Samsung's smartphones and tablets are pushing it closer to Apple-level profits, and its strategy of faster, cheaper and in more hands, may overtake the iPhone and iPad maker.
The South Korean company raked in record profits topping $5 billion by using shrewd tactics, timing the release of its products before Apple's launch. Samsung, which makes about third of what Apple pulls in, plans to keep up the strategy, by selling its Galaxy S3, equipped with a faster quad-core chip, ahead of Apple's iPhone 5.
"Samsung and Apple are out-competing most major rivals, and the smartphone market is at risk of becoming a two-horse race," explained analyst Neil Mawston, comparing Samsung's 30 percent smartphone market share with Apple's nearly 25 percent hold, which dwarfs other competitors.
In addition, Samsung is making inroads in China, helping Android beat out Apple in the region despite high iPhone and iPad demand. The company's success lies largely from contracts it signed with all the major Chinese telecoms, including China Mobile, to gain a broader reach over Apple in Asia. By getting more phones and tablets into more locations, Samsung hopes to saturate the market in areas Apple has yet to reach.
Samsung is also seeing success by releasing a wider array of devices at various price points, making them more affordable to middle-class Chinese consumers. By exploiting Apple's weakness, offering just one high-end device, Samsung's strategy of selling cheaper devices in more developing areas, is giving it more volume, albeit at lower margins.
But Apple has an advantage in the tablet market. Samsung has yet to produce a serious competitor to the iPad, despite recent success of the hybrid Galaxy Note. Samsung is hoping a 10-inch version of its Galaxy Tab 2 will lure customers away from the iPad, but Apple's dominance lies with its apps, which dependent upon Google's Android platform.
Regardless, Samsung is maneuvering itself into a strong position by dominating 4G patent holdings, a tactic that will pay off as rivals look to manufacture and market next-generation 4G products.
Samsung's patent skirmishes with Apple have mostly focused on 3G technology, but Apple will have a much harder time to win legal battles against Samsung's stacked 4G arsenal, giving Samsung a potentially big payday if its rivals use and license its patented technologies.
Not to be outdone, the company is attacking all sides, as it releases a 7-inch version of the Galaxy Tab 2 to compete against the Kindle and Nook. While the Android tablet offers a more robust interface, allowing more freedom than Amazon and Barnes & Noble's devices, the challenge will be difficult since Kindle and Nook are well-established in the niche e-reader market.
Google, meanwhile, is preparing to launch its own branded tablets running on Android, posing another challenge to Samsung. Google's tablets will be aimed at the iPad, by the similar Android interface may be a bigger challenge to the Galaxy line.
The South Korean company is poised to draw closer to Apple. A combination of faster, cheaper products, along with a strong portfolio of 4G patents, gives Samsung an advantage in the smartphone race. But the company will struggle to stand out in the tablet market. Regardless, Samsung's market domination threatens to box out other Apple competitors as well, as consumers increasingly see two main choices for high-end mobile devices.
Apple CEO Tim Cook said he'd "rather settle a patent lawsuit" than fight legal battles to a bitter finish, but a kinder, gentler Apple won't show up in the courtroom.
The new iPad does not work with some older "smart covers," pointing to another Apple design flaw competitors can potentially exploit.
Smart covers snap onto iPads using magnets, and since the iPad 2 and its newer iteration are physically alike, the covers still fit. Apple's branded Smart Case automatically sends iPads into sleep mode when closed, and illuminates the screen when opened.
However, the covers use magnets inside the tablet to control this on-off function, but they do not work with the new iPad because it is polarity-specific, meaning it matters which way the magnets face. Since older iPads were not like this, the older smart covers may have magnets that face the wrong way, rendering them useless.
The magnets issue is a relatively minor problem, but Apple's failure to account for the snafu undermines the company's image as design perfectionists and gives some customers headaches.
Apple announced strong sales for the new iPad, but some of these customers are likely to own an older version and thus run up against a problem when they try to use the old case. Apple is still on the top of its game and dominates the tablet market, but this sort of issue alienates loyal customers, and Apple's competition is about to heat up this fall with Windows 8 tablets hitting stores and Google-branded Android tablets in the works.
This is not the first design problem discovered in the new iPad, with recent reports of new iPads growing excessively hot sparking concern. The "hot iPad" dilemma, coupled with the annoyance of having to shell out for another new case, may turn some customers away from Apple if the company does not swiftly address these problems.
