaigns that are reminiscent of the Ford versus Chevy attack ads.

From a business model perspective, the two companies are constantly converging and modifying, although stark contrasts remain. Samsung has been a global force longer and has its hands in more industries. Apple’s rise has been comparatively meteoric and focused.

In March 2014, someone leaked a Samsung strategy document from 2012 in which the Korean-based tech company blankly stated, «Beating Apple is #1 Priority (everything must be in the context of beating Apple).» It is a telling example of the animosity between two of the world’s largest smartphone producers, who are clearly modifying their respective business strategies with each other in mind.

Key Takeaways

• Samsung and Apple are two consumer electronics giants with global reach and loyal customer bases.
• Samsung’s business model has focused on vertically integrating supply chains and ramping up production volume.
• Apple has made a business strategy of focusing on design and user experience while outsourcing elements such as manufacturing.
• The two companies have found themselves engaged in legal battles over intellectual property and patent fights.

Samsung: Vertical Integration and Product Volume

Samsung operates like many other Asian producers, such as NEC Corporation or Sony Corporation, with an emphasis on vertical integration and a flood of products. Samsung is present in dozens of markets, including flat panels, sensors, LED lights, batteries, gaming systems, cameras, TVs, appliances, cellphone carriers, tablets, smartphones, and even medical electronics.

Before turning its sights to Apple, Samsung competed with, and in many cases bested, Japanese technology companies in the 1980s and 1990s. The company spends a fortune on research and development (R&D) and capital expenditures (CapEx). This pays off in the mid- and low-end markets, but the high-end products keep running into the juggernaut that is Apple.

Samsung relies on vertical integration as a chief competitive advantage. While Apple still imports billions of dollars’ worth of components from its rival every year, Samsung is beholden to nobody. It is not a magical formula, Nokia was almost as integrated before being steamrolled by Apple and Samsung, but Samsung controls some logistical certainty in a way that Apple does not.

Declining profit margins in 2014 and 2015, however, forced some introspective analysis within Samsung’s executive team. Chair Lee Kun-hee saw his company’s global share of smartphone sales drop from 35% in 2013 to 24% by early 2015, and his son, Lee Jae-Yong, reportedly wants to respond through mergers and acquisitions (M&As) and partnerships. This would be a historic shift in focus, likely signaling a departure from self-funded R&D and into outsourced innovation, not unlike Apple.

Apple: Design, Integration, and Outsourcing

From its target marketing, research, and product design, Apple is a much more focused company than Samsung. It is also a much more profitable company. Apple succeeds in design and integration, and no small degree of risk.

All of Apple’s products include programs that work very well with each other, but not with any of its competitors’ products, which makes it easy for customers to keep buying Apple and difficult to switch to someone else. Nearly three-quarters of Apple’s revenue comes from the iPhone lineup, making the firm single product-dependent.

Able to suppress R&D costs by outsourcing hardware component production and assembly, Apple’s CapEx looks radically different from Samsung’s. This inflates margins and boosts AAPL stock, and is one of the chief reasons Apple can grow at astounding clips.

Apple does not race to be first; it lets other companies spend time on R&D and early market development before swooping in and improving everything. Consider the iPod, the first breakthrough product during Jobs’ second stint as CEO, which came out years after the Sony Walkman. Not content to just throw out an imitator product, Apple worked diligently with record labels and created a small, sleek-looking replacement. There are similar stories with the smartphone and tablet markets, each considered pillars of Apple innovation but neither of which the company invented.

Apple vs. Samsung: Endless Patent Lawsuits

The most acerbic interactions between Samsung and Apple take place in intellectual property rights court, where Apple has repeatedly reached into its bag of litigation tricks to assail Samsung for patent infringement. Lawsuits are a common strategy from Apple, which is one of the most legally aggressive firms in the world, but the focus on Samsung is particularly repetitive and intense.

The first salvo was fired in 2011 when Apple, already entangled with Motorola at the time, went after Samsung for its design of tablets and smartphones. The first claim came in April, and by August 2011, there were 19 ongoing Apple versus Samsung cases in nine separate countries. The count reached more than four dozen by mid-2012, with each company claiming billions of dollars in damages. Each firm won multiple decisions against the other between 2012 and 2015, often in conflicting rulings from German, Japanese, South Korean, American, French, Italian, Dutch, British, and Australian courts.

