The past week has been one to forget for both Apple and Samsung. While Cupertino was handed a hefty tax bill by the European Commission, Sammy has had to recall every Galaxy Note 7 unit sold so far for fear of them exploding.
But which one will be most damaging, and which will quickly be forgotten? Apple’s tax fight is sure to rage on for months, but will faulty phones leave a bad taste in the mouths of Samsung fans a lot longer?
Join us in this week’s Friday Night Fight as we discuss the sad start to September for Apple and Samsung.
Killian Bell: Both Apple and Samsung have had pretty terrible weeks that they’ll want to forget, but it seems like Samsung’s will be much easier to overcome.
There’s no denying that its Galaxy Note 7 recall couldn’t have happened at a worse time with the iPhone 7 right around the corner, and that’s surely going to have some impact on sales — but it will all be forgotten about once Samsung has replaced everyone’s phones, and demand for the Galaxy Note 7 will remain high.
In contrast, Apple’s big Irish tax bill is going to cost the company a fortune — $14.52 billion, to be exact. And rather than just pay up, the Cupertino company is going to fight it (with help from the Irish government), which means that like any Apple legal battle, we’re going to continue hearing about it for months.
Apple’s reputation is going to take a much bigger hit than Samsung’s, then. No one likes a billion-dollar corporation that avoids paying tax — but who’s going to say bad things about a company that gives you a brand new smartphone because 0.1 percent of all units sold were faulty?
Luke: I disagree. Ultimately, this is two questions in one: How much will the tax demands hurt Apple, and how much will the Note 7 debacle hurt Samsung?
On Apple’s side, I’m going to suggest it won’t be as painful as some are suggesting. Sure, the precedent of retroactively applying tax in Europe could hurt smaller companies which exploit similar tax arrangements, but it won’t ultimately make much of a dent on Apple. The company has $200 billion in the bank and the amount that you’re talking about is less than the profit Apple makes in a single quarter. If anything, you’d expect this decision — and Apple’s suggestion that it will fight it — to have a “scaring the horses” impact on investors, but AAPL stock hit its highest point of the week yesterday after all the news had come out.
In terms of reputation, I don’t see this making much of an impact, either. The global taxation system is flawed, something even Tim Cook has acknowledged, but the fault isn’t with individual companies in taking advantage of tax structures they believe to be legal. It would be far more damaging, in fact, if Apple suddenly announced that it was going to not structure its tax arrangements in this way. I argued earlier this week that Tim Cook is being a bit naive if he truly thinks he can appear to hold the moral high ground with his stance — as he has previously done on issues like LGBT rights and user privacy from surveillance — but for most people this wasn’t information they didn’t already know.
Samsung, on the other hand, has just launched a phone the tech press was raving about: only to then turn around and admit that one of its hottest features is the ability to blow you up while you’re charging it. It would be bad enough if this was taking place with a less high-profile phone at a different time of year. But we’re talking about the week before the iPhone 7 Plus — a.k.a. the Galaxy Note 4’s biggest rival — is set to be unveiled.
Given that many fans may now look elsewhere for their phone, and the damage this does to a brand which already suffers the stigma of making cheap, low-end products (regardless of whether or not you think this has changed), there’s no doubt about who had the worst week.
Incidentally, wasn’t Samsung the company which jumped on the iPhone 6 Plus when there were rumors that it bent slightly if you sat on it? I guess that kind of criticism is blowing up in their face now, isn’t it? Pun intended.
Killian: Just because you “suggest” it won’t be as bad as some say it will, that doesn’t mean Apple’s going to get off lightly. Sure, $14.52 billion seems small in comparison with how much cash Apple has in the bank, but it’s still a considerable sum of money that Tim Cook won’t be happy about handing over. Think about how many acquisitions Apple could make with that.
And yes, I agree the taxation system is flawed. Also, I don’t blame Apple for taking advantage of it. Any other company in that situation is going to hand over as little as it can, and so long as it’s legal, I don’t see anything wrong with that. No one can expect Apple to voluntarily pay more tax, no matter how much cash it has sat around.
Nevertheless, companies that avoid tax and have special deals with governments are never looked upon favourably. Look at all the petitions and boycotts that Vodafone was faced with back in 2010 when it was discovered that the U.K.’s HM Revenue and Customs wiped out a £4.8 billion ($6.38 billion) tax bill.
