When did public perception of Apple (AAPL) start morphing from "Greatest Company on Earth" to "Brand Past Its Prime?" At about the time that Samsung (SSNLF), founded in 1938, started looking like a hot young company.
Whatever the perceptions, the two are now locked in a race to the top of mobile technology sales for the all-important holiday season. A report just out from IDC says that Samsung and Apple are leading the competition for mobile technology so far in the holiday season. Samsung is first in market share, at 21.8%, but Apple is tops in value, at $34.1 billion in the third quarter. Both numbers are based on shipments, not sales.
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Reuters dates the beginning of the change in perceptions of both companies to three months ago. Its report says that Samsung has begun to shed its reputation as a mere "fast follower" to become a serious innovator in consumer technology. Meanwhile, Apple "has failed to deliver on a truly seminal product in years — the oft-rumored Apple TV remains a well-honed rumor." In both cases, the report makes clear, it's all about analyst perception, but that's what counts.
This being the technology industry, the reversal of players in defensive and offensive roles took only three months, Reuters figures. In that period, Apple stock dropped about $105 billion, or 18%. Samsung Electronics (005930) doesn't trade on US exchanges, but in South Korea, it's up about 15% in the same period.
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For US investors, Google (GOOG) is the surrogate for Samsung, as the source of the Android software that runs Samsung's flagship mobile products. Google's Android software now runs 75% of the world's mobile devices, with Samsung devices in the star role.
Nevertheless, Google stock has been treading water at best lately, with its stock price currently at about $684, around where it was three months ago, but down about $90 from its peak in late September. This despite some impressive fundamentals, including a projection for 27% growth in profits for fiscal 2013 from the current year.
Android is not, of course, the only iron Google has in the fire. Its latest effort at social networking, Google+, was widely derided by analysts. But it has now reached 500 million enrollments, making it "the fastest growing network thingy ever," according to the company's blog. Sure, that's still half Facebook's number, but it's only been 18 months since Google+ was introduced. And social networking is more business-critical to Google, which needs people signed on across all of its sites all of the time, for more effective delivery of advertising.
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Of course, Apple could lob one new product on the market and instantaneously turn that perception around, as it did before, with the iPod in 2001. But for now, Apple is even getting some bad press, for the first time in more than a decade.
The latest evidence comes from Australia, where police issued a warning last week that drivers using the Apple Maps app on iOS6 devices to get to the city of Mildura were ending up 45 miles away in a remote scorched-earth corner of the outback. Apple has corrected the error.
And then there's the problem some Apple users have had getting Wi-Fi on an iOS6 device. Some users swear that stashing the device in the freezer for 10 or 20 minutes sometimes fixes the problem. No kidding — this tip is from ZDNet.
Just to make it a better story, Apple and Samsung are mortal enemies in a patent battle that continues to test the patience even of the federal judge overseeing it. "I've said this all along," said Judge Lucy Koh said last week. "I think it is time for global peace." The war is over patent rights related to smartphone and tablet design. Unusual weirdness applies here: Samsung supplies some parts for the Apple iPhone.
In the US, the Samsung brand has been well known only for about a decade, and only as an electronics company. At home in South Korea, it's a monolithic force with 79 subsidiaries spread across industries from construction to insurance and oil.