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  •  Sorry but you have it completely backwards. (2+ / 0-)
    Recommended by:
    Caipirinha, quill

    At this point Apple's business model is completely reliant on its previous customers upgrading their Iphones every year. Last quarter was weak because not enough people switched to Iphone 5. This is also why they don't spend a lot on advertising. Samsung has a very sound business model and they are doing a pretty good job of targeting emerging markets. There is no shame in buying cheaper smart phones if you can't afford high end phones like Iphone 5. As I mentioned earlier, Samsung is doing very well with young people in the west and everyone in the emerging markets because of the price range and the variety they offer to the customers.

    •  in fact, doing better than Apple with young people (0+ / 0-)

      A recent market study found that kids are now more interested in Galaxy S3 than iPhone. Meanwhile Apple is becoming more favored by older consumers (GenX and Boomers). That's not necessarily bad for Apple as those older generations have many more consumers switching to smartphones. But, as a hip trend setter, Apple may have lost some of it's magic. That's very bad for a company that depends on image as much as Apple does. I'd speculate that is one reason why Apple is being downgraded by analysts, despite massive profitability.

      "I don't cry over milk spilled under bridges. I go make lemonade" - Bucky Katt

      by quill on Sat Jan 26, 2013 at 02:27:12 PM PST

      [ Parent ]

      •  Untrue. It says here: (1+ / 0-)
        Recommended by:
        koNko

        http://www.forbes.com/...

        And while 67% of affluent teens still say they intend to purchase an iPhone as their next upgrade, reports Piper Jaffray, Samsung pulls in second with a strong 22%.
        The numbers simply don't support this traditional media narrative that youth suddenly don't like Apple.  Even in 2012, Apple products topped the most-wanted lists of kids and teens in the US.
        •  true, but the rest of the quote says: (0+ / 0-)
          The signs that youngest smartphone audience has cooled on Apple have been steadily accumulating over the past few months. Apple, for instance, dropped several spots or remained flat on several teen brand opinion polls, including marketing agency’s Smarty Pants’ Young Love survey. And while 67% of affluent teens still say they intend to purchase an iPhone as their next upgrade, reports Piper Jaffray, Samsung pulls in second with a strong 22%. Perhaps more importantly is the fact that it was unthinkable a mere 12 months ago that any teen would prefer any phone to an iPhone if given the option.
          I definitely remembered that survey wrong, but as the quote above suggests, Apple has been so dominant for so long with American teens that it's a significant development that there is ANY interest by "trendsetters" in another brand. Investors look at trends too, and this is a trend. That and the US market over saturation problem combined with the relative lack of enthusiasm for Apple in non-US markets, where Android based products dominate.

          "I don't cry over milk spilled under bridges. I go make lemonade" - Bucky Katt

          by quill on Sat Jan 26, 2013 at 06:33:28 PM PST

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          •  To me the rest of the quote was more trying to (0+ / 0-)

            fit some "Apple in disarray" narrative despite what the numbers really say.  It's like in 2006 and 2008 with all the "Democrats in disarray" narratives floating around the mainstream media.

            Right now the US market is not saturated.  Only 50% of the US market owns smart phones, and there is an untapped market of a billion potential smart phone owners in the rest of the world.  Plenty of growth going forward for Apple and Samsung.  And meanwhile, Apple will continue releasing new products that completely revolutionize the landscape, as opposed to having to fight it out in just the smart phone market.

    •  Sorry, but Apple didn't have a weak quarter. It (0+ / 0-)

      was the strongest quarter in the history of Apple.  In fact, the only thing you can say is that they failed to meet customer demand due to lack of components in the supply chain.  But IMHO, that's a good problem to have -- long lines of customers wanting your products.  Apple's monstrous growth numbers are not due just to repeat sales.  In no way do the numbers or the surveys support that.  Furthermore, Apple leads this sector in innovation, and their best days are still ahead of them.  Apple isn't resting on their laurels.

    •  Sorry but you're mistaken about some things (1+ / 0-)
      Recommended by:
      Sharon Wraight

      You are right that Apple and Samsung have different business models; Apple has a narrow product line focused on the high end of the market while Samsung covers the range and multiple platforms. Samsung has been in the phone business much longer than Apple and has a much larger and diverse user base of phone customers than Apple. And that's not going to change much. None of this is news except when the MSM or tech bloggers need a filler story.

      What has changed is the trajectory of both in the smartphone market, where Apple penetration of developed markets is reaching the saturation point and so their rate of growth is slowing, while Samsung which was behind Apple by a significant margin continues to gain smartphone share, but not, apparently, at Apple expense since both continue to have increasing unit sales, dominant positions and dominant profits.

      In fact, in the US market, Apple is at an all time high with 51% market share with much of the growth coming from first time smarphone buyers and defectors from Android.

      Outside the US Apple has lower market share total and against Samsung but is gaining market. For example, China is now Apple's No. 2 market and they sold more than 2 million iPhone 5 in the first 3 days it was on sale, a pretty phenomenal record considering the price verses purchasing power of the customers, and also given the fact Apple does NOT sell through China Mobile which services approx. 60% Chinese subscribers, so they have a long way to go.

      Also, Apple app and content sales continue to outpace Android by a very wide margin despite Samsung's gain in share and iOS device internet traffic (iPhone and iPad) has an even wider margin.

      Regardless, this will not continue indefinitely as Android gains global market share converting feature phone uses to the platform, so it is inevitable that measures of "Android vs Apple" will show a decline in Apple share even as they both continue to enjoy expansion of the market.

      So your conclusion that Apple is stuck in a rut of replacement sales is not borne out by facts and really kind of a nonsense projection of the type of problem faced by Noika when it ran out of road, and something Samsung is more likely to face than Apple given the huge, vertical nature of it's organization.

      I think  question facing Apple is whether they should broaden their product line with lower priced models to win a greater share. If we take iPad mini as a clue, I think the answer is yes, but I don't think that means Apple will ever go "cheap" and try to cover every market segment as Samsung has because that would dilute the Apple brand and not produce profits.

      And if we look at Apple's other blockbuster consumer product, iPod, we can see they know how to position a range of models and build franchise, they later cannibalize themselves.

      Wall Street analysts always over-hype hot companies because that how they sell to investors, and punish and fluctuations so they can deflate share prices to set-up the next round.

      But the reality is Apple had a strong year and growth in revenue with an unchanged margin (13.1%) YoY. That may not please investment analysts that want continually increasing profits and stock value, but in real terms it's good performance.

      What about my Daughter's future?

      by koNko on Sat Jan 26, 2013 at 09:54:42 PM PST

      [ Parent ]

    •  Coda (1+ / 0-)
      Recommended by:
      Sharon Wraight

      Perhaps this article in The Economist and the related comments state some of the issues better than I did.

      What about my Daughter's future?

      by koNko on Sun Jan 27, 2013 at 04:45:00 AM PST

      [ Parent ]

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