CIE Components in Electronics
Disappointing sales of the company’s new iPhone 5 saw Apple shares plummet this week, despite recording quarterly revenues in excess of $55bn. About $50bn was wiped off the value of the company’s shares as it reported flat profits for the last quarter of 2012 and shareholders have become increasingly worried that Apple’s dominance in the smartphone market is coming under threat.
Those worries will have been heightened with the news that Samsung Electronics saw its profits surge 76% in the last three months of 2012, helped by sales of its Galaxy smartphones. Net income rose to a record $6.6bn beating analysts” expectations.
The Korean firm which became the biggest smartphone manufacturer last year, said its mobile profits more than doubled over the same period. While Samsung did not provide data on the number of smartphones it had shipped analysts estimate it to have sold over 63 million smartphones in the quarter.
Analysts are increasingly voicing fears that Apple is in danger of becoming a victim of its own success. While the company sold 47.8m iPhones in the last three months of 2012, a record, it was unable to lift profits above the $13bn reported last year. The relatively poor performance of the iPhone 5 has also impacted on the share values of most of the company’s leading suppliers.
The iPhone”s once dominant position is being challenged by Samsung and other makers of Android-based devices, which now make up a far greater percentage of overall smartphone sales than the iPhone.
This week has also seen Nokia report a return to profit in the final quarter of last year, with strong sales of its new Lumia smartphone, its first major product launch since the company teamed up with Microsoft.
With Apple no longer seen as the market leader in innovation, some analysts believe it is going to have to rethink its core strategy, currently based on focusing on a handful of premium products. Others argue that investors” expectations are wholly unrealistic, and the company remains hugely successful.
