Samsung's flagship smartphone, the Galaxy S III, sold approximately 15 million units in the holiday quarter compared to approximately 50 million iPhone units. In the midst of this tech revolution, the only way for Apple to fail is to have a competitor rise up. Beyond smartphones, tablets are even worse for Android. According to Chitika Insights, the iPad commands 87% of tablet web traffic in the U.S. and Canada as of December 27th. Android is showing no ability to cut into Apple's profit growth trend. There may be months when Android market share shows gains over iOS but those market share gains have yet to translate into profit share gains.
I'm long apple and have profited handsomely and I hear you but here's the rub. I have two teenage daughters. When asked, every single one their friends and themselves would choose the Galaxy III over the iphone. Apple is losing their coolness factor because most of their crowd gets the iphone as a hand me down from mom and dad - definately not cool in their eyes. They hate the laptops and only want the new Microsoft Surface. I realize the market for the "uncool" generation like me is huge but where will the growth continue to come from?
So the question for me is not is Apple a great company - but rather - can it continue to be a great company? Is it going to end up in the bar next to RIMM listening to Springsteen belt out "Glory Days" or once again, rise up and innovate.
One of the great mysteries of the past few months is how this notion that Apple is done and Samsung is taking over the world became the dominant narrative. Especially considering that anecdotal evidence shows that Samsung is getting crushed in US this quarter and most of the talking heads spouting this nonsense are from the US. It is all very strange and it will be interesting to see if the narrative changes after Apple posts huge earnings.