Sunday, November 17, 2013

Does Samsung Really Have an Edge Over Apple in Smartphones?

It wouldn't be a stretch to say that Apple (NASDAQ: AAPL  )  and Korean tech giant Samsung  (NASDAQOTH: SSNLF  ) don't exactly have the warmest of relationships.

Even as Apple still relies on Samsung to make some of the components for its smartphones and tablets, the two companies are also battling it out in the courtrooms of virtually every major economy around the world.

For some time now, Samsung has held the crown as the world's largest smartphone maker. Samsung shipped over 300 million smartphones last year, versus 150 million for Apple in its recently completed fiscal year for 2013.

However, many of Samsung's smartphone sales come from the cheap Android-based devices that are exploding in popularity in emerging markets today. As it turns out, only a fraction of Samsung's total smartphone sales actually come from the same high-end, high-margin devices that Apple actually competes with.

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Investors should note this important distinction. In this video, Fool contributor Andrew Tonner compares and contrasts the difference between Apple's and Samsung's strategies, and discusses why Samsung's smartphone lead might not be as valuable as you might think.

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