Ironically, other companies developed third-party smart covers due to their convenience and popularity, and Apple was just awarded a patent for the part of the technology.
Apple's new iPad has top-of-the-line features and will likely continue to set the benchmark for premium tablets regardless of this smart case problem. Apple, however, faces increasingly stiff competition. Small irritations like this nip at the California company's heels as it tries to maintain tablet dominance, because several little problems could provide its rivals with big gains.
The new iPad does not work with some older "smart covers," pointing to another Apple design flaw competitors can potentially exploit.
Smart covers snap onto iPads using magnets, and since the iPad 2 and its newer iteration are physically alike, the covers still fit. Apple's branded Smart Case automatically sends iPads into sleep mode when closed, and illuminates the screen when opened.
However, the covers use magnets inside the tablet to control this on-off function, but they do not work with the new iPad because it is polarity-specific, meaning it matters which way the magnets face. Since older iPads were not like this, the older smart covers may have magnets that face the wrong way, rendering them useless.
The magnets issue is a relatively minor problem, but Apple's failure to account for the snafu undermines the company's image as design perfectionists and gives some customers headaches.
Apple announced strong sales for the new iPad, but some of these customers are likely to own an older version and thus run up against a problem when they try to use the old case. Apple is still on the top of its game and dominates the tablet market, but this sort of issue alienates loyal customers, and Apple's competition is about to heat up this fall with Windows 8 tablets hitting stores and Google-branded Android tablets in the works.
This is not the first design problem discovered in the new iPad, with recent reports of new iPads growing excessively hot sparking concern. The "hot iPad" dilemma, coupled with the annoyance of having to shell out for another new case, may turn some customers away from Apple if the company does not swiftly address these problems.
Ironically, other companies developed third-party smart covers due to their convenience and popularity, and Apple was just awarded a patent for the part of the technology.
Apple's new iPad has top-of-the-line features and will likely continue to set the benchmark for premium tablets regardless of this smart case problem. Apple, however, faces increasingly stiff competition. Small irritations like this nip at the California company's heels as it tries to maintain tablet dominance, because several little problems could provide its rivals with big gains.
Samsung's paying out a bundle of money after the Korean Fair Trade Commission found it guilty of not only price-fixing, but impeding an investigation.
AT&T, though, is making plenty of money, marking record iPad sales over the weekend and announcing it's giving out $250 million in grants to help schools keep their students from dropping out.
Meanwhile, Mike Daisey, who gained attention as the so-called top expert on Foxconn abuses in China, is now saying his translator led him astray.
Korean Officials Fine Samsung For Blocking Investigation
The Korean Fair Trade Commission has fined Samsung the equivalent of $356,000 U.S. dollars for obstructing its price-fixing investigation.
The penalty is in addition to the $12.6 million the country's FTC fined Samsung for price fixing, bringing the total to nearly $13 million. According to Korea Joonang Daily, security guards met the FTC investigators when they arrived at the plant to go through Samsung's offices. In addition, employees were ordered to delete data and replace computers with important information.
Also, an executive said he was away on a business trip to avoid an interview, and by the time FTC officials made their way into the Samsung offices, only one employee remained.
The commission has issued a total of $40 million in fines to Korea's tech companies, accusing them of colluding to raise phone prices.
AT&T Fighting Dropout Rate with $250 Million in Grants
AT&T will spend $250 million to help reverse a U.S. student dropout crisis.
Company officials said the company chose to target school drop-outs in response for calls for more corporate philanthropy. The investment is one of the largest corporate investments ever made in education, and expands on a small program the company started in 2008.
Grant applicants must be able to prove they have a dropout-prevention program with a successful track record. Applications that have efforts connected to science, technology, math or engineering will rank higher for the grants, which will range from $100,000 to $300,000 each.
Discredited Daisey Points Finger at Translator
Actor Mike Daisey, who made a now-discredited name for himself by taking on Apple over its plants in China, is challenging the credibility of a little-known Chinese translator who worked with him.
The woman disputes many of his claims about witnessing inhumane working conditions at iPad and iPhone plants. Daisey has recently acknowledged making up several facts about his visit, leading National Public Radio to pull a top-rated report based on his documentation.
