How is SMG compared to AR?
It all boils down to a single question: can your SMG break the Damage Threshold*? Because SMGs have theoretically higher DPT than ARs, but they run at the risk of being shutdown by DT. Of course, there are many other factors to consider, like the Expertise feat (that benefits SMGs much more than ARs), concentrated fire (AR exclusive), full auto (better synergy with AR than SMG), Spec Ops (ubber strong SMG exclusive feat) etc.
So my answer is this: since SMGs require high dexterity, they have better synergy with throwing/traps/lockpick while ARs have a higher STR requirement, which favors heavy armor, sniper rifles and the Juggernaut feat. In terms of damage, ARs are more guaranteed to break the DT, but high caliber SMGs (8.6 Steel Cat) aren't much behind. In terms of upgrades, the AR has a better selection that includes the same scopes as the sniper rifle. ARs also arguably benefit more from the Rapid Reloader than SMGs since their base AP cost is higher.
*: every bullet must deal more than DT/(1-DR) in order to trigger DR instead of DT. Since DR is percentage it doesn't matter if you're dealing 200 damage with four 50 damage bullets OR a single 200 dmg bullet. Against DT it does matter because the game subtracts the DT from every shot, so you're essentially facing 4 times the enemy's DT.