As for Samsung, yes exploding phones don’t look good, but the company is doing the right thing by recalling every single model sold and replacing them with brand new ones. Did we see Apple doing that when iPhone 4 owners couldn’t make calls with its dodgy antennas? Or when iPhone 6 Plus owners found their handsets bending in their pockets if their pants were too tight? No.
I don’t doubt that a small percentage of Galaxy Note 7 buyers may simply hand their phones back and choose another smartphone. But the vast majority won’t. It’s still the best device of 2016, and it has features you won’t get from the iPhone 7 Plus.
How many people do you really think will settle for an iPhone without wireless charging, a water-resistant design, a headphone jack, expandable storage, a curved display, an iris scanner, and everything else the Galaxy Note 7 has when they could be gifted a brand new model without any battery faults?
This won’t damage the Samsung brand because the company has acted quickly to address the problem. If it was ignoring it, then I would have massive concerns — but it isn’t. We’ll have forgotten it by Christmas while Apple’s fight against tax rages on.
Luke: So what exactly are you expecting to happen to Apple as a result of this then? I’ve already laid out the two ways this could conceivably hurt Apple, and argued why they won’t make the impact you think they will.
Samsung, on the other hand, has just had to remove a flagship phone from the market because it ran the risk of blowing up. The company has never had a good reputation for attention to detail, whether you like it or not, and this is the type of story which could have a significant impact on customer’s perceptions. Even if it doesn’t, the fact of the matter is that when Apple announces its new iPhone 7 next week Samsung will have lost the first mover advantage it had. I’m not expecting the iPhone 7 to be as revolutionary as next year’s model, but I still think it’s going to be pretty solid phone — and particularly in the dual-camera iPhone 7 Plus variation that Samsung’s Note 7 is competing against.
I know you want Apple to come out of this badly, and I know your love of Android devices means you’re blind to tiny faults like exploding handsets, but I don’t think your argument really holds too much water. You know, that wet stuff you need to keep close at hand if you’re a Galaxy Note 7 customer.
Killian: Handing over $14.52 billion in taxes will hurt Apple. Yes, the company will have plenty of cash left over, but that’s not a small fine, and Apple won’t be happy about paying it. It won’t be happy about fighting over it for months, either. This will be a drawn-out affair.
The Galaxy Note 7 issue will blow over, and it’s not going to hurt Samsung as much as you think it will. Once it goes on sale again without the battery issue, it will continue to be the best smartphone money can buy — even after the iPhone 7 makes its debut.
Anyway, let’s hand this one over to the readers now. Which company do you think has had the most damaging week? Apple with its giant tax bill? Or Samsung with its exploding smartphone?
Friday Night Fights is a series of weekly death matches between two no-mercy brawlers who will fight to the death — or at least agree to disagree — about which is better: Apple or Google, iOS or Android?
Killian Bell is a freelance writer based in the U.K. He has an interest in all things tech and also covers Android over at CultofAndroid.com. You can follow him on Twitter via @killianbell.
17 responses to “Whose week sucked hardest, Apple’s or Samsung’s? [Friday Night Fight]”
Wireless charging – but you STILL have to have something plugged into the wall
A water-resistant design – iPhones have already been shown to be water resistant and rumors point to it going further in the upcoming iPhone
A headphone jack – people cried when apple took away floppy drives, it’s a good thing Apple is around to push things forward or we’d still be using beige windows 95 boxes and samsung flip phones
Expandable storage – iPhone owners don’t want to have to purchase more memory cards, give us a choice of storage and the cloud, no need to over complicate with slower add on memory
A curved display – umm, just about every review says this is just a gimmick, a nice looking gimmick, but a gimmick 3rd party developers seem to be ignoring
An iris scanner – A slower way to unlock your phone Good job samsung! SMH
Exploding battery – let’s hope Apple doesn’t add this option, although I am really surprised Samsung didn’t come up with a way to call this a feature like their other hardware mistakes.
You also forgot to mention how an almost year old iPhone spanked the Note in real world usage.
As far as taxes, I’d rather trust Apple with that money overseas than seeing our government squander it away in seconds. There will be the diehard android fans that will say Apple is not paying their taxes, and then there will be the sane people who realize the EU is actually going after Ireland and that tax laws around the world are a mess.
Wireless charging is one of those cool if you have it, but it’s not a deal breaker or a “must have” feature.
Water Resistance/Water Proofing. Apple should have had at least IP68 rating by now, hopefully they’ll have IP68 or IP88 with the new iPhone.
