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KB3001
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Apple have to react
KB3001   7/29/2013 11:39:14 AM
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Hardly surprising given the quality price ratio, Samsung's smartphone beat Apple's hands down. If Apple want to continue with their high margin strategy, they have to come with something new and exciting.

Peter Clarke
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Re: Apple have to react
Peter Clarke   7/29/2013 11:53:18 AM
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You have to bear in mind that Samsung made its $5.2 billion profit on 107 million mobile phones shipped in 2Q13 while Apple made its $4.6 billion profit on just 31.2 million phones shipped in the same period.

So Apple leads in profit per phone shipped.

I make it about $50 Samsung phone and $150 per Apple iPhone.

KB3001
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Re: Apple have to react
KB3001   7/29/2013 12:09:15 PM
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Yes, hence my point about margins. They can't carry on with such high margins strategy with the iphones as Android phones are bridging the quality gap with cheaper products. Apple have to bring something disruptive and start it all over again. They have done it in the past, I hope they can do it again as they seem to be the only company capable of doing so these days :-|

eewiz
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Re: Apple have to react
eewiz   7/29/2013 1:56:03 PM
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"They can't carry on with such high margins strategy with the iphones as Android phones are bridging the quality gap with cheaper products. "

If you look at the PC market, where Apple uses the same strategy.. and rest of them uses low margin strategy.. I can see only Apple making any money

KB3001
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Re: Apple have to react
KB3001   7/29/2013 5:50:05 PM
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"If you look at the PC market, where Apple uses the same strategy.. and rest of them uses low margin strategy.. I can see only Apple making any money"

 

And where is that overall market heading? Stagnation at best. It's a bit like being at the top of a sinking ship, it feels good for a bit but you gonna drown like everybody else ultimately.

eewiz
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Re: Apple have to react
eewiz   7/29/2013 8:45:06 PM
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"And where is that overall market heading? Stagnation at best. It's a bit like being at the top of a sinking ship, it feels good for a bit but you gonna drown like everybody else ultimately."

That is a problem with the market segment. And not with Apple strategy vs Dell Strategy.

And if you look closely, you can see macbook sales increased for past 5 years and Windows PC sales were stagnant /declined 

daleste
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Re: Apple have to react
daleste   7/29/2013 8:57:13 PM
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It is always a bad sign if you are going slower than the market.  Maybe it is Apple's strategy, or maybe the just miss Steve Jobs.  They better watch out for the next three that had very good growth for the year.  They may fall further in a couple of years.

mcgrathdylan
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Re: Apple have to react
mcgrathdylan   7/29/2013 9:02:18 PM
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"Apple dropped to second place, making profits from iPhone sales of about $4.6 billion, according to Strategy Analytics' estimates."


I understand that if you are not going forward you are going backward or at best standing still. And I get Wall Streets expectations of more, more, more. But this is what I don't understand. Apple made $4.6 billion in profit in three months from one product line. Is that seriously a problem?

Peter Clarke
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Re: Apple has to react
Peter Clarke   7/30/2013 6:34:14 AM
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@Dylan

 

You have to consider that financial analysts not only look at the absolute value but also the first and second derivatives against time.


So a big market share is one thing. A shrinking market share is another.

A shrinking market share that is accelerating is yet another.

Ditto revenue and profits

 

However, at $4.6 billion operational profit from iPhone.....it could shrink a long way and for a long time before it becomes a problem.

 

 

mcgrathdylan
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Re: Apple have to react
mcgrathdylan   7/29/2013 8:58:38 PM
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True. Apple has had success capturing a bigger slice of the PC market. And again, as others have said, Apple does it while keeping its margins nice and high. In everything it does. Hence the new headquarters.

wilber_xbox
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Re: Apple have to react
wilber_xbox   7/30/2013 12:24:48 AM
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Apple has been unable to come up with better startegy to cope with fierce competition from Asian companies. Not to worry in short term due to its brand and products but Apple will have to up its game.

mcgrathdylan
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Re: Apple have to react
mcgrathdylan   7/30/2013 12:33:43 AM
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I hear you. And it seems like it's been a while since Apple totally revolutionized a product category. But the company has done it four times. That's not to say it will necessarily do it again. But still, that's a pretty impressive track record. Maybe Apple is going through a lull, or maybe the magic left with Steve Jobs. But either way, Apple is well positioned to continue raking in the profits for years, at least.

anon7643463
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Re: Apple have to react
anon7643463   7/29/2013 6:10:50 PM
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"Apple have to bring something disruptive and start it all over again."

The last couple of years, Apple seems stuck with infrequent incremental upgrades. Maybe the 2013 dought of new stuff is due to the management turmoil and they will get back in the game next year. Maybe.

Talk of new things "in the pipeline" won't cut it anymore. Previews and promises can sustain a brand for only so long and Apple has rode that horse into the ground.

rick merritt
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Re: Apple have to react
rick merritt   7/29/2013 12:45:47 PM
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Excellent point. Apple continues to lead in premium products, it's specialty.

