Tomahawk, WI 01/09/2014 (BasicsMedia) – Apple Inc (NASDAQ:AAPL) and Samsung Electronics Ltd. are engaged in a fierce fight for market share in the competitive smartphone business. The smartphone business shows some characteristics of an oligopoly market with two dominant players and several fringe ones. But the comparison ends there. The other characteristics like price cartel are not present in this scenario.

The Apple and Samsung Fight:

Apple Inc (NASDAQ:AAPL) and Samsung Electronics may be in the same smartphone business, but there is a difference in their business models. Apple caters to the high end market only while Samsung is present from the high end to the low end.  Apple’s offering in the slightly low end did not generate much buzz.  The third and important competitor, Blackberry Ltd. (NASDAQ:BBRY) is facing issues of its own and is so busy fighting its own demons that the fight is almost two cornered.

Coming to some figures, according to data available for the September till November 2013 period, Apple had a 41% market share of the crucial U.S. market with the rival Samsung getting 26%.  Other handset manufacturers had to fight it out for the balance 33% market share. However, with a growth rate of 1.7% over the August quarter, Samsung was able to beat Apple’s growth rate of 0.5%.

These figures miss out the very crucial holiday season sales as December sees a peak in smartphone and tablets sales. Apple has also down very well in the U.S. market as it enjoys a strong brand pull here. The correct picture will emerge only when figure are available for the complete 2013 fiscal as well as for all countries put together. We are also talking about numbers here, if we substitute numbers with value, Apple will zoom quite ahead, as Apple Inc (NASDAQ:AAPL) sells only high end handsets against Samsung’s offering across all price fronts.

The Other Fight:

With such a fierce and close fight, it is expected that it will spill over in other areas also. Both the companies are engaged in several patent wars. Both of them have filed counter cases against each other. This is expected in the high technology sector. But the cost of such litigation raises many eyebrows. Apple Inc (NASDAQ:AAPL) is stated to have paid almost $60 million to its leading outside law firm to fight Samsung.  Against this, Apple has also been awarded damages in tow cases filed in California totaling almost $930 million. Apart from the direct costs, there are several indirect costs also involved as we have to factor in the employees who spend valuable time preparing for such prolonged legal battles.

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