Headphone jack – I can understand people still want a headphone jack. There are a lot of wired headphones/earbuds that people have spent a lot of money on, and now they have to use a dongle, which is just a little more inconvenient. I really think Apple’s pushing the thinness mentality just a little too far. It’s something to brag about, only if the thing doesn’t bend or have other problems relating to the lack of area to put a decent sized battery, and other things inside to make it a more functional product.
Expandable storage is insecure, or at least it has so far. But I understand the attraction to those that want to take long videos, etc. and they want to store it on something they can remove and plug into a laptop. To me it’s not a deal breaker, but some do think it is.
Curved display. Yeah, it is more of a gimmick because it distorts the image and if the curve is drastic enough, it provides less viewing area.
Iris Scanner. the only really cool thing about an Iris scanner is the potential to be used to gather health related data like blood glucose levels, alcohol and drug intoxication, which are things that it can be used for. The problem is, have they got those types of functionality? If not, then it’s more of a gimmick because you can’t use iris scanner with sunglasses on and in really bright sun light. To unlock a phone? Fingerprint works just fine, plus it’s fast and easy.
Exploding battery. Yeah, even Apple’s had problems with that, and it’s typically the battery mfg. In this case Samsung looks better by pulling the product, issuing a quick response and trying to fix the problem quickly. I wish Tim Cook did that, but he doesn’t.
Taxes? The EU is going after Apple because they have the deepest pockets. I suspect that if they get away with it, and Apple has to pay high taxes in addition to what they currently pay and the US government forces Apple to repatriate their profits back to the US, then Apple’s stock is going to get hit, and if they do this to Apple as well as all of the other US companies like Microsoft, Google, Intel, GE, Cisco, etc. etc. that’s also doing the same thing, watch out for a large stock market crash that won’t recover for a VERY long time. This could essentially bring down the stock market by over taxing these large companies. And what do companies do when they have to increase their profits? Lay people off, cut costs, increase prices, etc. etc.
Something that Android users avoid admitting:
1. OS updating. Android devices have and probably will always have poor OS updating. Imagine spending $900 on one of these Note 7’s only to find it runs a year old OS and Google latest, Nougat, won’t run for another 6 months. Plus, for those that bought a phone that was introduced 4 years ago, you’ll never get Nougat. Apple, on the other hand sells phones that run the latest OS, and they update their OS even on hardware that’s 4 years old.. This is a big deal to people that refuse to buy computers with old OS’s.
2. 64 Bit transition, Officially, Apple now has only 64 Bit smartphones, tablets, laptops and desktops. They have ensured that they only have 64 Bit apps on their App Stores. While there are a small handful of iPhone and iPad users that still have 32 Bit devices, at the end of next year, I think it’s safe to say that 95% of the install base will be 64 Bit devices. This won’t happen for Android for at least another 5 years, especially when they still sell 32 Bit smartphones in the $10 to $100 category.
3. Inconsistent OS experience.
remove the headphone jack has only one reason and that is money!
No, it’s an area that’s difficult to make waterproof. The only way to get an IP88 rating is to put a plug in the jack and that’s just inconvenient. There are IP68 jacks, but not IP88 unless you have a plug, which is a pain in the ass to constantly plug/unplug, etc. and if you lose that plug, you lose the IP88 rating. Plus, it takes up space that can be used for something else. Yeah, it’s a hole, but there is a connector on the inside and with smartphones, every mm is precious.
funny when some apple trolls getting mad. coming with any excuse so everyone knows how awesome there iPhone is.i stopped buying iPhones after i used one week a iPhone 6s plus. was just to much money and always felt it is not to much improvement. hope the next iPhone will bring it back but apple is in a position that they still believe how innovated they are.
I have an iPhone 6+ and for me, it does what I need it to do and I’m still on my 2 year contract. The thing is, if I buy a new one, then I’d probably opt for the Trade Up program that Apple offers and just bite the bullet, get on a monthly subscription type service and then just get a new phone every year and always pay the same monthly rate. It actually works out to be a little better overall deal than buying on a 2 year contract, getting a trade in value and buying a new phone on another 2 year contract. Or just paying the full price and getting a trade in when you want to buy a new one.
That’s the thing. No matter which phone we buy, EVENTUALLY, we’ll want/need an upgrade and it’s just a matter of HOW you want to dive in.
I personally won’t consider any Android phone. I bought an Android tablet and using it is just pure hell. I can’t see myself using any Android phone, I just have seen the user UI and it sucks, plus their OS updating practice is very slimy. So, I’m just a long term Apple user.
