Samsung's recent momentum 'begs an answer from Apple,' Barclays says
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.
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.
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."
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.
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."
Comments
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.
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
I know, let's have MBAs run Apple into the ground.
Originally Posted by AppleInsider
... 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."
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.
Quote:
Originally Posted by MacVicta
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.
Quote:
Originally Posted by macxpress
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.
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!
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.
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.
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!!
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.
If Apple's market share falls it will inevitably mean fewer iPhone sales and lower profits. A cheaper or larger iPhone doesn't have to mean compromising quality, just look at the iPod nano or the iPad mini. Both have been great successes. The iPhone nano will open up new markets and new customers to Apple.
Quote:
Originally Posted by iSteelers
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.