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Apple vs Samsung

Ever since the introduction of the Galaxy S series in 2010, Apple and Samsung Electronics have vied for smartphone supremacy. Read all about that history – and how it has played across the markets – here.

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Wall Street
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Apple and Samsung key info

Company Apple (AAPL) Samsung Electronics (005930)
Founded 1976 1938 (Samsung)
Founders Steve Jobs 
Steve Wozniak 
Ronald Wayne
Lee Byung-chul
Headquarters Cupertino, USA Samsung town, South Korea
Stock exchange NASDAQ Korea exchange (KRX)

 

 

iPhone vs Galaxy: a brief history

The birth of the modern smartphone

As Apple cynics like to point out, the company didn’t invent the smartphone. Many variants on the concept existed before the iPhone launched in 2007 – including the Blackberry, which was first released by Research in Motion all the way back in 2002.

That shouldn’t undermine the step forward that the iPhone presented, though. Almost every smartphone that came before was encumbered with either a keypad or a full QWERTY keyboard – the iPhone used a multi-touch screen, making it accessible for all and bringing a striking new design.

That design earned the iPhone instant admiration. People queued for days to be among the lucky few to get one of the first models, and it was clear from the off that Apple had a success on its hands.

It was clear on the markets, too. When the first iPhone hit the shops in the US on 29 June 2007, Apple shares were trading at around $17. By the end of the year they were above $28, marking the beginning of Apple’s rise to the top of the global stock market.

Android and Samsung enter the market

By the time Google released its Android operating system to rival Apple’s iOS – the basis of every Apple smartphone to date – Steve Jobs’ company had already upgraded the iPhone with a new 3G model.

And when Samsung launched its first flagship Galaxy S Android phone in June 2010, Apple was up to the iPhone 4. Samsung had the advantage in terms of global phone sales, however, as the world’s second-biggest mobile phone maker. It was behind only Nokia, although most of those sales were from mobile phones rather than smartphones.

The company took to smartphones quickly. The Galaxy S was the world’s most powerful – and thinnest – phone available at the time. It was a major success, helping Samsung shares grow 25% that year.

Patent wars

When Samsung Electronics released the first Galaxy S in 2010, it wasn’t just investors and tech enthusiasts that sat up and took notice. Apple’s top management – including Steve Jobs himself – were incensed, feeling that the phone’s design was far too similar to the iPhone.

Adding insult to injury was the fact that Samsung was one of Apple’s major suppliers. In 2010, Apple was Samsung’s second-biggest customer (behind Sony), and used the Korean company’s processors in the iPhone 4.

Litigation started in spring 2011, and by August the two companies were engaged in 19 cases across nine countries as they sued and countersued each other over a variety of perceived infringements. The ongoing battles cost both companies billions, and brought other smartphone manufacturers into a massive patent war.

In 2012, a US jury awarded Apple $1.05 billion in damages over patent infringements. While the award was far below the $2.5 billion request by Apple, it still led to the largest single-day fall in Samsung stock since the 2008 financial crash. The war was far from over, though, with several countries ruling in Samsung’s favour instead over the next several years.

The smartphone takes over

The Galaxy S II arrived a year later, alongside a new size of smartphone: the Galaxy Note. Both helped the company catch up to Apple’s smartphone dominance, and in Q3 2011 Samsung overtook Apple as the world’s biggest smartphone seller – albeit partly because Apple’s latest model, the iPhone 4S, had not yet hit shelves.

On the markets, Samsung was also proving popular. Its shares went on a staggering run from July 2011 to March 2012, from ₩744,000 up to a record high of ₩1,390,000, a rise of 87%.

Meanwhile, the impressive growth of the iPhone helped Apple become the world’s most valuable company for the first time in 2011, with a market cap of $353 billion. By the end of the year, Apple shares had grown over 300% from the first iPhone – putting even Samsung into the shade.

Samsung stumbles

On 19 August 2016, Samsung Electronics released the Note 7, a successor to the Note 5. Sales were strong, but reports that the battery was overheating and sometimes causing the phone to catch fire meant the launch was swiftly followed by a recall.

The company cut its revenue expectations by ₩2 trillion off the back of the recall, and many predicted that the debacle would dent Samsung’s brand. 

