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Apple Inc. Message Board

  • beancounter_2003 beancounter_2003 Jun 6, 2013 11:26 AM Flag

    Samsung Beats Apple in U.S. Smartphone Market * Part Two*

    Bits suggests that Samsung may be luring buyers who lose patience before the leaves change color. As it reported, “the South Korean manufacturer has figured out how to make good use of the months between iPhone upgrades, when the current iPhone is getting old and its sales are slowing. Samsung is releasing its new phones during these months. And some Apple customers who are waiting for the next iPhone may be caving in and buying Samsung phones instead.”

    In the past, Apple has predictably introduced a real upgrade prior to each holiday shopping season. But the smartphone market is maturing and if Apple hopes to generate a big sales increase that will enable it to recover market leadership, it will need to go after a big market in which it currently does not compete.

    That’s because the growth opportunities in smartphones are for selling lower-priced models in emerging markets like China and India. To be sure, Apple could sell stripped down versions of the iPhone at lower prices.

    Morgan Stanley’s Kate Huberty believes that Apple will do just that. But a lower price means lower margins. Huberty believes that at the low-end, for example, the difference between charging $399 and $449 ”would be worth as much as $2 billion in profit for Apple.”

    But selling a low-priced product is not what made Apple great. Apple’s greatness came from making products that were better designed than those of competitors and selling those products with great content and apps through superior retailing — and getting entranced consumers to pay a huge price premium.

    If Apple ever gets that winning formula back, then it will be able to repel Samsung’s rising tide. If not, Samsung will continue to prevail in America’s smartphone market.

    Sentiment: Strong Buy

 
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