What a difference three months can make. At the end of August, Apple Inc seemed on top of the world. Fresh off a resounding $1.05 billion U.S. legal victory over arch-foe Samsung Electronics Co Ltd, the company was gearing up to launch the fifth iteration of its iconic iPhone. Just a week prior, its market value had surpassed Microsoft Corp's and it became the most valuable technology company in history.
That was then. Since winning a landmark U.S. patent infringement case in August, its stock has dived 18 percent, wiping $108 billion from its value. But the shares of defeated party Samsung have surged, rising 16 percent.
The dramatic reversal has sparked raging market speculation.
Some pundits say concerns are growing about the seemingly inexorable advance of Google Inc's Android, the rival software championed by Samsung. Others say fears about higher capital gains taxes have prompted investors made rich by Apple's stock-price growth to sell.
But it is the Apple-Samsung rivalry that defines a global mobile device industry with a growing list of struggling players. Together, the two mobile juggernauts account for more than 1 in 2 smartphones sold globally.
Analysts say Samsung is beginning to shed its aura as a "fast follower" and becoming a serious innovator, while Apple has failed to deliver on a truly seminal product in years - the oft-rumored Apple TV remains a well-honed rumour.
"Apple's actions have started to appear as if innovation is slowing and they're defending turf with a zero-sum market view rather than continuing to innovate as a world-beating leader," said Tony Nash, managing director at IHS, a business information provider.
The clash of the gadget titans underscores a broader battle between Apple and Google's increasingly popular Android mobile software, now installed on about two out of every three smartphones sold.
But some Asian analysts also point to Samsung's very different business model as helping it get a leg up on Apple.
The iPad maker's outsourcing structure provides fatter margins, but cedes some control to an army of suppliers, while Samsung's competitiveness is driven by keeping most of its manufacturing in-house.
And while Apple focuses on a few high-end mobile devices, Samsung's product breadth helps it scoop up new, less affluent users who can then be driven towards higher-margin devices, such as the phone-tablet combo Galaxy Note.
"In Asia, Samsung is still in the stronger growth position when it comes to smartphones - bringing large-screen models to the masses, re-introducing the pen with its Galaxy Note series and also, at the lower-end, with its entry-level Galaxy Y devices driving emerging markets like Indonesia and India," said Melissa Chau, Singapore-based research manager at IDC.
No one is writing off Apple, still the world's most valuable listed company and expected to chalk up 27 percent revenue growth to almost $200 billion in fiscal 2013 - about level with Samsung.
"There have certainly been missteps at Apple ... but if we look at what's been achieved in the year since (co-founder Steve) Job's death, there are things that keep their competitors quaking in their boots," said Rachel Lashford, Managing Director, Mobile and APAC, at consultancy Canalys in Singapore.
Among its strengths, she cited unprecedented demand around new launches, the expansion of content on iTunes and the Apps Store, a possible move to product updates twice a year, efforts to improve parts supply and manufacturing, the dogged legal pursuit of Samsung and cash reserves of more than $120 billion.
Its gross margins of above 40 percent are double Samsung's.
But the South Korean company is now beginning to generate some buzz with recent improvements in its line-up. This week, news emerged that it is likely accelerating the launch of its next-generation flagship Galaxy smartphone - which sports an unbreakable screen.
Codenamed "Project J," the Galaxy S IV could be released as early as March or April, according to leading industry analysts and tech blogs. With smartphones increasingly looking alike, an unbreakable screen could be a big selling point for the Galaxy over the iPhone.
"Samsung's richer product line-up and vertically integrated supply structure are among its strongest advantages over Apple's simpler product range and strength in software," said Kim Young-chan, an analyst at Shinhan Investment Corp in Seoul.
Samsung is estimated to have shipped close to 56 million smartphones in July-September, more than double the number of iPhones, and analysts expect it to sell around 30 million more smartphones than Apple this quarter.
The South Korean firm's shift comes as its Cupertino, California-based rival suffered from some missteps in its iPhone 5 mapping app, supply constraints that have prompted delivery delays and allegations of employee abuse at supplier plants in China.
Charles Moon, Singapore-based principal analyst at Informa Telecoms & Media, a research consultancy, sees these as a sign Apple is adjusting to maturing markets.
"A completely offensive strategy with uncontested gains are a thing of the past," he said. "Apple is not positioned well at the moment following a couple of disappointing quarters and continued negative news flow.
"Regardless of what happens (in the court ruling), Samsung and Android are winning where it counts - outside the courtroom - and this is likely to go on unless Apple can continue to reinvent itself. Very difficult, considering how far they've come, but not impossible. They've done it before," he added.
In the key battleground of China - the world's No. 1 cellphone market - Samsung and Android devices in general appear to be making headway against pricier Apple gadgets.
Third-quarter data shows Apple slid to sixth place in China, its largest market after the United States. Samsung kept top slot, according to research firm IDC, which estimated the Chinese smartphone market at a record of more than 60 million in July-September.
IDC analysts forecast a rebound for Apple with this month's iPhone 5 launch there, but it has so far failed to crack the country's largest carrier by far, China Mobile Ltd.
Apple's "loss of market share and of opportunities like a stalled China Mobile agreement are notable and, potentially, show some strengths of an integrated hardware-led model of players like Samsung against the comprehensive hardware-software ecosystem model of Apple," said Nash at IHS.
"This competition is far from over and my hope is that it forces very strong and continued innovation from Apple, Samsung and others."