Amusingly, the rapid nature of technological advancement often leaves the comparatively dinosaur-like legal system in the dust. For example, Apple won an initial ruling in 2012 that targeted more than a dozen Samsung phones, but the appeals and countersuit process dragged out until 2014 when virtually every single target model was out of production. For this reason, the real damage is not on the production line, but rather in the mountain of legal costs incurred by Samsung and Apple around the world.

There are still some production or distribution victories. In August 2011, for instance, a court in Germany issued an EU-wide injunction on the Samsung Galaxy Tab 10.1 device for violation of an Apple interface patent. Samsung fought back and had the injunction reduced to only German markets, but it was still a victory for Apple. A similar injunction was successful in Australia.

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Apple vs. Samsung: Who makes the better phone?

It’s clear who’s selling the most phones, but who’s making the best phones? From performance and design to ecosystem and security, we dare to compare the two companies and their products. The numbers don’t lie.

Jason Perlow, Senior Technology Editor at ZDNet, is a technologist with over two decades of experience integrating large heterogeneous multi-vendor computing environments in Fortune 500 companies. His expressed views do not necessarily represent those of his employer, The Linux Foundation.

Gartner’s recently published report revealed that Apple is now the worldwide leader in smartphone shipments, passing Samsung for the first time in five years.

Admittedly, this has been a weird 12 months, and I am not sure if the pandemic has done some strange things regarding upgrade cycles and purchasing decisions. In Q4 2019, Apple shipped 69.5 million versus Samsung’s 70.4 million in total smartphone units. But fast forward a year, to Q4 2020, Apple did 79.9 million vs. Samsung’s 62.1 million. Now, that’s a big gain for Apple and a massive drop for Samsung, but understand that on a global basis, smartphone sales fell by 12.5% total if we include all the other smartphone manufacturers in the mix.

Worldwide Unit Shipments of Smartphones (1000s) in Q4 2020

I am not entirely sure what is accounting for Apple’s significant gain here. Still, the iPhone 12 was a massive win for the company as its first 5G device, and its price point was lower than for the previous model on the entry-level when it was first introduced. We also have to account for other models — the iPhone SE, the iPhone XR, and the iPhone 11 — that continued to sell well at reduced price points following the iPhone 12 launch. In contrast, Samsung did not make comparative price adjustments to its line later in the year and did not have 5G across its line until recently.

OK, so it’s clear who’s selling the most phones, but who’s making the best phones?

Every time someone here at ZDNet — or an industry media site — writes something positive or negative about either of the two leading smartphone vendors, the usual fan debates erupt in the forums and comment sections. Of course, what is «better» can be a highly personalized consideration; what’s better for me is not necessarily better for you, depending on the use case and a lot of other stuff. But what we can do is measure by key performance indicators or KPIs.

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Samsung offers a range of smartphones — with the A-series, S-series, Note line, and new foldables.

So, which company makes a better phone?

What I have done, along with my Jason Squared colleague Jason Cipriani and several other ZDNet writers, is try to boil this comparison down to 10 KPIs and score the two companies based on how they perform on those performance indicators along a 10-point scale.

A perfect score would be 10 points for each indicator, with a total score of 100 (which none received). For additional context, we also scored Google.

User Experience

Apple: 7 | Samsung: 7 (Tie)

We could argue about this all day long because it is a highly subjective topic. Both Cipriani and I prefer iOS. Objectively, however, Samsung has made significant improvements with One UI 3.0. However, if we track the development of both mobile operating systems over the last several years, it feels a lot like Android and iOS are becoming very similar platforms from a user experience perspective.

For that reason, we ranked them dead-even in terms of UX: 7 — because, while they are both excellent user experiences, I think they also could use some considerable improvement in several areas; they are both getting long in the tooth. iOS is a good user experience, but many areas need redesign or optimization. Samsung does an excellent job with taking raw Android and improving it with their value-added stuff. As it is implemented on the Pixel with Google’s platform enhancements, pure Android gets a 6.

