Samsung is pushing the envelope of smartphone price elasticity, for the data shows that Samsung is sacrificing profit (price) for market share growth. From 2010 to 2011, Samsung achieved an astounding 3X growth in units sold. Although Apple has grown less than half as fast as Samsung, it is capturing nearly 6X the amount of profit that Samsung is capturing per smartphone. Apple is focused on other objectives: customer delight, profit growth and maximizing shareholder value. So which stock would you rather own?
Nevertheless, consumers are voting with their pocketbooks for which smartphone they want to own. Choosing a smartphone is easy when so many Android options are free. Now that the iPhone 3GS is free, the market share wars will accelerate. Unless a consumer walks into the Apple Retail Store, shopping for a smartphone will be more like the television game show - “Let’s Make a Deal.”