Is Apple losing grip on mobile market?
ttendee Cade Madison takes a video of the LG Electronics Inc. 3D video wall using 3D glasses over his Apple Inc. iPad during the 2013 Consumer Electronics Show in Las Vegas, Nevada, U.S., on Wednesday, Jan. 9, 2013. The 2013 CES trade show, which runs until Jan. 11, is the world's largest annual innovation event that offers an array of entrepreneur focused exhibits, events and conference sessions for technology entrepreneurs. Photographer: Andrew Harrer/Bloomberg *** Local Caption *** Cade Madison Photo: Andrew Harrer, Bloomberg
Apple, the largest tech company in the world, will report its earnings for the previous quarter Wednesday as competitors like Samsung and Google fight - with success - to dislodge Apple as the mobile device king.
Since 2003, Apple's profit has jumped more than 10 percent in all quarters except one. Yet an analysis by Bloomberg estimates that the company's net income for the latest quarter will fall 2 percent to $12.8 billion ($13.48 per share). Apple has exceeded analysts' estimates for earnings in all but three quarters since 2006.
If the predictions are accurate, CEO Tim Cook will find himself in the hot seat as he struggles to crawl out from the shadow of the company's late founder, Steve Jobs. Since September, the company has shed $190 billion in market value.
Research firm IDC noted that in the third quarter of 2012, Samsung accounted for 21.8 percent of "connected" devices - phones, tablets, PCs - compared with Apple's 15.1 percent. In 2011, the two companies were tied at about 15 percent. Lenovo, HP and Sony rounded out the list of rivals in the space.
While Apple depends on revenue from the sale of Macbooks, iMacs, iPods and iPads, iPhones are the heart of the company's business. In the final quarter of its fiscal year, the company sold 26.9 million iPhones, accounting for roughly half its revenue.
But since the release of the iPhone five years ago, competitors have crowded the mobile market.
People had been willing to pay top dollar for the devices to ensure that they get the elegance in design and experience the company has become known for. Yet analysts have begun to worry that Apple has lost that innovative flair and been content to sit on its laurels.
"Far more concerning is the company's uninspired business model," said Jeff Macke, an analyst at Yahoo Finance. "Making the same basic product in different sizes and colors isn't new."
As is the natural progression of technology, Samsung's Galaxy S3 and Google's Nexus 4 are phones that many consider as elegant as Apple's - and they are often cheaper. In addition, Apple must contend with age-old rival Microsoft's host of new smartphones based on its new Windows 8 operating system.
Apple was also seen as late to the market when it introduced the iPad mini, a smaller version of its flagship tablet, in October. Samsung and Google had already released "phablets," as these small tablets with screens between 5 and 7 inches are known. Smartphones, tablets and phablets create three classes of devices for gadget makers, which create worries about cannibalization of their own business. A user might choose the larger iPhone 5, for instance, and realize it's big enough to fill the need for a tablet.
Apple's global share of the tablet market will slip to 53.8 percent in 2012, down from 56.3 percent in 2011, according to December data from IDC, and Android products will grow to 42.7 percent from 39.8 percent.
Google, which announced earnings Tuesday, has quietly given Apple fits with its Android operating system. Google does not release sales figures for its Nexus line of mobile devices, but since it gives away the Android operating system, the software has flooded the mobile device market.
"Android can accelerate where iOS can't: low-cost devices," said Ken Dulaney, a mobile device analyst at Gartner. "And I think (Android is) starting to out-innovate Apple."
Manufacturers like HTC, Nokia and Samsung do not want to develop and maintain their own operating systems, so they take the code from Google. The search giant is not being philanthropic, however. The Android system comes with software that keeps people using Google products like Google Play, a competitor to Apple's App Store.
One area for growth for Apple is international markets. Apple boasted $36 billion in revenue in the previous quarter and a net profit of $8.2 billion, with international sales accounting for 60 percent of revenue. In December the company released the iPhone 5 in China - selling 2 million in the first weekend - and made the iTunes Store available in Russia, India and 54 other countries. The company confirmed this week that it would open an Apple store in Jakarta, Indonesia.
