Misek: Apple takes advantage of Samsung Galaxy S4's inability to meet internal sales estimates
Part of the reason for Misek's bullishness on Apple is the Cupertino based company's ability to source parts at favorable prices. That allows Apple to increase profit margins. Meanwhile, Samsung says that the high end of the smartphone market is being over saturated leading to slowing Samsung Galaxy S4 sales. Despite the loss of momentum for Samsung at the high end of the market, the company still expects to report record earnings thanks to strong chip sales.
Misek told his clients on Monday, "Galaxy S4 sales missed internal targets leading Samsung to not raise foundry prices for Apple like we expected." So for Samsung, lower than planned sales of the Samsung Galaxy S4 not only hurt Samsung's P/L sheet, it also helped Apple continue to get favorable prices from Samsung for chips. And the cycle continues as the low chip prices allow Apple to sell its new smartphones and come away with a higher profit margin. The only way to reverse this circle to allow Samsung to raise its foundry prices to Apple would be if Samsung Galaxy S4 sales start moving back higher to Samsung's projections. Unfortunately for the Korean OEM, in this business once a model starts fading out, it is very rare to get the ship righted even with a price cut.
source: BusinessInsider via BGR
1. rallyguy (Posts: 620; Member since: 13 Mar 2012)
There are many reasons. I wouldn't say Android market is saturated as much as there is more competition and selection which is a good thing. It means the product has to constantly better the last phone in order to sale well. Apple has the advantage because there is only one phone. Yes there is the 5S and 5C but they are are both "new iphones".
11. Finalflash (Posts: 2171; Member since: 23 Jul 2013)
Well the main reason Samsung won the Android market was because they got their act together first. HTC is still reeling from bad management. Sony just got back on their feet after a long painful restructuring and culling of deals from a decade ago that haemoraghed their own products. LG has finally found their own stride and creative ability. And the Chinese ones are finally expanding out. Droid is just gonna get better by leaps and bounds especially now that the hardware race is cooling and software becomes the focus.
2. 1113douglas (Posts: 193; Member since: 04 Jul 2013)
You need to remember thats samsung has over a hu dred different smartphones apple has under 10. And their are thousands of different smartphones running the android operating system when their are less than ten running ios. Their are 4 models of the gs4 and oneof the iphone 5s. Samsung will alwYs be the king of smartphones, whether they have the top selling smartphone or not, samsung is way more profitable inthe smartphonemarket almost double apple.
6. Napalm_3nema (Posts: 1675; Member since: 14 Jun 2013)
Samsung is less profitable, so nobody has a clue what you are talking about and why.
9. tedkord (Posts: 7372; Member since: 17 Jun 2009)
Samsung made more than Apple in mobile last quarter, but historically has not. But Samsung is looking at another record quarter, which I'm assuming is driven largely by mobile.
3. Dingy_cellar_dweller (Posts: 214; Member since: 16 Mar 2013)
I would of thought that Samsung would've welcomed Apple back with a price rise. This normally happens between any waring groups so why not with these two.
I guess I know nothing about big business.
4. darkkjedii (Posts: 15653; Member since: 05 Feb 2011)
The s4 will pick up steam as the holidays approach, and s4 prices bottom out. Buy one get one free, stuff like that. I'm kinda shocked they were that low though. One thing Sammy needs to do, is quit outing so many phones so quickly. Their market saturation is obviously affecting flagship sales. Oh well I'm headed to walmart to pick up the new galaxy S-Toaster, and a galaxy S-dust pan, maybe a galaxy S-broom too.
10. tedkord (Posts: 7372; Member since: 17 Jun 2009)
The thing is, smartphones have become like PCs. They're already more powerful than the average person needs. A mid range does everything most people need and does it well.
You've got enthusiasts who want the bleeding edge (like me). I don't need it, I want it. But most people just want the basics.
That said, I think the Galaxy S4 has sold just fine. Samsung hasn't released any numbers other than 20 million in two months and 9 million preordered. But I think Samsung phoned this one in. People expected more from them, not the Apple route of tiny upgrades. And for the first time Apple actually offered a big change with an S model. That makes Samsung look bad.
Now, the Note 3 looks more like it. They put some real thought into that one. It's a productivity beast. I've got a real decision to make now - Note 3 or One Max.
12. lzsbleach (Posts: 155; Member since: 20 May 2012)
Samsung has too many devices that look the same lol. I think this year for Samsung is a setup for next year so they didnt really put 100% effort in the S4. They were probably also developing the S5 and decided to try some new things in the market which wasnt all that smart. I think next year is Samsung year hopefully.