Is Apple Borrowing Samsung’s Market Expansion Strategy?

Key Takeaways

• Bernstein maintains Outperform rating with $340 price target for Apple
• Apple aims to capture 10% of Chinese smartphone market
• New AirPods Max 2 priced at $549 expands premium audio lineup
• Apple plans foldable iPhone, signaling entry into premium foldable segment
• App Store commission in China reduced from 30% to 25%

Pulse Analysis

Apple’s latest strategic moves echo Samsung’s historic market‑share surge, but the context has shifted. By widening its price bands—introducing a $549 AirPods Max 2 at the high end and targeting budget‑conscious consumers in China—Apple hopes to grow its installed base while preserving margin strength. The reduction of the App Store commission from 30% to 25% in China not only eases developer friction but also positions Apple to capture a larger slice of the country’s burgeoning services revenue, a critical lever as hardware growth slows globally.

Analysts project a 12% EPS lift for fiscal 2027, driven equally by hardware sales and services expansion. The key catalyst is Apple’s ambition to seize roughly 10% of the Chinese smartphone market, currently dominated by domestic manufacturers grappling with supply chain disruptions. A foldable iPhone, long rumored, would place Apple in the premium foldable niche where Samsung currently leads, potentially unlocking new pricing power and reinforcing the iOS ecosystem’s stickiness across device categories.

Meanwhile, Samsung’s handset division faces its first operating loss, even as its memory business outperforms rivals like Nvidia. This divergence highlights a broader industry trend: profit pools are migrating from volume‑driven phone sales to high‑margin components and software services. Apple’s multi‑pronged approach—premium hardware, expanded services, and strategic pricing—positions it to capture a larger share of these emerging profit pools, reshaping the competitive dynamics of the global smartphone market.