End of Galaxy Note 7 predicted to help Apple, but 'big beneficiaries' could be other Android device
While investment firm Wells Fargo Securities believes Apple and its newly released iPhone 7 Plus will benefit from the discontinuation of the dangerous Galaxy Note 7, it also believes that the greatest potential for gains could be non-Samsung Android handsets.
Analyst Maynard Um issued a note to investors on Tuesday, acknowledging that shares of AAPL had added an incremental $14 billion in market cap at the company's intraday peak. He said that value embeds more than 3 million incremental iPhone 7 Plus units to the company's sales.
Shares of AAPL have been trading higher in the wake of Samsung's announcement that it will discontinue the Galaxy Note 7 after serious flaws led to dangerous fires from units being charged. The incident first began to gain traction just before Apple announced its competing phablet flagship device, the iPhone 7 Plus.
"While we have little doubt that this issue, which we candidly did not anticipate, will help Apple, we think other Android vendors with 5.7-inch phones could see a bigger benefit if Android users prefer to stick with Android (just as iPhone users prefer to stick with the Apple ecosystem)," Um wrote. "LG, Kyocera, and Microsoft have 5.7-inch phones at U.S. carriers (as well as the older Galaxy note). The list of 5.5-inch Android phones (same as the iPhone 7 Plus screen size) is larger and includes Google, Motorola (Lenovo), and Samsung."
In the U.S., carriers are allowing trade-ins of the Galaxy Note 7 for any other device. Refunds are being offered if the user takes a lower-priced phone, while more expensive handsets require the customer to pay the difference.
"Samsung will have to face an uphill reputational climb, though it is unclear this will be short-lived or long-term," Um said. "We see some moderate risk that Samsung will have to be more promotional around its existing and newer phone models, which could have some impact on Apple as well.
For Apple's current holiday quarter, Um has forecast sales of 77 million iPhones --?a number he said was "once considered way too high by a number of investors." But in the wake of the Samsung scandal, some estimates have risen "materially above" the 77 million mark, he said.
Despite the fact that Um sees Apple selling a record number of iPhones this quarter, Wells Fargo Securities has still maintained a neutral "market perform" rating on shares of the company. Its valuation range is from $105 to $120 per share, with Apple already trading north of $116 as of Tuesday afternoon.
Analyst Maynard Um issued a note to investors on Tuesday, acknowledging that shares of AAPL had added an incremental $14 billion in market cap at the company's intraday peak. He said that value embeds more than 3 million incremental iPhone 7 Plus units to the company's sales.
Shares of AAPL have been trading higher in the wake of Samsung's announcement that it will discontinue the Galaxy Note 7 after serious flaws led to dangerous fires from units being charged. The incident first began to gain traction just before Apple announced its competing phablet flagship device, the iPhone 7 Plus.
"While we have little doubt that this issue, which we candidly did not anticipate, will help Apple, we think other Android vendors with 5.7-inch phones could see a bigger benefit if Android users prefer to stick with Android (just as iPhone users prefer to stick with the Apple ecosystem)," Um wrote. "LG, Kyocera, and Microsoft have 5.7-inch phones at U.S. carriers (as well as the older Galaxy note). The list of 5.5-inch Android phones (same as the iPhone 7 Plus screen size) is larger and includes Google, Motorola (Lenovo), and Samsung."
In the U.S., carriers are allowing trade-ins of the Galaxy Note 7 for any other device. Refunds are being offered if the user takes a lower-priced phone, while more expensive handsets require the customer to pay the difference.
"Samsung will have to face an uphill reputational climb, though it is unclear this will be short-lived or long-term," Um said. "We see some moderate risk that Samsung will have to be more promotional around its existing and newer phone models, which could have some impact on Apple as well.
For Apple's current holiday quarter, Um has forecast sales of 77 million iPhones --?a number he said was "once considered way too high by a number of investors." But in the wake of the Samsung scandal, some estimates have risen "materially above" the 77 million mark, he said.
