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Samsung's recent momentum 'begs an answer from Apple,' Barclays says

post #1 of 100
Thread Starter 
Samsung's recent successes are an "issue" for Apple that the company must promptly address by expanding the market for the iPhone, one analyst believes.

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Mockup of iPhone with 4.94-inch screen, created by Marco Arment.


Ben A. Reitzes of Barclays issued a note to investors on Tuesday in which he declared that Samsung's momentum, particularly in the mid-tier market, now "begs an answer from Apple." Reitzes' colleague, SC Bae, expects Samsung to successfully launch both the Galaxy S3 mini and the Galaxy Grand in the coming months, while Apple does not have a response in the smartphone segment.

"To say that the Samsung momentum is an issue for Apple is an understatement," Reitzes said. "Not only is Samsung helping its own cause, but it catalyzes Android as well. As a result, we need to see Apple expand its iPhone market this year in a big way ??and improve its platform in 2013."

He believes Apple can recapture some of the momentum lost to Samsung with three objectives: an expansion of Web services, expanding its distribution, and also launching new products.

Reitzes is optimistic that Apple will launch two new iPhone models this year, along with a follow-up to the iPhone 5. Specifically, he believes a lower-cost iPhone will expand Apple's sales in emerging markets like China, while a larger iPhone would combat devices like the Samsung Galaxy Note series.

He expects that Apple could debut a cheaper iPhone in mid-2013, featuring a plastic casing and cost reductions through less flash memory, a lower megapixel camera, and an older processor. He also sees Apple's larger, so-called "phablet" iPhone launching as soon as October.

iPhone 5


The same analyst already called on Apple earlier this month to release a big-screen iPhone, sometimes referred to as a rumored "iPhone plus." He predicted a 5-inch iPhone would offset some of the average selling price declines Apple would see from a low-cost iPhone for emerging markets.

As for the flagship "iPhone 5S," Reitzes referenced rumors that Apple plans to add fingerprint authentication to its next handset, thanks to its acquisition of security firm AuthenTec for $356 million last year.

"We believe Apple is a platform company and its next great innovations have to come in the form of software and Web/data services," Reitzes wrote. "We believe these services are needed to keep Apple's ecosystem ahead of the pack and to attract and retain more users."

As for long-running rumors of a full-fledged television set from Apple, Reitzes does not believe Apple needs to build its own large-screen panels. Instead, he believes the company should focus on making the existing Apple TV set-top box device even better.

"The time to wait and 'hobby' is over," he said. "2013 has to be the year for the TV strategy or it risks falling behind in our opinion. There are many opportunities for Apple to release a new vision for a TV ecosystem in the coming months, especially as we approach WWDC."
post #2 of 100
Analysts believe Apple is in a race to the bottom to compete. Apple has no momentum huh? They've only out sold Samsung last quarter. Where do they come up with this shit?

Apple has a low cost phone...its called the iPhone 4S and iPhone 4. What's next, Apple pays customers to buy an iPhone? I don't believe Apple can be in every market available, just like Macs aren't. Sure, there's some lost revenue, but that doesn't mean one company wins over another.

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post #3 of 100
Hey Ben, Apple has 70% of the mobile profits and record settings sales of idevices. Shut up. Apple knows what it's doing. It may release a 5" phone as a complement. It probably won't release a crap phone just for the sake of market share.
post #4 of 100
yawn. Another ANALyist who just doesnt get it. Thats not the Apple way.

To me it looks like Apple are doing just fine with the Lions share of all the profits in the market at the moment.

These guys just seem to value based on Market share % alone.

Let Samsung be the "busy fools". Dozens of models, no OS of their own, no eco-system, drastically fragmented OS versions, small margins.

Looks to me like Samsung (and others) are the ones who need to find an answer to Apple's money making machine
post #5 of 100

I know, let's have MBAs run Apple into the ground. 

post #6 of 100
Releasing a larger iPhone would not be meant to combat the Galaxy Note, it's for the Galaxy S series themselves. I see too many of the Apple faithful strictly citing sales of the Note as if to diminish the demand for such products. Every phone that's 4.7 inches or above should fit in the category of devices which the "iPhone Math" would compete with. Only when you include all of those other devices can you really see the size of this market.
post #7 of 100
Originally Posted by AppleInsider View Post

... he declared that Samsung's momentum, particularly in the mid-tier market, now "begs an answer from Apple."

