Why Apple Inc. (AAPL) Is Losing to Samsung

The battle

Apple is not unaware of the rising prominence of Samsung, nor the threat that Samsung poses to its market domination. In fact, Apple filed a lawsuit against Samsung and won a $1 billion settlement for patent infringement. While Samsung is appealing the decision, it is a clear indication that Samsung is serious competition.

Apple is already sitting on a record amount of cash with no clear idea of what to do with it. Adding $1 billion to the bottom line only adds to the already existing cash. Samsung gaining a massive advantage in the market place and developing what some would argue to be a better product, is well worth the cost of $1 billion dollars.

The next battle is, according to most experts, going to be in televisions, Samsung’s arguably strongest division. Apple is venturing out into dangerous grounds with televisions. Samsung already has massive infrastructure in place and has demonstrated, in the past, an ability to rapidly adjust to changing demands. In 2012 alone, Samsung spent over $21 billion on research and development, tooling equipment and production facilities.

Even more competition

If battling Samsung was not enough, Apple is also facing serious threats from Google and Microsoft.

It is already well established that Google’s Android operating system is gaining ground on the Apple iOS. U.S.-based Chitika Analytics reported that “Figures show that in December, Android’s share of mobile browsing in North America increased 5.5% to 51.6% while iOS dropped 5.2% to 46.5%.”

Microsoft is also making some serious headway with the advent of Windows 8 and its launch of its tablet line of computers, the Surface. With regards to technology and improved performance in tablet computing, the Microsoft Surface is above and beyond any other tablet on the market today that is running the iOS or the Android operating system. According to one report, the Microsoft surface is a game changer.

The bottom line

Remember that just a few months ago, Apple was over $700 per share; it has lost 36% from its high in September 2012. Apple has also slashed orders for the components in its iPhone 5, clearly indicative of waning demand, and the launch of the iPad mini was an unmitigated failure. Without some serious revolutions over at Apple, there is no end in sight for its declining stock price.

The article Why Apple Is Losing to Samsung originally appeared on Fool.com and is written by Maxwell Fisher.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.