Apple, meanwhile, reignited concerns about demand for its iPhone 5 after reporting flat earnings for the holiday quarter, sending its stock down 14% in the past two days. The stock has also dropped 37% since hitting an all-time high on Sept. 19, just two days before the iPhone 5 launched in stores.
At that time, Samsung had just unleashed an aggressive marketing campaign including a television commercial that poked fun at the iPhone 5. “The next big thing is already here,” the spot said, referring to its Galaxy S III phone.
The ad was part of a more than $200 million U.S. marketing blitz that Samsung launched in 2011 to lampoon Apple, according to Kantar Media. The creative vision for those ads was a former Nike NKE +3.14%executive, Todd Pendleton, who now runs Samsung’s marketing in the U.S. The campaign swayed consumers including Will Hernandez, an Apple iPhone owner who bought a Samsung Galaxy S III smartphone about three months ago after seeing Samsung’s ads.“If you see this stuff on TV enough, it gets you thinking,” said Mr. Hernandez, a 34-year-old resident of Somerville, Mass., who adds that he likes how his Galaxy has a larger screen than the iPhone. “Now, when someone gives me an iPhone to look at a picture, it looks so tiny.”
The marketing onslaught is helping Samsung widen the gap as the market leader. Samsung is estimated to have held 28% of the global smartphone market last year, up from 20% a year earlier, according to IHS iSuppli. Apple’s share, meanwhile, isn’t rising as quickly, moving to 20.5% in 2012 from 19% a year earlier.
Despite Samsung’s advances, Apple generates higher revenue and its profit in the latest quarter was twice as large as Samsung’s. And even after its stock slump, Apple’s market value of $413 billion is nearly double Samsung’s $217 billion market cap.