Ten years of iPhone

In 2017, Apple celebrated the tenth anniversary of the iPhone with the launch of the iPhone X. At $999, it cost more than double the original.

At the time of the X’s release, Apple had been the biggest company in the world by market cap for 17 straight quarters. Five days after, its market cap exceeded $900 billion for the first time, leading many to predict that it would become the first ever trillion-dollar business.

Samsung, meanwhile, had cemented its place as the king of smartphone sales, with 80 million units shipped in Q1 2017 according to analysts IDC. After struggling from the Note 7, Samsung Electronics shares went on another stunning run, up to  ₩2,819,000 at the time of the iPhone X’s release.

At the beginning of 2017, analyst firm Gartner estimated Samsung’s smartphone market share to be 20.7% to Apple’s 13.7%.

Smartphone launches

1. iPhone

2. iPhone 3G

3. iPhone 3GS vs Galaxy

4. iPhone 4 vs galaxy S

5. iPhone 4S vs Galaxy S II / Note

6. iPhone 5 vs Galaxy S III / Note II

7. iPhone 5S / 5C vs Galaxy S4 / Note

8. iPhone 6 / 6 Plus vs Galaxy S5 / S5 Edge / Note 4 / Note Edge

9. iPhone 6S / 6S Plus vs Galaxy S6 / S6 Edge / S6 Edge Plus / Note 5

10. iPhone SE / 7 / 7 Plus vs Galaxy S7 / S7 Edge / Note 7 (disc. October 2016)

11. iPhone 8 / 8S / X vs Galaxy S8 / S8 + / Note 8

Will Samsung’s market cap ever overtake Apple’s?

From the release of the first Galaxy S to the iPhone X, Samsung Electronics’ share price grew over 250%. In the same timeframe, Apple’s grew over 275%.

That performance may look close, but considering Samsung Electronics had a market cap below $400 billion as the iPhone X came out – well off Apple’s $900 billion – it doesn’t look like Samsung will be challenging soon.

Part of the problem may be Samsung’s continued focus on producing high and low-end versions of all its phones.

In 2016, for instance, the company released 31 new models to Apple’s three. The company may dominate in terms of market share, but its mobile phone revenues were around half of Apple’s in 2016.

In the digital age, it shouldn’t surprise anyone that the businesses currently vying for the title of world’s most valuable stock are the ‘big five’ tech companies: Apple, Google (listed as Alphabet), Microsoft, Amazon and Facebook. At the time of the iPhone X’s release, the big five had a combined market cap in excess of $3 trillion.  

How to trade Apple and Samsung with IG

With IG, you can trade on their price movements. Here’s a quick introduction to the differences between the two:

Trading Apple and Samsung Electronics

  • Speculate on Apple and Samsung share price movements using CFDs
  • Never own the shares themselves, do not receive voting rights
  • Use leverage, meaning you only pay a deposit to open each trade
  • You can lose more than you deposit
  • Take a short position if you think Apple or Samsung might go down in price

Three things to know before trading Apple

1. Currency conversion fees

Unless you’re a US investor, you’ll have to convert currency to buy Apple. At IG, we list US shares in dollars, so you know exactly what you’re paying, and our currency conversion fee is just 0.3%.

2. You don’t have to trade Apple itself

As the world’s most valuable business, Apple has relationships with lots of other companies. ARM, for instance, supply Apple with lots of technology, and ARM’s share price can be affected by what Apple does.

3. Apple is more than the iPhone

While many investors will look straight to iPhone sales when Apple releases earnings, the company’s other ventures are also important. So pay attention to how the Apple Watch, iPad, and iMac are performing as well.

Three things to know before trading Samsung Electronics

1. You can use a GDR

Instead of having to buy or sell Samsung Electronics on the Korean Exchange, you can use a global depository receipt. Samsung’s GDR is traded on the London Stock Exchange. 

2. Samsung is a chaebol

Samsung Electronics is the flagship company in the Samsung Group, a major Korean chaebol. A chaebol is a unique Korean business, made up of a group of different affiliates – most of which have their own listings. 

3. When will they release a foldable phone?

Touted by many as the next big step in smartphone innovation, rumours that Samsung will soon release a foldable device have abounded for some time. If that release arrives, it could have a major impact on its share price.

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CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.