When the gods dance...

Monday, January 7, 2013

Another crack in mighty Apple brand: good or bad news?


Phone sales stutter, software misfires, rivals get cleverer – at least lower share price makes Apple a bargain


IS THE mighty Apple corporation floundering? Sales are flatlining at the technology giant and yesterday itsshare price dipped below the magic $500 mark for the first time since May.

There are several reasons for the downturn. The iPhone 5 has not sold as well as expected, with sales 'peaking' in the US and the device receiving a frosty reception in China, as the Daily Telegraph reports.

Apple has also had problems with its software, especially Maps and Siri. Finally, Apple's competitors – in particular, arch-rival Samsung - are catching up. Sales of Samsung's Galaxy S3 phone overtook sales of the iPhone 5 in November, meaning the California company no longer dominates the smartphone market – which is serious, because phones account for over half its revenue.

"The iPhone 5 is game over," Jeff Pu, a Taipei-based analyst at Fubon Financial Holding, told the Telegraph. "We are turning cautious on the Apple supply chain, as we believe we are at the peak of many product cycles."

Apple's other big launch recently was the iPad mini, which has sold well – too well for the company's own good, say experts.

The iPad mini appears to be outselling the iPad proper by a margin of two to one according to Business Insider, and, since Apple makes less money from the mini than the full-size iPad, analysts are dialling back their earnings forecasts for next year.

Apple has also suffered in the courts. In October it was ordered to publish an apology, stating that Samsung's tablets did not copy Apple's designs for the iPad. Yesterday, a California judge refused Apple's plea for a ban on sales of Samsung's Galaxy Nexus phones in the States, saying that while the Japanese had infringed patents, there was not enough evidence that this had hurt Apple iPhone sales.

The latest glitches in the Apple story come 14 months after the death of Apple chief executive Steve Jobs, and just a fortnight after co-founder Steve Wozniak said the company's global domination might be ending because Samsung, Google and Microsoft were catching up.

Wozniak, who with Jobs started Apple 36 years ago, said Samsung and Co had created "a level playing field" and Apple was no longer the only brand to capture the public's imagination.

However, there is a more positive way of looking at the falling stock price – it means Apple shares are a better bargain. Matt Krantz in USA Today said: "There's no question that while Google is beating Apple in terms of getting its Android operating system, and now maps, into the greatest number of consumers' hands, Apple's premium pricing is making it a bigger darling on Wall Street." · 

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