 

Answer? You want an answer?  OK.

 

Apple: "Hey Samsung!  Thanks for crushing all those other Android handset-making no-hoper chumps.  But no, U Can't Touch This."

 

Sent from my iPhone Simulator

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Sent from my iPhone Simulator

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post #8 of 100

Developing markets are important long-term, they need to be cultivated, but if they "believe Apple is a platform company" then surely they realise that the most important markets are the ones where the majority of 3rd party software is made? That's primarily the US and other developed nations. These countries need to be given weighted values. Cheap Android phones sold in the developing world are not competing with iPhones sold in the developed world. There isn't an alternative eco-system being built around them. Nobody will care about ditching them for another phone.

post #9 of 100
"HP and DELL PCs have momentum. Therefore, we see the need for Apple to respond by expanding the Mac market in a big way." <-- Analyst logic

"Apple should pull the plug on the iPhone."

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"Apple should pull the plug on the iPhone."

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post #10 of 100
Quote:
Originally Posted by MacVicta View Post

Releasing a larger iPhone would not be meant to combat the Galaxy Note, it's for the Galaxy S series themselves. I see too many of the Apple faithful strictly citing sales of the Note as if to diminish the demand for such products. Every phone that's 4.7 inches or above should fit in the category of devices which the "iPhone Math" would compete with. Only when you include all of those other devices can you really see the size of this market.

 

You are correct, but the Note is the "market leader" for ginormous phones. Apple will release a 5" as a complement to the existing line but only when it feels it's ready.

 

And to go market share, you have to combine all iDevices for a true reading of OS marketshare. apps made for the iphone will run on the ipad and Touch. It's disingenuous to only count mobile phone market share.

post #11 of 100
Quote:
Originally Posted by macxpress View Post

Apple has a low cost phone...its called the iPhone 4S and iPhone 4. 

An iPhone 4 is still $450 unlocked. 

 

The analysts won't be happy until the average bum sleeping on a street corner inside a cardboard box can afford an iPhone. And let's not forget starving children in Africa. Apple needs to address that vital market also.

 

If market share is all that matters, then why doesn't Apple just release a phone with little or no profit? Apple has more money than anybody else, and they can afford it. 

 

Then almost everybody in the world will be able to buy an iPhone, and Apple's marketshare will grow at an amazing rate, and Apple will have locked in hundreds of millions of more customers into their system.

 

Apple can afford to not make much money for a while. Maybe if Apple posts a few quarters with losses, the stock will rise, just like a few other companies that come to mind.

post #12 of 100

one size doesn't fit all.    Just because my thumb is only so long, shouldn't dictate the screen size.  sounds like the one button mouse argument that Apple loves to wrap themselves around until they finally, and too late, see the light.  Add a larger screen phone, add more battery life, add a phone option to the iPads and keep people in the Apple ecosystem.

post #13 of 100
Does any analyst have an original thought? They are parroting the same tired rhetoric they have been for years. If Apple's profit declines significantly then they talk. As it is I would trust Apple's plan as it has been proven to be successful. Apple has plans for growth, and they will release new products when they are ready. Whether they are the same products these parrots expect, who knows, but they may be even more successful. Quit trying to bet against Apple, and enjoy their brilliance.
post #14 of 100
Quote:
Originally Posted by mickeymantle View Post

one size doesn't fit all.    Just because my thumb is only so long, shouldn't dictate the screen size.  sounds like the one button mouse argument that Apple loves to wrap themselves around until they finally, and too late, see the light.  Add a larger screen phone, add more battery life, add a phone option to the iPads and keep people in the Apple ecosystem.

