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The different strategies of Apple and Samsung in getting to the point where the two companies now dominate the smartphone market. Whereas Apple makes only one phone, its iPhone, Samsung's strategy is to have multiple phones in each price segment. It has five levels of Android based phones, with 2-3 models in each price segment. Samsung also benefits from doing its own maufacturing. When faced with a number of technologies Samsung's strategy is to bet on all of the technologies until one of them emerges as a winner, and then concentrate resources on that technology. It uses a similiar strategy for televisions. Apple by contrast places more emphasis on original design and profit margins over sales, gaining sales without eroding margins by being the first innovator in the market. It also has its own unique arrangement for manufacturing at lowcost with Foxconn in China that supports its high margins. Apple is secretive about its designs and promotes its brand heavily with its own retail stores. Apple also uses its innovative edge as leverage to steer profits away from carriers. Analyst estimates are that carriers such as AT&T and Verizon pay about $400 per iPhone to subsidize its cost because this is the only way to get customers into their retail stores. IDC estimates are that the smartphone market is $219 billon in 2012. Both companies are very close in volume- IDC estimates Apple shipped 93.2 million smartphones in 2011, compared to Samsung's 94 million units. Apple has market share of 23.5% in the fourth quarter 2012, up from 16% in 2010. Samsung has 22.8%, up from 9.4% in 2010. Apple and Samsung have together taken 91% of operating profits of all cellphone companies in the fourth quarter, an increase of 30% from 2011, according to Strategy Analytics....

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Analyst estimates show Samsung taking 43% of smartphone profits to Apple's 57%. This is up from 26% for Samsung and 74% for Apple in the 1st quarter of 2012. Samsung could soon surpass Apple because of the wide range of models and its manufacturing capabilities. Apple sees a shrinking of margins in coming years.

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Apple maintains its grip on the tablet market with its iPad at $499. Experts at Wharton and the Stern School of Business say Apple has found the strategically right price to maintain a dominant share of a rapidly growing market. So rapidly growing that some estimates show tablet computers surpassing PC sales by 2013. Apple CEO Tim Cook, has the logistical expertise that helped him work out the right price. The Kindle at $199 is hardly profitable by some estimates. Samsung has a smaller tablet at $499. In 2011 Apple saw its tablet market share decline from 87% to 68%, according to IDC Research, but still able to get a dominant share of sales. Apple uses the same approach to pricing for the iPhone. The profits generated on large sales and higher margins helps Apple invest in new products.

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David Segal takes a detailed look inside Apple's retail stores in the U.S. and talks with employees at different stores to find out what its like working as an hourly employee at an Apple store. World wide Apple's 327 global stores sold $16 billion in Apple products. Per employee the sales are about $473,000, but at an hourly rate of about $12 the average employee makes about $25,000 per year. After recent wage raises this could be up to about $36,000. The National Retail Federation says electronics stores have about an average of $206,000 in sales per employee. Contrary to what most people may think most of Apple's employees are not engineers and other professionals, about 30,000 of the 43,000 Apple employees in the U.S. work as hourly employees in the retail stores. Most are young people in the early 20's, single, with health insurance provided by Apple not costing as much for that age group. There is no career path and most leave after a couple of years. Because of the Apple mystique and the drive to create new user friendly products there are many young people looking for this kind of temporary work, especially now with high unemployment. ...

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Apple iWatch sales are about 11 million -15 million units in last 4 quarters. The iWatch sales are a small fraction of sales overall. Apple quarterly profit declines by 22.5%, as revenue declines and iPhone sales decline. Half of the quarterly revenue decline comes from China. This has hurt the share price by May 2016.

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Stock buyback strategies change as U.S. companies support falling stock price during down cycles and pull back as prices rise higher.

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Jenkins sees risks to Apple's closed ecosystem and decline in margins of $300 on devices priced at $600.

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Nokia slips into seventh place in the smartphone market in Nov. 2012, as Apple and Samsung take the lead with combined 46.5% market share, and HTC, RIM overtake Nokia. Nokia has only 4.3% of the smartphone sales worldwide. Smartphones now account for about 40% of all mobile phone sales worldwide according to Gartner Inc., and sales are growing fast with a 47% increase in global smartphone sales in the third quarter according to Gartner Inc. Worldwide 169.2 million smartphones were sold in the third quarter of 2012. Microsoft operating system and Nokia's Symbian system account for only 5% of the operating systems on smartphones in the third quarter 2012, says Gartner. By comparison Google's open end Android platform accounts for 72.4% of smartphones, increasing from 52.5% the prior year.

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With the introduction of the iPhone 4S, Apple announced the iPhone 3GS will be offered free, and the iPhone 4 for $99. This puts Apple iPhones priced to compete with smartphones in the middle and lower price ranges in the market. The free iPhone is a model first introduced in 2009. As the expansion of the smartphone market is now ocurring at the low and mid price ranges, companies making smartphones using Google's Android software and Blackberry's RIM are targeting this market. In the U.S., as of the end of July 2011, 82 million Americans owned smartphones, increasing 10% from the prior quarter, according to comScore. 42% of U.S. smartphone users use Android phones, only 27% use Apple phones, as of the end of July 2011, because of the price difference. In India Apple iPhones have barely made a dent because of large price differences. Rapid growth expected in emerging markets will also make this low end of the smartphone market attractive for Apple.

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Microsoft is making management changes in the unit which makes the Xbox, Zune music player, phone software. There have been some successes with the Xbox gaming console, but the Zune music player and phone software have done poorly. Robbie Bach, the head of this group is leaving. Microsoft has also cancelled a project to make a tablet computer to compete with Apples's iPad. After years of working on the tablet computer Microsoft found itself falling completely behind when Apple's iPad became a sensational seller, and HP's acquisition of Palm also sent signals to Microsoft. Analysts say the departure of Bach who was with Microsoft for 22 years, and of other executives in the revamping, will do little to change things. They question that Ballmer has the same touch and feel for the customer, which is something rare, and which Apple has at this time.