Apple and Samsung lead in Smartphone sales, adding weight to the fact that the two companies are at odds in litigation over patents and intellectual property.
Apple is accusing Samsung of ‘copycatting’ the design and aspects of the technology for the iPhone to and used them in their mobile devices as well as their tablets. Samsung has accused Apple of infringing on its patented 3G network technology, according to the Washington Post.
The trials began in late July and are believed to continue through August. The trial will resume on August 10 at the next court date.
The allegations over intellectual property contrast with the lucrative commercial ties that bind the two companies, according to the Washington Post.
Apple’s reliance on Samsung chips for its best-selling phones and tablets will be worth as much as $7.5 billion to Samsung this year, a 60 percent jump from 2011, Gartner Inc. estimates.
The Washington Post stated that because Apple would struggle to find an alternate supplier for the main processor in its mobile devices, the computer maker can’t quit buying from its competitor anytime soon, whatever the trial’s outcome.
CNET reported that collectively, the two companies watched their U.S. sales increase by 43 percent from the second quarter of 2011 to the same quarter of 2012, says a new report from NPD Group. Over the same time, combined sales for other companies, such as HTC, Motorola, and LG, fell by 16 percent.
For the quarter, Apple had 31 percent of the smartphone market, while Samsung acquired 24 percent. That left HTC with 15 percent, Motorola with 12 percent and LG with just 6 percent, according to CNET.
“By concentrating on their best, flagship devices, while at the same time supplementing their volumes with lower priced alternatives, both Apple and Samsung are extending their lead over the other smartphone makers,” NPD analyst Stephen Baker said in a statement. “To be a share leader means participating in all segments of the market, in order to take advantage of pre-paid and other growth opportunities, while also providing the hero devices that drive customers to your brand.
Pre-paid phones have made the largest impact on sales overall.
Last quarter, 33 percent of people with household incomes less than $35,000 picked up a smartphone, up from 24 percent in the second quarter of 2011. CNET reported that 71 percent of those with the same household incomes were pre-paid smartphone buyers, a 12 percentage point gain over last year.
“Pre-paid smartphones are no longer just cheap, also-ran options, focused on older and less capable phones,” Baker said. “As the smartphone market matures, and as growth slows, carriers have been smart to aggressively market some of their best current smartphones on a pre-paid basis to a new set of customers, in order to keep sales humming along.”
Besides being able to act as financial allies, Apple may want to end on good terms with Samsung to deflect consequences of some of its issues right now. Apple has already declared Google an enemy and may need a company to lean on in the future is something goes wrong with its iCloud, for example.
Steve Wozniak, Apple co-founder, told an audience in Washington DC: “I really worry about everything going into the cloud. I think it’s going to be horrendous. I think there are going to be a lot of horrible problems in the next five years.” This was a response to the recent hacking of a journalists’ iCloud account, according to the Telegraph.
“As much as these companies go head to head, there’s a definite intertwining there that makes it a real ugly divorce if it were to take place,” Len Jelinek, an analyst at market researcher IHS Inc told the Washington Post. “Apple cannot, under any circumstances, be caught in a capacity-crunch situation.”