It’s time for a reality check at Apple and Samsung

Outlook

Apple (Getty Images)

Remember all those concerns about slowing iPhone sales? It turns out that Apple’s disappointing trading update was merely an hors d’oeuvre. The main course came from Samsung, the world’s biggest smartphone maker (Apple is No 2). It warned that this year’s profits will fail to live up to what it produced in 2015. Figures for the fourth quarter last year show that the South Korean giant’s components division led the charge downwards. It had been helping to offset sliding smartphone sales, but has now found itself in a slough of despond – prompting Samsung to say that it is redoubling efforts to win new business.

But the news on smartphones was hardly cheery, and its excitable talk about years of booming growth in emerging markets has proved to be… just talk. And that has left Samsung in a bind. With growth waning, it is still battling with the iPhone at the top and cheap Chinese offers at the bottom – and its last blockbuster release, the Galaxy S6, did little to excite.

And exciting customers is what the big guns need to be doing if they want to keep their Chinese rivals at bay, especially in a global slowdown. Why contribute to Samsung’s margins (or Apple’s) when you don’t need to and when they’re not offering the functions their price would imply? The status symbol of the brand, you say? I’ll worry about that when I’m not worried about the economy, my income or my job.

Smartphones are a must-have commodity. But if you can get something that’s nearly as good for a fraction of the price of an iPhone or a Galaxy, then why not? And, while we’re at it, why change your handset every year? It is this kind of thinking that Samsung and Apple both need to address. So far, they are looking short of answers.