Yeah, I would like them to push the envelope a little and I wish I could sit down with their engineering group and give them a piece of my mind because there are areas of improvement. I could give a rip about it being the thinnest on the market, I honestly don’t care what material they use as long as it’s not FUGLY.
Sometimes I think Jony Ive and Tim Cook need to get a reality check as they need to step it up a notch. Sometimes I think Jony Ive is out of his mind. I used to like him, but I think he spends way too much on stupid shit that doesn’t make it a better product. The recharging Magic Mouse is a freaking joke. A cable that makes it unusable when charging? Come on, they just became lazy with that design. I wish they had keyboards that wouldn’t get water damage. They need to see what Lenovo’s doing, they have great feeling keyboards that are spill resistant. The list goes on.
I just hope they start getting their act together or they need to think about some personnel changes.
Yeah. People don’t care about a tax bill of a rich company. They want to know if their phone will set their house on fire, and what other major details Samsung will get wrong next time.
The average customer doesn’t care if Apple is fighting the EU on a tax bill. That’s corporate inside baseball that doesn’t affect the customer in the least.
Samsung, OTOH, has taken a hit on their perception of quality. How many will be wary of buying a Note 7 even when it goes back on sale? Will they be confident Samsung has figured out the problem? So far, they don’t know why the batteries exploded, so who knows how long it will take to figure it out? Will the Note 8 be out by then? The longer it takes, the more damage Samsung will take to its reputation.
Meanwhile the longer the court case drags out in Apple versus EU, the more it will be forgotten, and even fewer people will care even if in the end, Apple has to fork over 13 billion Euro. By the time the case is decided, will there still be a Euro? LOL
Anything that directly affects the customer will have a far more long-lasting effect than something that doesn’t. Samsung has lost some trust that they can build a quality product. That, in the end, will be more painful to the company in the long-run than a tax bill that may never be paid. Samsung still hasn’t paid Apple for its loss in the courts, and how long has that been?
I can just imagine what Killian would say if it was the iPhone that was exploding. He’d surely pronounce it as the death knell for Apple, or at very least the latest in a series of horrible catastrophes that show that Apple just can’t compete anymore. However, the fact that Samsung’s flagship phone is BLOWING UP when being charged, to the point that Samsung has had to issue a RECALL of all of its Note 7 phones, is passed off as Samsung being “responsive to its users’ needs.” Any error or situation with Apple becomes a dramatic fail, yet a worldwide recall of the latest model phone is a mere hiccup. Double standard much?
The thing about phone sales is that they seem to peak very quickly and then retract almost as fast. Historically, the Note haven’t sold that well, and quite honestly, most people don’t use stylus’ with a smartphone, only a VERY small number of people and I’d be willing to bet that they really don’t NEED a stylus, they just want to look cool using one in public because they like the attention. There is really not much room on a 6inch or less screen to write much more than single words in a grocery list, which can be done just as easily and fast as typing them out. It’s not like a large screen tablet where you can write fairly long sentences. I still think it’s faster to type.
In 2 weeks, they sold 2.5 million, which sounds like a lot, but how many iPhones does Apple typically sell in the first weekend? 9 to 12 Million. See a difference? So far, the S7 and S7 Edges only sold about 26 million combined total and that’s after 3 or 4 months.
Despite the hype, Samsung really isn’t selling as much as people think of their high end models.
how many iPhone 6s were sold in the first week?
13 million.
nice
“In 2 weeks, they sold 2.5 million” .. No, they sold just a 1m. They shipped 2.5m.
I’m sorry, I stopped reading this article after the part that you are making an argument that apple had the worst week not Samsung. I think anyone would agree they would rather not have the possibility of their face lit on fire by the faulty battery in their phone then some corporate tax bill.
Apple getting socked for taxes is a very bad day indeed. That’s not chump change we are talking about and who knows what evil lurks with the green eyshade brigade at the IRS? It’s not as inside a baseball story as some would assume. Getting whacked by the EU on taxes could lead to getting whacked on other things. Remember, nation-states can turn on an industry on a dime, politicians even more so. Labeling Apple as Tax Cheats is bad PR. ( Believe me, no one is going to care about nuance of Apple exploiting the “Double Irish and other tax schemes which are, or more the point were, legal. It’s all going to boil down to Apple as tax cheats after the subject is dumb downed for the drooling viewers of cable news.)
Yes, the “fair share” brigade of SJW welfare parasites will start lighting up the comment boards in 3…2…1…