The old adage says, “the enemy of my enemy is my friend” — and if one were looking to give it a modern twist this week, a likely contender would be “the exploding smartphone of my enemy is my friend,” especially if we were to let Apple choose the phrasing.
Because while the Samsung Galaxy Note 7 phones with the batteries that apparently catch fire no matter what have been undeniably bad news all the way around for Samsung — they’ve been a tremendous gift to Apple’s stock price.
According to reports in Reuters this morning, Apple’s share price jumped 2.2 percent yesterday (Oct. 10) — a high point not hit since December of last year. That jump registered as Samsung was announcing that it was temporarily shutting down production on the Note — after reports started emerging that even the replacement phones were catching fire. It was before this morning’s announcement that Samsung will be killing off the Note 7 entirely.
The suspension alone shot Apple’s stock price to $116.59 per share in afternoon trading, making it the day’s largest contributor to gains on the S&P 500.
And Samsung’s self-injury is ill timed — the well-reviewed S7 line of phones managed to beat the newest iPhone to the market by a few weeks and was initially quite well received. Many had thought it could be the starting product in a mobile recovery for Samsung — which has already been experiencing softening numbers in 2016 as the smartphone market begins to reach stable saturation.
Now it looks as though the Note S7 might derail Samsung’s mobile recovery — which is bad news for Samsung, but good news for Apple, especially since Apple’s stock has gained 13 percent since mid-September on optimism about demand for the recently launched iPhone 7.
Samsung is the world’s largest seller of smartphones by volume, with about 23 percent market share, followed by Apple with 12 percent, according to market research firm IDC.