Daisey's one-man show, "The Agony and the Ecstasy of Steve Jobs," helped stir criticism of Apple and Foxcomm. However, rather than taking all the blame, he's now telling audience members he removed material he couldn't stand behind and informs the crowd that his recollections differ from his translator's.
AT&T Sets IPad Sales Record
Apple wasn't the only company making money from its new iPad launch last Friday, as AT&T said it set a record for the most iPad sales and activations in one day.
The Cupertino, Calif.-based company hasn't said exactly how many new iPad 2 tablets were sold last year, but some analysts estimated about one million units were sold on that device's first weekend -- meaning even more than a million new iPads may have been sold this past weekend, just after its launch.
At Apple's flagship Fifth Avenue store in New York city, an estimated 13,000 new iPads were sold during the first 12 hours of its launch, for an average of about 18 per minute. The store's daily revenue, usually falling between $700,000 to $1 million, was up to $11.5 million on launch day.
Apple Hits with Suit from Chinese Authors Over Piracy
A group of prominent Chinese writers want millions of dollars in compensation from Apple over allegedly selling pirated versions of their books in its iTunes store.
Twelve authors have filed three separate lawsuits in a Beijing court, saying 59 of their titles were sold unlicensed through Apple's iTunes online store. The three suits together demand $3.5 million from Apple.
The case is one of several legal battles for Apple in China. The company was recently targeted by Proview, a Chinese monitor and LED light maker, which says it registered the iPad trademark more than a decade ago and now seeks compensation as well from the Cupertino, Calif.-based company.
The new iPad may be literally "too hot" to handle, as users complain about the tablet's high temperatures.
The new iPad debuted last week to much fanfare, but some users are wishing the tablet came with a fan, as reports suggest the device becomes noticeably hot to the touch after about 30 minutes of use.
Users report the new iPad exceeds its highest working temperature of 95 degrees after a short period of time, prompting the device to display a warning screen saying, "The iPad needs to cool down."
Concerned consumers are flocking to Apple's Discussion Board and the MacRumors Forum to hash out the issue, but Apple has kept mum about the possible glitch.
The Apple website offers directions about keeping its devices within reasonable operating temperatures, but the early user reports indicate overheating under normal circumstances, meaning consumers in hot climates may experience problems keeping their new iPads cool.
The new iPad comes equipped with a larger battery to support the highly lauded Retina display and optional LTE network, and the third-generation iPad's heat problems may stem from its bulky battery. Apple promotes the features running off the larger battery, and faults arising from the heftier power source could reflect poorly on the company, as Apple took over a year to develop the device.
But a quick response could quell concerns, as was the case with when the company overcome battery glitches plaguing other devices, like the iPhone 4S.
Apple has yet to respond, but this is not the first time users complained about its products overheating. Two iPhone 4 handsets exploded, sparking overheating concerns about its smartphones, although the incidents remain few and far between.
The Cupertino, Calif.-based company remains ahead of the game in the smartphone and tablet industry, with devices flying off the shelves. Overall customer satisfaction with its older products remains high, and Apple enjoys unprecedented user loyalty.
The new iPad will probably not start on fire, but its uncomfortably high temperatures could ignite problems for Apple. If reports about the potential overheating problem continue unabated, though, the issue will likely eke away at Apple's reputation, so the company is expected to respond if rumors persist and prove to extend beyond isolated experiences.
Apple today released the new iPad, featuring a sharper Retina display, as the company pushes its lead in the tablet market.
Well before 8 a.m. today, buyers lined up for the new iPad, which comes in 16-, 32- and 64-gigabyte Wi-Fi versions, and sells for $500, $600 and $700, respectively. Models that support Verizon and AT&T's LTE networks cost an additional $130.
The new iPad is powered by the A5x dual-core processor to boost overall performance and a quad-core graphical processing unit for increased visual performance. The device also features a rear-facing 5-megapixel camera and a front-facing VGA lens to take advantage of Apple's Facetime feature.
Apple's new tablet is receiving glowing reviews, with analysts raving about the device's display, performance and strong battery life when being used over LTE. Strong critical reception, coupled with long lines outside Apple's retail stores today and the sell out of initial stock online, are strong evidence that the new iPad is living up to both fans' and analysts' expectations.
Lines started even earlier this year as Wal-Marts across the country began selling the device at midnight, eight hours before all other retailers, including the Apple Store itself.
