Apple and Samsung have had running economic battles, each trying to take the lion's share of the smart phone market. In quarter one, 2022, Samsung has taken the top spot from Apple in market share. As a single brand, Samsung was the only brand to grow its market share in the first quarter of 2022.
You may recall that Apple sued Samsung for copying Apple design and software features, initially the court ordered Samsung to pay $1billion to Apple, but on appeal, it was eventually wittled down to $140 million, that Samsung owed Apple. It is not clear how much Apple will actually receive from Samsung.
It’s all a smoke screen
You may not be aware that Apple actually purchases the screens for their iPhones from Samsung, so that is rather surprising. The question arises whether Samsung will just charge the money owed for the fine through screen price increases to Apple?
Australian Ad campaign — Samsung to pay $14million in fines.
In marketing and advertising there is a term called ‘puffery’ which is exaggerated hyperbole. These are sales and marketing phrases like:
‘the best product for the job’ or ‘the world’s best pies’ or ‘the last product you’ll ever need’ none of these statements are true. They are highly subjective statements. The industry and consumers understand this, and they realise the subjective nature of the claims.
False advertising occurs when the statement is false objectively, so when a statement like ‘The new X model uses only 2 gallons per 300 miles’ This is a statement that is an objective statement that can be tested and verified. If it is found that the X model does not use only 2 gallons per 300 miles, then that is false advertising.
Samsung ran an advertising campaign falsely claiming that their phones are waterproof and that you can swim with your Samsung Galaxy.
The advertising campaign showed the phone being water resistant in pools and sea water.
The advert was misleading as to the level of water resistance that the phone offers.
When Samsung Galaxy users started to complain that the phone lost some or all of its functionality after being exposed to water, the Australian Competition and Consumer Commission (ACCC) sued Samsung in July 2019, remember that? 2019, before the pandemic, oh the good old days.
The ACCC further ruled that making such claims would have been a strong selling point for the phones and may most times have driven the purchase of such phones by consumers.
Apple and any other competitor had every right to complain abot this false claim which most definitely have affected the sales of their products that compete with the Samsung Galaxy.
It remains to be seen how much of this fine Samsung will pay but if there is one thing I know about Australia, it is not very easy to get out of paying these fines once a ruling has been made.
The war continues, as it has for so many other segments of the market, Nike vs Adidas. Adidas vs Puma, Mercedes Benz vs BMW, Coca-Cola vs Pepsi, and so on and so forth.
Apple really need to find another supplier for their screens, I know they were working with a Chinese company, and they would do well to remove themselves from relying on supply of key components from a key competitor, business startegy 101…
I hope you enjoyed the article and you understand a little more about puffery and false advertising claims.
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Corporate Director, writing about health, weird phenomena, leadership, good ideas, in Data Driven Investor, Writers’ Blokke, Illumination.
Sergio Alberto Romero, M.S.