Yet pushing Apple products abroad will be no small task. Asia is especially known for its myriad cheap smartphones, many built with Android.
Since 2003, Apple's profit has jumped more than 10 percent in all quarters except one. Yet an analysis by Bloomberg estimates that the company's net income for the latest quarter will fall 2 percent to $12.8 billion ($13.48 per share). Apple has exceeded analysts' estimates for earnings in all but three quarters since 2006.
If the predictions are accurate, CEO Tim Cook will find himself in the hot seat as he struggles to crawl out from the shadow of the company's late founder, Steve Jobs. Since September, the company has shed $190 billion in market value.
Research firm IDC noted that in the third quarter of 2012, Samsung accounted for 21.8 percent of "connected" devices - phones, tablets, PCs - compared with Apple's 15.1 percent. In 2011, the two companies were tied at about 15 percent. Lenovo, HP and Sony rounded out the list of rivals in the space.
While Apple depends on revenue from the sale of Macbooks, iMacs, iPods and iPads, iPhones are the heart of the company's business. In the final quarter of its fiscal year, the company sold 26.9 million iPhones, accounting for roughly half its revenue.
But since the release of the iPhone five years ago, competitors have crowded the mobile market.
People had been willing to pay top dollar for the devices to ensure that they get the elegance in design and experience the company has become known for. Yet analysts have begun to worry that Apple has lost that innovative flair and been content to sit on its laurels.
"Far more concerning is the company's uninspired business model," said Jeff Macke, an analyst at Yahoo Finance. "Making the same basic product in different sizes and colors isn't new."
As is the natural progression of technology, Samsung's Galaxy S3 and Google's Nexus 4 are phones that many consider as elegant as Apple's - and they are often cheaper. In addition, Apple must contend with age-old rival Microsoft's host of new smartphones based on its new Windows 8 operating system.
Faulty moves?
In a move that many saw as a reaction to the standards of these other smartphones, Apple's latest iPhone featured a larger screen than its previous models. "Making an iPhone the size of a Galaxy III is desperation, not innovation," Macke said.Apple was also seen as late to the market when it introduced the iPad mini, a smaller version of its flagship tablet, in October. Samsung and Google had already released "phablets," as these small tablets with screens between 5 and 7 inches are known. Smartphones, tablets and phablets create three classes of devices for gadget makers, which create worries about cannibalization of their own business. A user might choose the larger iPhone 5, for instance, and realize it's big enough to fill the need for a tablet.
Apple's global share of the tablet market will slip to 53.8 percent in 2012, down from 56.3 percent in 2011, according to December data from IDC, and Android products will grow to 42.7 percent from 39.8 percent.
Google, which announced earnings Tuesday, has quietly given Apple fits with its Android operating system. Google does not release sales figures for its Nexus line of mobile devices, but since it gives away the Android operating system, the software has flooded the mobile device market.
"Android can accelerate where iOS can't: low-cost devices," said Ken Dulaney, a mobile device analyst at Gartner. "And I think (Android is) starting to out-innovate Apple."
Market share
An analysis by Gartner said 72.4 percent of worldwide mobile devices sold in the third quarter of 2012 ran Android. Only 13.9 percent ran Apple's mobile operating system, iOS.Manufacturers like HTC, Nokia and Samsung do not want to develop and maintain their own operating systems, so they take the code from Google. The search giant is not being philanthropic, however. The Android system comes with software that keeps people using Google products like Google Play, a competitor to Apple's App Store.
One area for growth for Apple is international markets. Apple boasted $36 billion in revenue in the previous quarter and a net profit of $8.2 billion, with international sales accounting for 60 percent of revenue. In December the company released the iPhone 5 in China - selling 2 million in the first weekend - and made the iTunes Store available in Russia, India and 54 other countries. The company confirmed this week that it would open an Apple store in Jakarta, Indonesia.
Yet pushing Apple products abroad will be no small task. Asia is especially known for its myriad cheap smartphones, many built with Android.
Report by :
Caleb Garling
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