Misek: Apple takes advantage of Samsung Galaxy S4's inability to meet internal sales estimates

Misek: Apple takes advantage of Samsung Galaxy S4's inability to meet internal sales estimates
Jefferies analyst Peter Misek says that Samsung is having problems reaching its internal projections for Samsung Galaxy S4 sales. According to the Wall Street analyst, Apple is the beneficiary because had sales of the Galaxy S4 hit the Korean manufacturer's target, Samsung would have raised its foundry prices to Apple. Misek has become a bull on Apple, but that doesn't mean you should run out and buy the stock. Earlier this year, just before the BlackBerry Z10 launched, Misek was bullish on the Canadian manufacturer when the stock was over $15 a share, about double what the stock is trading at now. Not a good call.

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

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Galaxy S4
  • Display 5.0" 1080 x 1920 pixels
  • Camera 13 MP / 2 MP front
  • Processor Qualcomm Snapdragon 600, Quad-core, 1900 MHz
  • Storage 64 GB + microSDXC
  • Battery 2600 mAh(17h 3G talk time)

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12 Comments

1. rallyguy

Posts: 620; Member since: Mar 13, 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: 4063; Member since: Jul 23, 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: 200; Member since: Jul 04, 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: 2236; Member since: Jun 14, 2013

Samsung is less profitable, so nobody has a clue what you are talking about and why.

9. tedkord

Posts: 17410; Member since: Jun 17, 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. http://www.cnbc.com/id/100916625

3. Dingy_cellar_dweller

Posts: 339; Member since: Mar 16, 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: 31298; Member since: Feb 05, 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.

5. androiphone20

Posts: 1654; Member since: Jul 10, 2013

baahaha

7. Omar-BHR95

Posts: 184; Member since: Dec 23, 2012

lol..

8. Reluctant_Human

Posts: 913; Member since: Jun 28, 2012

Well said lol

10. tedkord

Posts: 17410; Member since: Jun 17, 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: May 20, 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.

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