Industrial Design and Product Durability

Apple: 9 | Samsung: 9 (Tie)

Yes, design is yet again a personal preference. Jason Cipriani doesn’t care for how big Samsung is going with the S21/Note20 line. If you want a smaller phone in Samsung’s lineup, the company removed some features from the larger devices. On the other hand, Apple launched four different iPhone 12 models, all of which have the same basic features, except the larger sensor on the 12 Pro and IBIS-stabilized main camera sensor on the iPhone 12 Pro Max.

Nevertheless, both Apple and Samsung have some of the best product designs in the entire industry, so they both get very high marks — both are ranked a 9 in this area. Historically, I would say both of these companies scored relatively low in terms of product durability — that’s why I have housed these things in OtterBoxes for so long. But, in recent years, Apple and Samsung have upgraded their phones to IP67 and IP68 ratings to make them waterproof and much-improved glass tensile strength, so I would say their products are much more durable. However, I’m still using cases until someone proves to me they are indestructible.

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Product Performance

Apple: 9 | Samsung: 8

There is no denying it: Apple’s A14 Bionic is way ahead of Samsung on overall chip performance and on benchmarks performed at the end of last year using the Qualcomm 865+ on the S20. It trounced it in every conceivable area that was quantifiable.

However, right now, for S21 devices in the North American market, Samsung uses Qualcomm Snapdragon 888 SoCs that are faster in some raw benchmark areas than the A14, such as memory bandwidth. It also integrates 5G on the die. In contrast, the A14 Bionic is paired with an older X55 modem chip made by Qualcomm and has to go through interconnects for its data communications pipeline. Apple is a year behind Samsung in 5G systems integration; there’s no getting around that.

In terms of CPU core performance, the Snapdragon 888 is an octa-core (8), whereas the A14 Bionic is a Hexa-core (6). They both have cores that clock out at similar speeds, at a max of about 3 GHz. The A14 Bionic has more Tier 3 cache, 8MB vs. the Snapdragon’s 4MB. But we have to remember that the A14 Bionic also has 16 specialized machine learning cores for doing advanced computational photography and computer vision, and it also sports four powerful graphics cores.

Apple highly optimizes its chips for its platform. Apple doesn’t go on the open market and source the designs from other semiconductor vendors like Samsung is doing.

Where Samsung takes the lead right now is in displays because this is where they have chosen to put a lot of its R&D efforts, and it maintains the world’s second-largest display manufacturing business. The company’s flagship phones sport 120Hz AMOLEDs with adaptive refresh, a technology that is not yet present on iPhone models. However, high-frequency adaptive refresh screens do consume a lot more power, which is why the S21 sports a much higher capacity battery — 4000mAh vs. the iPhone 12’s 2800mAh. (That could explain why Cupertino has not yet chosen to source these components from Samsung or LG for its own products.) The company also manufactures folding displays, which are used on its most expensive Galaxy Z line of devices.

So, while Samsung’s smartphones might have higher performance on paper in some areas, Apple’s current iPhones’ real-world performance with the mix of applications consumers and businesses use on a day-to-day basis often perform faster than Samsung’s current generation phones. And that is because Android is just plain more resource-intensive than iOS is. For that reason, Apple gets a 9, and Samsung gets an 8.

Supply Chain Integration

Apple: 8 | Samsung: 10

While Apple gets very high marks for supply chain management and sourcing components, not to mention that it is a chip designer itself, it’s no match for Samsung because it even has to rely on Samsung to provide parts for its products, which includes things such as OLED displays, NAND flash, and DRAM. Additionally, while Samsung uses the Qualcomm Snapdragon in its phones, it fabs those chips for Qualcomm, including the latest 888. Samsung also has SoCs of its design, the Exynos, which it uses in phones it sells in the global marketplace. So, yes, Apple is extremely competent in this area; it scores an 8, while Samsung scores a 10.

Native Services and App Ecosystem

Apple: 9 | Samsung: 6

Apple blows Samsung out of the water in terms of the native ecosystem. For virtually everything in apps and services, Samsung has to rely on Google. So, while Google gets an 8 for its ecosystem in terms of the breadth and quality of its service offerings on Android, Apple Scores a 9 because I think its wearables services are vastly superior to what Google has now. I believe its Music ecosystem and games and financial offerings are also better. I think you can also argue that Google’s apps and services as implemented on iOS are as good or work better than the Android version in some cases. Samsung is getting a 6, and even with that, I think we are generous.