What one button mouse? The one from 1984? Was that the reason Apple was suffering back in the day, because Microsoft had 2 buttons on their mouse? It all seems so clear in hindsight. Damn you Jobs!
post #15 of 100
It begs an answer? How about this:


Barclay needs to stfu about things they don't understand. Apple's growth and success is unprecedented in human history and they currently have an extremely strong and desirable lineup - with a continued stream of new products coming out of their labs. This has contributed to them being the most profitable company in their markets - and the one that everyone else (including Samsung who lost a $1 B judgment) is eager to copy.
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Gatorguy 5/31/13
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post #16 of 100

Maybe Tiffiany should make and sell cheap jewelry, how about BMW and Mercedes make some kind of Yugo, or maybe Rollex should look at getting into the timex business as well. 

 

Hey look I am now an analysis and figure how to make premium products company into nickle and dime stores for the masses.

post #17 of 100
The issue is not Apple's profits, which are doing quite well. The long term issue is the market size for each ecosystem. If Android eventually takes the vast majority of the market, that will effect Apple in many ways, all of them bad. They cannot just sit on their laurels and hope for the best (not that I think they are).
post #18 of 100
Quote:
Originally Posted by "Apple 
[" url="/t/156063/samsungs-recent-momentum-begs-an-answer-from-apple-barclays-says#post_2280228"]An iPhone 4 is still $450 unlocked. 

The analysts won't be happy until the average bum sleeping on a street corner inside a cardboard box can afford an iPhone. And let's not forget starving children in Africa. Apple needs to address that vital market also.

If market share is all that matters, then why doesn't Apple just release a phone with little or no profit? Apple has more money than anybody else, and they can afford it. 

Then almost everybody in the world will be able to buy an iPhone, and Apple's marketshare will grow at an amazing rate, and Apple will have locked in hundreds of millions of more customers into their system.

Apple can afford to not make much money for a while. Maybe if Apple posts a few quarters with losses, the stock will rise, just like a few other companies that come to mind.

Nothing generates profit like selling phones at cost to people who don't or can't afford to buy many apps. It's full proof. They will be repeat customers for years upgrading to new low profit/low cost phones because they will not want to lose all of their free apps. Think of the market share. Brilliant!!
post #19 of 100
No matter what the news media says, Apple doesn't really seem to be be going out of business in the near future. There may be a problem in terms of growth percentage due to the size, but Apple has a steady revenue income and plenty of cash. I'd say it is in no worse of a position of going out of business than Microsoft or any other mature tech company. Apple isn't Samsung. The companies are completely different, so why should they be compared against one another. Apple isn't divided into divisions like Samsung is. Samsung has many divisions to add and detract revenue from their mobile division. If it's Samsung's philosophy to mainly go after market share then good for them. Why should Apple have to have the same philosophy? Both companies can be financially successful if they execute well enough.

To me, it would be like saying Hyundai's sales philosophy is right but Porsche's is wrong. That's not true. Both companies can be financially successful. Samsung needs to prove it can hold consumers' interest for a few years. It will likely run into the same innovation problems Apple is claimed to have. Apple products need to be popular with consumers because that's where the money comes from. Apple not being popular with investors is a completely different story. I see these two things don't necessarily go hand in hand as I once thought they did.
post #20 of 100
Quote:
Originally Posted by iSteelers View Post


Nothing generates profit like selling phones at cost to people who don't or can't afford to buy many apps. It's full proof. They will be repeat customers for years upgrading to new low profit/low cost phones because they will not want to lose all of their free apps. Think of the market share. Brilliant!!

Yeah, just look at Android, and how their wonderful eco-system is thriving. Do the douchebag analysts even realize that many Android phones are not even being used as smart phones, but rather as feature phones? Who needs customers that won't even spend a penny and might not even have a credit card to their name?

 

The fact remains that Apple has the strongest eco-system and the best customers on the planet. One Apple customer is probably worth at least 15 Android customers living in some third world country someplace, if not more.

post #21 of 100
Quote:
Originally Posted by Captain J View Post

The issue is not Apple's profits, which are doing quite well. The long term issue is the market size for each ecosystem. If Android eventually takes the vast majority of the market, that will effect Apple in many ways, all of them bad. They cannot just sit on their laurels and hope for the best (not that I think they are).