However, just because the new tablet has everything Apple promised does not necessarily mean it will enjoy the same level of success as its predecessors.
Apple's market share of the tablet market took a bit of a hit in the fourth quarter of 2011, falling from 62 percent to 55 percent, according to the International Data Corporation. Part of the drop can likely be attributed to customers' anticipation of a new iPad and hopes that the iPad 2 would receive a price drop. Still, less-expensive tablets like Amazon's Kindle Fire and Barnes & Noble's Nook Tablet emerged as real competition for Apple and helped steal away sales during the holiday season.
The discounted price of the iPad 2 will likely help Apple attract some customers not willing to stretch for the newest version of its tablet, but at $400 it's still twice as expensive as the Fire and Nook Tablet.
The new iPad may be the best tablet from Apple yet, and analysts expect the company to still lead the market, but it's no longer the only player in the game that bears watching.
AT&T is offering a man a deal he can't refuse, while HTC is offering the long-elusive Android Ice Cream Sandwich update on several of its phones. Meanwhile, European carriers are accused of colluding to fix prices, while Apple promotes gift cards for trade-ins.
AT&T Offers Settlement, Threats in Throttling Case
AT&T is offering a settlement to an iPhone user who won a small claims court judgment over how the carrier throttles service for unlimited data users.
The company sent Matthew Spaccarelli, a 39-year-old truck driver, a settlement letter, but didn't say it would offer him more money. However, AT&T threatened to shut off his service if he didn't sit down to talk with them, and reminded him he violated the company's terms of service when he tethered his iPad to his iPhone.
Spaccerelli was also told he would need to sign a confidentiality agreement before the settlement deal could be discussed further. He likely won't be the last disgruntled customer as carriers shift from unlimited data plans to manage spectrum overload.
HTC Ready to Feed Ice Cream Sandwich Cravings
HTC is getting ready to release a slew of Android devices with the Ice Cream Sandwich update, answering the demands of consumers hungry for the upgrade, which has been slow to roll out.
U.S. buyers will be able to update the Droid Incredible 2, Amaze 4G, Evo 3D, Evo Design 4G and Sensation 4G. The Resound will also get a scoop of ICS, to go along with its Beats Audio technology.
If you bought a ThunderBolt or HTC Vivid, last year, you'll get the upgrade as well -- but HTC hasn't said when.
European Commission Asks if Carriers Are Colluding
The European Commission may be investigating cell phone carriers for allegedly colluding on prices and policies and hindering competition, sources revealed.
The carriers, including Deutsch Telekom (T-Mobile), France Telecom (Orange), Telecom Italia, Telefonica (O2) and Vodaphone, may have discussed challenges Android and iPhones provide for mobile competition, as well as standardizing near-field communications transactions. The commission reportedly received a letter from the carriers, complaining sites like YouTube create strains on their networks.
The commission has not yet started a full probe.
Apple Offering Gift Cards for "Old" IPad
Apple is offering Apple Store gift cards in exchange for the iPad 2, which could shave off a lot of money from the new iPad after it comes out later this week.
The maximum trade-in value for an Apple iPad 2 64GB WiFi + 3G model appears to be $320. To get that much, owners must have a "perfect condition" iPad 2 with no scuffing or engraving, and the tablet must be stripped clean of data and sent in along with a power cord. Cracks, water damage and wear will also affect how much Apple will give for it. The incentive will likely help fuel sales of the new iPad, taking advantage of consumers' eagerness for the device.
LightSquared Assembles Legal "Dream Team"
LightSquared appears to be "lawyering up" to fight back against the Federal Communications Commission, which blocked its network over concerns it would interfere with the nation's commercial, aviation and consumer GPS devices.
The company hired former Bush administration Solicitor General Ted Olson and Eugene Scalia, son of Supreme Court Justice Antonin Scalia, to help it overcome its regulatory setbacks. The lawyers could also help LightSquared salvage some of its $4 billion investment in the wireless network.
"We will do all we can to ensure that LightSquared does not lose billions of dollars in investments due to a precipitous, arbitrary reversal by the government," Olson said.
LightSquared may not sue over the FCC's ruling, but with the new legal "dream team," a lawsuit is becoming even more possible as it fights to remain viable in the industry.
Apple will sell its new iPad at retail stores this Friday starting on 8 a.m. EST, hours before other locations, jumpstarting an increasingly-fierce battle in the tablet market.
