Apple has released their financial earnings for fiscal 2012 third quarter ended June 30, 2012 on 24 July. The earning result missed Analysts’ estimate, but was well within Apple’s guidances for the quarter. Of course, Apple missing analysts’ estimate was big news since the Cupertino company has been comfortably outperforming these estimates recently. The company blamed the result on people holding out for the new iPhone expected later this year and a slow down of the European economy.
These are all valid points, however what if these high-end smartphones (Galaxy S3, iPhone 4S, HTC ONE X etc) are approaching saturation point. Apple is mainly selling to this high-end market with their iPhone 4 and iPhone 4S. Samsung on the other hand, has been doing extremely well by targeting the low, medium and high end market.
Kevin Restivo, senior research analyst with IDC’s Worldwide Quarterly Mobile Phone Tracker states:
Samsung employs a ‘shotgun’ strategy wherein many models are created that cover a wide range of market segments. Apple, in contrast, offers a small number of high-profile models. While both companies have expanded their geographic presence in pursuit of market share, the two companies will inevitably come into greater conflict as both try to generate additional gains.
I have put together a few bar charts to illustrated how Apple is doing in terms of devices sold and year-ago quarter sale comparison over the last three years. I’ve have chosen to omit the iPod from these charts since its decline in sales is expected due to cannibalisation.
Bases on those charts you can see Apple has done very well in Q3-2011 cross the board. However, the growth has slowed significantly in Q3-2012 except for the iPad. I personally believe that there are a lot of mitigating circumstances contributing to this at the moment. Apple has already highlighted a few, but saturation point was not discussed. It’s inevitable that Apple would have to target the medium market aggressively going forward to increase growth. The iPhone 3S is addressing this market at the moment, but I’m not sure the number is large enough. The company definitely doesn’t seem interested in the low end market. It will be interesting to see what next year’s numbers are going to be.