But Samsung leads in volunmes, its specialty.

mcgrathdylan
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Re: Apple have to react
mcgrathdylan   7/29/2013 7:00:32 PM
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I think this was inevitable. We won't be throwing any benefit concerts for Apple anytime soon, but Samsung has a much broader array of offerings and their high-end Galaxy phones are gaining traction (whether you believe they ripped off Apple or not). The iPhone is still a lifestyle choice/status symbol and thus Apple still commands a premium for it.

chanj0
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Re: Apple have to react
chanj0   7/29/2013 12:49:32 PM
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Thanks, Peter. It is very good information. No doubt Samsung is leading the revenue and market share. Apple iPhone still has the highest profit margin among all the other competitors'.


Apple might be worried about the seemingly sliding of market share. However, number of iPhone shipment is still increasing. Management may not be worried too much. After all, Apple has a group of fans that will own Apple products and nothing else. In addition, Apple seems to be playing a hi-end luxury product strategy in the electronic market. The closest parallel is BMW vs KIA. Neither is necessarily better than the other. They just belong to different market segments.

Tom Murphy
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Re: Apple has to react
Tom Murphy   7/29/2013 1:45:34 PM
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No question that Apple is sitting on a pile of cash (much of which is going into building a new headquarters), has a wider profit margin, and commands a premium price for its products from its legion hard-core fans.  That said many iPhone users are not hard-core fans, but are simply looking for the best product at a pricepoint.  As the value/price ratio falls, I would expect a lot of them to shift to Samsung or other lower-cost phones that offer the same or better features, particularly as two-year service contracts expire in the lucrative North American market. Apple investors apparently agree...the stock is trading at about $447 now, up slightly from its 52-week low of $385, but a long way from the $705 they commanded in September 2012.

Can Apple come up with another industry leading product to sustain its once-proud image as the leading industry innovator?  Or is it slowly drifting downward into a heads-on competition with Samsung and other manufacturers, resulting in much tighter margin? 

Frank Eory
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Re: Apple has to react
Frank Eory   7/29/2013 4:35:08 PM
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Speaking of the lucrative North American market, why would you expect the value/price ratio to fall, considering that the price of a subsidized smartphone is always $199 with a new 2-year contract? A Samsung phone is not lower cost than an iPhone to an American consumer with a wireless carrier contract.

KB3001
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Re: Apple has to react
KB3001   7/29/2013 5:46:39 PM
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"A Samsung phone is not lower cost than an iPhone to an American consumer with a wireless carrier contract."

 

It's not the case here in Europe. Samsung phones are cheaper than iPhones (often by 20%). The US mobile market suffers from some unfair market practices IMHO, and US consumers are not getting the best deal possible as a result.

wilber_xbox
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Re: Apple has to react
wilber_xbox   7/30/2013 12:26:38 AM
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Samsung, HTC are much cheaper (more than 20%) as compared to Apple. So, budget conscious consumers go for Andriod phones. Opportunity for Apple to capture booming middle smartphone segment.

RandomJitter
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contrarian analysis
RandomJitter   7/29/2013 12:18:59 PM
http://appleinsider.com/articles/13/07/27/samsung-has-not-dethroned-apple-in-mobile-profits

 

eewiz
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Re: contrarian analysis
eewiz   7/29/2013 1:54:34 PM
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That was quite a detailed analysis by apple insider. These stupid analysts will go to any length to get a few clicks and "make" news. Most amazing part is how they derived 4.6B $ from Apple's report.

rick merritt
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Those big displays help
rick merritt   7/29/2013 12:48:47 PM
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In trips to Asia last year I saw Samsung's big displays making headway in the market for the top-end fashionista phone.

See http://www.eetimes.com/author.asp?section_id=36&doc_id=1266125

I don't know if Sammi can continue to dominate at the top or if Apple will take it back with some iPhone 6 or 7 cool thing, but I suspect the spectrum of what radical new stuff you can do at the high end will narrow over time.

In any case, I think Samsung's strategy of making a broad portfolio will ultimately leave Apple and its one-high-end-model approach in the dust.

kfield
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Profit per unit
kfield   7/30/2013 7:41:39 AM
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It would be interesting to compare the profit per unit for Samsung and Apple. Clearly, Samsung is making it up in volume, which is frankly an impressive feat. Lower cost doesn't always translate to higher profits.

Peter Clarke
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Re: Profit per unit
Peter Clarke   7/30/2013 7:43:37 AM
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As I indicated before

According to Strategy Analytics's numbers in 2Q13 Samsung made about $50 per unit and Apple made about $150 per unit

kfield
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Re: Profit per unit
kfield   7/30/2013 7:44:39 AM
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I wonder if Apple has considered dropping its prices.

prabhakar_deosthali
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Re:
prabhakar_deosthali   7/30/2013 9:56:35 AM
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It looks like inspite of havig more profit per unit , Apple has less total profit compared to Samsung.

This means , in numbers Samsung has taken a much bigger market share compared to that of Apple.

This is definitrely a wake up call for Apple

elctrnx_lyf
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Nokia or Sony
elctrnx_lyf   7/31/2013 1:22:11 PM
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I'm surprised not to find Sony or Nokia in this list. Aren't they doing well enough to be in top 5.

Peter Clarke
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Re: Nokia or Sony
Peter Clarke   8/1/2013 6:05:29 AM
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That's what the tables say.

Remember this is smartphones.

 

 

 



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