If past launches are any indication, buyers might want to arrive early. Customers lined up practically overnight to get the iPad 2 last year, and the device caused near-riot status when it debuted in Beijing.
However, the new iPad arrives in a more crowded tablet market compared to last year. The Amazon Kindle Fire tablet shattered sales records after its November launch, luring customers with its $200 price tag. Barnes and Noble's $250 Nook tablet also proved popular, and rival Google is launching its own branded tablet later this spring. With far more reasonably priced alternatives available for consumers, the new iPad faces challenges its predecessor didn't.
Retailers like eBay also offer special trade-in deals for iPad 2 owners looking to upgrade. Thousands of the relatively new tablets will be resold secondhand at lower prices, meaning Apple could give itself competition with great deals on the iPad 2.
Still, Apple's third-generation device boasts several new attractive features that could propel its success, and pre-order stock is already sold out online. The new iPad's high-resolution retina display, A5X chip with quad-core graphics processing, 5-megapixel iSight camera with advanced optics, and 4G LTE capability make it one of the most advanced tablets to hit the market so far.
Customers in the U.S. can purchase the new iPad at Best Buy, Radio Shack, Sam's Club, Target and Wal-Mart, or from carriers AT&T and Verizon. However, new iPads purchased directly from Apple retail stores include free "Personal Setup" service, including e-mail set-up, software installation, demonstrations, and more, and Apple employees are likely to have a busy day on Friday.
The new iPad arrives Friday in the U.S., Australia, Canada, France, Germany, the U.K., Hong Kong, Japan, Singapore, Switzerland, Puerto Rico and the U.S. Virgin Islands. Apple will roll out the device in 25 other countries on March 23, including Italy, Ireland, Mexico, Norway, Poland, and Sweden.
Prices for the new iPad range from $500 for the 16-gigabyte model to $700 for the 64-gigabyte version.
With the iPad 2 less than a year old and other strong tablets on the market, the world is waiting to see if Apple's newest iPad has what it takes to outdo its predecessors and keep its strong hold on the tablet market.
Samsung inked a deal as the sole iPad screen maker, but others may seek to get in on Apple's new launch as the tech heavyweights intensify a market partnership while battling in court.
According to multiple reports, Samsung edged out Sharp and LG for meeting quality requirements to provide high-resolution screens for the highly anticipated device.
Samsung, the world's top panel maker, can benefit in the long-term from providing the iPad screen. But ongoing court battles between Samsung and Apple over patent infringement and copycat claims in no less than 10 countries make for a volatile relationship. The courtroom strategies are complex, as both companies have attempted to ban sales of devices, but if Apple secures another manufacturer to provide its technology, it could deepen the rift.
The relationship between Apple and Samsung raised concerns from the European Union over stifling market competition, stemming from many cases claiming patent infringement. But even before the iPad screen arrangement, Apple already relied on Samsung for central parts of its iOS products, like chips and processors, earning Samsung $8 billion in 2010 and making Apple its biggest customer.
Given the technology involved in the new iPad screen, the relationship will prove even more lucrative, and possibly contentious. The new iPad is the first device with the evolutionary retina display, with near invisible pixels at a 2,048 by 1,536 pixel display. A screen that can support such technology is likely to earn plenty of profits for the chosen manufacturer, especially since the iPad is positioned for record-breaking sales.
But given the growing battles, Apple may want to find someone other than Samsung to meet those requirements, and other contenders are rumored as the new iPad continues to roll off the assembly line. An unnamed source from LG told Reuters LG also has a panel supply deal with Apple. If correct, the development could lessen Apple's dependence on Samsung, freeing the California company to better pursue its claims that Samsung copies its iPad.
But the Samsung partnership may also be a strategy to keep one of Apple's rivals at bay. Apple, threatened by Android smartphones and tablets, could prevent its rival from pursuing a sales ban on the new iPad by keeping Samsung involved, which could deter the Korean company from jeopardizing its own profits. By giving Samsung such a large stake in the new iPad's success, Apple could deter its rival from pursuing the product with legal action.
Samsung may have scored big with the iPad screen supply line, but there's strong indications rivals will attempt to challenge that exclusivity. If Samsung keeps producing for Apple, it could impact its attempts to sue for infringement, especially as regulators examine the relationship, affecting its legal concerns and potential profits.
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