Despite the fact that Um sees Apple selling a record number of iPhones this quarter, Wells Fargo Securities has still maintained a neutral "market perform" rating on shares of the company. Its valuation range is from $105 to $120 per share, with Apple already trading north of $116 as of Tuesday afternoon.
Comments
(... not, "I'm going to switch to iPhone")
Samsung met its karma. I hope Maynard and the others do as well.
This is the definition of 'backfire' (pun intended).
Edit: No, wait, wait maybe I was wrong, an excellent replacement would be the Amazon Fire phone ...
Samsung flagships are expensive, and people who buy them are doing so for perceived value Samsung offers over all the other umpteen bargain basement Android devices out there.
The Pixel is also priced like a high-end phone, but Google has no track record with consumers for making excellent devices and backing them with world class service. Samsung, while not up to the level of Apple, is still superior to all Android vendors.
So anyone looking to drop $800 on a new phone, and has any concerns about quality and support, will likely look to the iPhone 7.
The others, that wanted S-pen specific features, will keep using older notes or other galaxy devices, too. They have no other choice.
Those that wanted the Note because it had the best screen and best camera won't obvious buy an iPhone as well.
For the users that feel that they lost trust in Samsung, some will go Android, some will go iOS.
Some people may undoubtedly change over to Apple, but those with investments of time or money won't lightly do so - I assume.
If you think they are a troll just ignore or if they have a point come with a reason why they are wrong. or maybe a witty response.
I come here and learn a lot from the reasonable arguments made here (i admit i sometimes get involved with the unreasonable ones.. me bad )
Anyway, on topic. People that chose the Note7 did it because:
- They wanted the S-pen;
- They wanted an Android device with great specifications;
- They wanted the phone with the best camera and screen;
- They wanted the phone with the highest "speczzzz" (moah cores, moah pixels);
- Design.
If they wanted one because of that s-pen, another samsung device seems the obvious option (note 5, for now?). If they did it because of the best camera and screen, the s7 also is their next most obvious option. Same for the similar design.Those that specifically wanted a great Android phone with great specifications, will obviously chose another Android device. Those that did it because of their bad interpretation of specifications, will also chose another Android device.
The only people that will jump from the note to iOS are those that are not attached to a specific ecosystem, and base their decisions on other metrics, like status and support. All other cases seem to not benefit Apple, unless the others that have the obvious alternative on the S7 edge, will specifically want to show the middle finger to Samsung. In my opinion, that would automatically mean a gazillion of Apple sales if they didn't screw their users so much, for so long. (Pathetic base storage, pathetic camera hardware, bad multitasking capabilities) until 2016, the year where Apple blew everyone else out of the water on almost every metric.
a certain percentage will move to the iPhone 7, or +. You really can't assume that the majority will leave Android after a vendors blunder.
What does the number of posts have to do with what he says? At some time, you didn't have any more. Should we have ignored what you said because of that? How many posts does a person need before they're worth responding to?
what he said is true. The last sentence is correct. Some will stay with Android, and some will go iOS. Why is that hard to believe?
great specs? Well, yeah, for Android.
best camera and screen? Sorry, but no to both of those. Just look at the just published review of the iPhone 7+ about the screen and camera from Anandtech, and the Displaymate review of the screen.
highest speczzz, true. Samsung usually hits the bullet points on specs that don't function well, or at all.
the design is pretty nice though. But according to Android Nation, it breaks much more easily than the iPhone 7+.
and again, the pen. I know two people who have had Notes, neither used the pen that much after the first couple of months. I'm sure there are some who are devoted to it. It's almost as easy using a pen on my 6+. But I need to carry it in my pocket. Otherwise it's about as easy as using the circular thing where some of those functions reside on the Note.
at any rate, the Note is the third best selling flagship phone for Samsung. The first is the plain S7, the second is the Edge.
we really don't know any of this. At any rate, the quarter we're in now, the last calender quarter of 2016, will tell us a lot about this. Too bad we won't know anything substantial until late January.