Apple Inc. (NASDAQ:AAPL) investors should be concerned about Samsung’s earnings announcement made yesterday, January 8. The company announced record breaking earnings of $8.3 billion in the last three months of 2012. Apple, which directly competes with Samsung in almost all of its product lines, may have suffered a cannibalization of its sales.

Apple vs Samsung patent

The major market in which the two companies compete is premium smart phones. Samsung announced that its results were largely due to an outperformance in its mobile division. Sales of the Samsung S3 may have bitten into Apple Inc. (NASDAQ:AAPL) profits.

Running the risk of angering many readers, the Samsung model offers many features that customers want, and the iPhone simply does not have. The S3 features Near Field Communication technology, a quad core processor, and a much larger screen. Apple’s attempt at a larger screen on the iPhone 5 fell below the expectations of  many consumers.

Both Apple Inc. (NASDAQ:AAPL) and Samsung will sell  more smart phones in 2013 than they did in 2012, but Apple Investors are worried about the future of the company. The iPhone 5 manufacturer may have lost out to Samsung on sales for the first time in 2012.

The smart phone market is nowhere near saturated, as incomes increase in China specifically, and across the developing world in general, both Apple Inc. (NASDAQ:AAPL) and Samsung will boost their sales massively, as long as they continue to make what are considered premium smart phones.

Both companies are far ahead of all other competition, now it is only each other that they are really nervous about. And worry they will, Apple Inc. (NASDAQ:AAPL) shares have fallen by a large amount since last September’s high of $700. The company’s shares closed today at $525.31.

Investors who think Apple Inc. (NASDAQ:AAPL) is a good stock to hold for long periods should question the need to closely follow the company’s quarter to quarter sales at all. What’s more important are the wider trends in the smart phone market. If Apple keeps doing what its doing now, it should do alright in the coming years.

But those worries will stick with investors, particularly those looking to buy and sell the stock for a quick gain on the company’s volatility. If Apple Inc. (NASDAQ:AAPL) fails expectations again, this time around, the company’;s stock could be in for a large jump.

Samsung is in a key position to make Apple Inc. (NASDAQ:AAPL) miss those targets. The company’s Galaxy S3 premium phone is the only model making a dent in iPhone purchases, and those sales are responsible for the majority of Apple’s profits. A record quarter from Samsung could mean a meaningful fall in Apple stock.

It is unclear exactly how many phones Samsung sold in the last quarter, and it is unclear when that number will be released. It must be assumed that some proportion of a Samsung sale removes a potential sale from Apple Inc. (NASDAQ:AAPL).

What is more worrying for Apple Inc. (NASDAQ:AAPL) investors, is the rumors that Samsung will release an update for its S3 in the first quarter, or early in the third quarter of 2013. If that happens, a slight fall in Apple sales growth could turn into a second position in the smart phone market.