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