But u have to include the touch and iPad in that ecosystem. By far, the iPad is crushing competitors in the tablet space.
post #22 of 100

The strange thing about saying that Apple "doesn't have a response" to the the Galaxy IIIS Mini is that the model is Samsung's smaller (4") phone with outdated internals (3G only). Essentially, an iPhone 4 with a poorer quality/low res screen, plastic construction, lesser camera, etc.)

 

It's one thing to say Apple should chase after Samsung's big phablet devices (although that's clearly debatable). It's another to say that Apple needs to copy Samsung's inferior, critically panned new copy of the 2010 iPhone 4. Read any review of the IIS Mini and even the most exuberant fans of Android will tell you it's not the droid you are looking for. So why does Apple need to copy this copy?

post #23 of 100
At the rate Samsung is going they won't have encore to run to. They are throwing everything but the proverbial kitchen sink onto the market, saturating it and in effect hurting themselves for the future.
post #24 of 100
Quote:
Originally Posted by iSteelers View Post

Does any analyst have an original thought? They are parroting the same tired rhetoric they have been for years. If Apple's profit declines significantly then they talk. As it is I would trust Apple's plan as it has been proven to be successful. Apple has plans for growth, and they will release new products when they are ready. Whether they are the same products these parrots expect, who knows, but they may be even more successful. Quit trying to bet against Apple, and enjoy their brilliance.

You got it right....Apple has a history of releasing great products because they put so much thought and development into the overall product and how users interact with that product. This creates a great user experience with Apple products. It is not just about specs or numbers but how it all works together.....the whole ecosystem as well. Apple puts out a unmatched blend of software and hardware to make great products. When the timing and product is ready I can see them making a larger phone (not much larger) but only when it can all be tied togther to make it a great product.....not just a rush to keep up with competitors.

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post #25 of 100
Only a financial guy would give this comment. Samsung is faking the lead by using the old RIM pricing model

They produce bad products, eventually their bubble will burst
post #26 of 100
I'm gonna go out on a limb here and say that Apple doesn't give a flying fig what stock analysts think, want or demand.
post #27 of 100
Quote:
Originally Posted by Takeo View Post

I'm gonna go out on a limb here and say that Apple doesn't give a flying fig what stock analysts think, want or demand.

True, but AAPL shareholders care - every time these analysts open their mouths, the stock falls some more. Even when their ramblings are consistently shown to be nonsense later, the damage has already been done. Everyone repeats these "Apple is doomed" stories. No one repeats the "never mind" stories.
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post #28 of 100

Whenever I hear this crap I feel like I'm being trolled by Android-lovers. Rather than advising their clients about what Apple should do or must do, these analysts should stick to advising their clients on what they should or must do with respect to shares of Apple: buy, sell, hold, short, etc.

 

Also, if they're so bullish on Samesung, can't they advise clients to purchase those shares on overseas exchanges? 

For your sake, I hope you're right.
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post #29 of 100

Thank God none of you are running the company!  I don't want AAPL to go any lower.  This analyst, as well as all the others, are absolutely right that Apple needs to diversify their iPhone line.  It won't dilute the value that the "regular" iPhone offers, but offering models of different sizes or specifications will certainly allow a new set of consumers to find value in the iPhone.  When more consumers see value, Apple sells even more phones!

 

I wish these articles would just eliminate the word "Samsung."  As soon as that name comes into the picture, you guys turn off your rationality and go into disagreement mode.

post #30 of 100
Quote:
Originally Posted by wakefinance View Post

Thank God none of you are running the company!  I don't want AAPL to go any lower.  This analyst, as well as all the others, are absolutely right that Apple needs to diversify their iPhone line.  It won't dilute the value that the "regular" iPhone offers, but offering models of different sizes or specifications will certainly allow a new set of consumers to find value in the iPhone.  When more consumers see value, Apple sells even more phones!

I wish these articles would just eliminate the word "Samsung."  As soon as that name comes into the picture, you guys turn off your rationality and go into disagreement mode.

