Apple and Samsung Electronics, the "two-horse team" leading the global smartphone market, posted contrasting results in Apr.–Jun. While both companies sold smartphones well, Apple generated solid revenue without raising product prices, but Samsung Electronics failed to overcome the surge in component prices such as semiconductor memory despite increasing prices for some models. Apple chief Tim Cook, CEO, capped his final earnings call of his tenure with the highest quarterly sales ever in Apr.–Jun., but Samsung Electronics leaders Roh Tae-Moon, head of DX institutional sector (president) and head of MX business, and Choi Won-joon, MX business chief operating officer (COO), were left with the dishonor of the first quarterly loss on record.
Apple said on the 30th (local time) that iPhone sales in the third quarter of fiscal year 2026 (Apr.–Jun.) rose 22% year over year to $54.25 billion (about 75 trillion won). That beat the forecast of $53.86 billion by financial data firm LSEG. With iPhones selling well, Apple's total sales also rose 16% year over year to $109.42 billion (about 157 trillion won), topping the $108.65 billion projected by analysts. In Apr.–Jun., Apple's overall gross margin was 50.1%, up 3.6 percentage points from a year earlier. iPhones account for about half of Apple's revenue, services such as App Store and iCloud subscriptions make up another 30%, and Macs, the PCs, account for 10%.
Samsung Electronics said on the 30th that Apr.–Jun. (second quarter) mobile experience (MX) and network sales rose 13.7% year over year to 33 trillion won. However, Samsung Electronics said operating profit in Apr.–Jun. swung to a loss from a 3 trillion won surplus a year earlier, recording an operating loss of 700 billion won. Considering that the network business improved year over year on the back of overseas sales within MX and network, the loss can be seen as stemming from smartphones. On the smartphone business loss, Samsung Electronics explained, "Operating profit decreased due to rising component costs and other expanded expense burdens across the industry." In other words, despite strong smartphone sales, higher prices for key components such as memory eroded profitability.
◇ Diverging fortunes on ability to absorb cost increases… high royalties and a stable revenue structure shine in a crisis
According to Counterpoint Research, as of the first quarter, DRAM and NAND flash prices rose more than 50% and 90%, respectively, from the previous quarter. Memory typically accounts for about 20% of a smartphone's manufacturing cost. The burden is even greater for mid- to low-end smartphones. Counterpoint Research estimated that memory expense makes up 43% of total cost in entry-level smartphones priced at $200 (about 290,000 won) or less. Semiconductor prices continued to rise in the second quarter.
In a "chipflation (memory + inflation)" environment of rising semiconductor prices, differences in revenue structures that can absorb cost increases are cited as a key factor behind Apple's and Samsung Electronics' diverging fortunes. Apple runs its iPhone lineup around premium models, maintaining a high average selling price (ASP). In contrast, Samsung Electronics pursues a strategy of expanding global market share by offering a broad range from high-end flagships to mid- to low-end Galaxy A series models. As a result, while Samsung Electronics is competitive in terms of shipment volume, its per-unit profitability is comparatively lower than Apple's. According to Counterpoint Research, Samsung Electronics' ASP in the first quarter was $340, just 37% of Apple's ($908).
Ultimately, in a situation where prices for components such as memory are surging, the difference in "how much is left per unit" decided the outcome. Apple, with its high ASP and margins, had more room to absorb cost shocks, whereas Samsung Electronics found it difficult to offset cost pressures even with price increases.
Bang Hyo-chang, professor in the Department of Smart IT at Doowon Technical University (policy committee chair at the Citizens' Coalition for Economic Justice), said, "Apple's product portfolio centered on high-end smartphones delivers a net margin of 20% to 30%," adding, "By contrast, Samsung's mid- to low-end lineup has almost no margin, and even its high-end flagships have a 15% margin, lower than Apple's." Jeff Fieldhack, a director at Counterpoint Research, said, "Unlike competitors, Apple shows the capacity to absorb bill of materials (BOM) increases and a structure relatively free in a memory crisis situation."
That said, it is also a reality that Samsung cannot simply pursue a high-end–focused strategy like Apple. Compared with Apple, Samsung has relatively lower brand recognition and customer loyalty, so if it does not offer mid- to low-end products, it cedes the market to Chinese firms and its footing narrows.
◇ Apple, seeking Chinese supply chains, also faces limits… "Samsung cannot blame rising component prices alone"
Even so, the outlook is a burden for Apple as well. Apple presented guidance for sales growth of 9% to 11% in Jul.–Sep. That falls short of the 12% forecast compiled by financial data firm LSEG. Apple is seeing cost pressures from surging memory prices materialize, and its position in supply chains is not what it used to be. On top of that, Apple recently sought to source products from Chinese companies to mitigate the impact of soaring memory prices. However, with U.S. bipartisan senators urging Apple not to purchase products from Chinese memory chipmakers Changxin Memory Technologies (CXMT) and Yangtze Memory Technologies (YMTC), it faces an awkward situation.
Asked about the idea of procuring memory from new suppliers, CEO Tim Cook said, "As everyone knows, there are mainly three suppliers in the DRAM market," adding, "If there are more suppliers, it helps on the supply side and can also help on price." Bloomberg analyzed the remarks as hinting at the possibility that Cook could tap Chinese chipmakers for memory chip production.
Supply chain management is also not what it once was. One major cause of supply disruptions is the supply of core chips for products. Devices like Macs and iPhones need computer chip microprocessors that enable faster operation. Apple has produced most of those chips through TSMC, headquartered in Taiwan. Cook said, "Frankly, this is not a general supply issue but a demand forecasting issue," adding, "We will face difficulties on the supply side for the next quarter."
Hong In-gi, professor in the Department of Electrical and Electronic Engineering at Kyunghee University, said, "So far, Apple appears to have delivered strong results by procuring components at previously contracted supply prices thanks to its solid market position, or by stockpiling inventory in advance," but added, "Seeing Apple explore Chinese supply chains suggests it has reached its limits."
Experts also say it is hard to blame the smartphone business loss at Samsung Electronics solely on rising component prices. There are management domains such as supply chain management, product pricing, and marketing.
Wi Jeong-hyeon, professor in the Department of Business Administration at Chung-Ang University, said, "Apple and Samsung are powerhouses in the global smartphone market, but Samsung is very vulnerable compared with Apple in terms of brand and loyalty," adding, "If Roh Tae-Moon, head of the DX institutional sector, focuses only on short-term sales performance and does not work on brand and loyalty improvements from a long-term perspective, it will collapse among future generations in an instant." Hwang Yong-sik, professor in the School of Business Administration at Sejong University, said, "Roh Tae-Moon has written the Galaxy legend well so far, but now it is time to make managerial changes to Samsung's strategy of expanding the market," adding, "These contrasting results show starkly that, in a crisis, Samsung lagged Apple in margin structure, supply chains, and return management."