The Daily Item, Sunbury, PA


August 12, 2013

Samsung losses to Apple give iphone maker negotiation edge


By Jungah Lee and Dina Bass — At stake is an increased share of a smartphone market that rose 34 percent to $293.9 billion last year, according to data compiled by Bloomberg. At the same time, the average price of a smartphone has plunged to $375 from $450 since the beginning of 2012, IDC estimates.

Samsung rose 0.2 percent Monday in Seoul, paring this year's decline to 19 percent. Apple is down 15 percent this year.

"Investors are turning away from legal issues because it hardly has any impact on their businesses any more," said Marcello Ahn, a Seoul-based analyst at Quad Investment Management. "What they really want to find out is where Samsung and Apple will make cash over the next two years or so."

Cupertino, Calif.-based Apple has claimed that many of the phones running on Google's Android operating system copied unique features of the iPhone, introduced in 2007. Its first suit, in March 2010 against Taiwan's HTC Corp., resulted in a settlement that included a pledge by HTC that it wouldn't make "cloned" copies of Apple products.

In the global marketplace, Android has grown to become the most popular operating system, running 80 percent of the almost 230 million smartphones sold worldwide in the second quarter, compared with Apple's 14 percent, according to an Aug. 1 report by Boston-based researcher Strategy Analytics.

Samsung and Apple both disappointed analysts in their most recent earnings. Samsung missed estimates as market saturation curbed sales growth for its flagship Galaxy S4, and Apple had to rely on sales of its iPhone 4 — including versions that were almost blocked last week — to top estimates.

Finding new, exciting things to add to the phones is getting harder, said Will Stofega, program director at researcher IDC in Framingham, Mass.

"The designs and capabilities of some of these premium devices — you're really scratching your head to find something new," Stofega said.

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