Apple will never please everyone, so why try? Apple doesn't need cheap phones. If there is money to be made with a 5" phone, no doubt it is investigating. Apple isn't reading blogs to find out what to do. It knows what to do considering it had the most profitable calendar year in human history.
post #31 of 100
Here's a thought. Add phone service to the iPad mini. That'll blow Samsung out of the water. Talk about a Phablet!
post #32 of 100
Actually it was Apple's momentum that begged an answer from Samsung. Samsung finally came up with some worthy devices. But that doesn't mean Apple has to "respond". I think a more appropriate analysis would be %u2013 Where is Apple's next gamechanger that Samsung will need to answer anew. Or what is Samsung's gamechanger to beg an answer from Apple. Because while their new phones are great, none of Samsung's phones are "gamechangers" the way the iPhone was.
post #33 of 100
Lot of opportunities for Apple yet seems as though Apple is being overly cautious in it approach. Time is important Yet actually perfecting a product or upgrade is more important. Hopefully Apple starts to give the customer more choice with 2 sizes of IPhones. However the real differentiator be their IOS and ecosystem
post #34 of 100
Apple doesn't have to do squat with Samsung. They have better things to do like continue making kick-a$$ products, and making all the money in the industry.

Analysts like to think it's some sort of pi$$ing contest with the two. What really irks me is that they seem to think they know tech to tell Apple how to run their business. Idiots.
post #35 of 100
Quote:
Originally Posted by jungmark View Post


Apple will never please everyone, so why try? Apple doesn't need cheap phones. If there is money to be made with a 5" phone, no doubt it is investigating. Apple isn't reading blogs to find out what to do. It knows what to do considering it had the most profitable calendar year in human history.

No company can please everybody, but does the idea that Apple can never capture the entire market preclude it from growing further?  If humans only did things that worked 100% of the time, we would still be in the stone age.

post #36 of 100
Quote:
Originally Posted by wakefinance View Post

No company can please everybody, but does the idea that Apple can never capture the entire market preclude it from growing further?  If humans only did things that worked 100% of the time, we would still be in the stone age.

Last time I checked, Apple IS growing. However, they're growing by continuing to offer industry-leading products that work well together and offer a great user experience.

They are not doing it by growing share with cut-rate products -- nor should they.
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post #37 of 100
Anyone remember a time when Apple had NO iDevices, only a tiny percentage of the PC desktop market, and still was an extremely successful company?

No, nothing is "begging for an answer" from Apple. Apple doesn't "answer". It designs and releases the products it wants to release, and thats proven insnaely successful for them thus far. The company would have spiralled into a black hole long ago if it listened to any advice from these analysts.
post #38 of 100
Quote:
Originally Posted by Captain J View Post

The issue is not Apple's profits, which are doing quite well. The long term issue is the market size for each ecosystem. If Android eventually takes the vast majority of the market, that will effect Apple in many ways, all of them bad. They cannot just sit on their laurels and hope for the best (not that I think they are).

 

If Android was a consistent, unified OS- then you may have a point. But as it stands now, because of the fragmentation of Android (a thousands different skins and versions) than your point is less relevant. It's used by companies who all have different agendas as to the direction and functionality of the OS, and all want to differentiate it to their benefit. Most consumers DONT see iOS vs Android. They see iPhones vs a million other types of phones, each phone with an OS that looks different. 

post #39 of 100
Quote:
Originally Posted by wakefinance View Post

No company can please everybody, but does the idea that Apple can never capture the entire market preclude it from growing further?  If humans only did things that worked 100% of the time, we would still be in the stone age.

I don't understand your analogy. Apple has never did things that only worked 100% of the time. All the iDevices were panned when they were announced.

Apple cares about making the best products with the most profit. It doesn't play the market share game. It plays the profit share game.

Market share doesn't pay the bills. Look at HP and Dell.
post #40 of 100
Quote:
Originally Posted by jragosta View Post


Last time I checked, Apple IS growing. However, they're growing by continuing to offer industry-leading products that work well together and offer a great user experience.

They are not doing it by growing share with cut-rate products -- nor should they.

Who said anything about cut-rate products?  Anything Apple releases will still be of high quality, but it will be in a market segment that they currently don't compete in, like larger phones for example.

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