Apple vs Samsung: Product Integration

Apple: 9 | Samsung: 7

Part of Apple’s magic is how easily all of its products work together without the user having to do much, if anything, to make it work. Samsung has a line of products from fridges to dryers to phones and smartwatches. But there always seems to be one thing or another that doesn’t work right. Again, I think this goes back to relying on Google for Android and Chrome OS and Microsoft for Windows. They don’t control the total experience.

Samsung tends to take its cues from Apple when it comes to how well integrated its products should be with each other. But Apple’s stuff just plain works, if we are talking about AirPods, Watch, HomePod, AppleTV, iPhone, iPad, and Mac all as one cohesive product ecosystem. I would say that Samsung’s wearables story with Gear is currently better than Google is with WearOS, let alone Fitbit.

However, I am still ranking Samsung lower than Apple; it gets a 7, and Apple gets a 9. Despite Google’s lackluster wearable ecosystem, it makes up for things in other areas such as Chromecast and Home/Nest, so I am giving it an 8.

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Developer Ecosystem

Apple: 9 | Samsung: 3

Samsung doesn’t have its own ecosystem unless we talk about integrations with its specific services and its Tizen OS used on Gear smartwatches and Smart TVs. For everything else, it depends on Google because it owns the Android OS, so in this metric, Samsung is scoring very low with a 3. Between the two communities, the commercial activity is heavily prioritized toward iOS. Cupertino is also much more in touch with its developer base than Google, so Apple is scoring a 9 while Google scores a 7.

End-User Support Infrastructure

Apple: 9 | Samsung: 7

I don’t think you can fairly compare Apple and Samsung’s support, let alone Apple’s support with every other Android device manufacturer on the market, or even for Google’s flagship Pixel. Apple has its retail stores just about everywhere. In cases where you don’t, its phone support is sensational, follow-through is excellent, and it will make sure your device is repaired by an authorized service center even if you cannot get it repaired at an Apple store. In terms of OS support, Apple keeps the device current with iOS upgrades for five years. Google has only recently got its vendors, including Samsung, to commit to a three-year support plan as of August of last year. Samsung has recently upped the ante by including the fourth year of security and bug fixes, but there’s no comparison. Apple scores a 9, and Samsung scores a 7.

Platform Openness and Transparency

Apple: 2 | Samsung: 6

It’s night and day when you compare Apple and Samsung. One is entirely proprietary (iOS), and the other is based on an open-source core (Android). While I might quibble as to the openness and transparency of Google’s APIs on the various services it has, and that you cannot install Google Play Services on any Android device that doesn’t have it without jumping through all kinds of workarounds (like on Amazon Fire and Huawei), it is still a far more open platform than what Apple provides. By virtue of using Android, Samsung gets a 6, Google gets an 8, and Apple gets a 2.

Platform Privacy and Security

Apple: 9 | Samsung: 7

As easy as it was to declare Samsung the winner in platform openness, this is just as easy to put Apple in the lead in privacy and security. Yes, Samsung has Knox, and that’s great. But Apple’s track record and the lack of keeping hardly any personal logs or information on users bodes well for its privacy efforts. Google, on the other hand, wants as much data about us that it can collect.

At its core, Google is a data and advertising company. The Android ecosystem is chock full of malware and exploits and bad actors on the Play Store. It’s become comical of what the Toxic Hellstew has become with all the different OS variants and vendor implementations over the years. I think Google has done a better job with privacy controls and security hardening on Android 11, so it gets a 6. Because Samsung is inheriting Google’s work and implementing its KNOX and bootloader protections and other specific security hardening for its devices, it is also getting a 7. Given Cupertino’s increased focus on privacy requiring developers to ask for tracking permission with iOS 14.5, Apple scores a 9.

Scorings

Apple: 80 | Samsung: 70

So, on overall scores, Apple leads with an 80, Samsung trails in second with a 70, Google follows with a 68.

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