Neil Hughes
Samsung's recent successes are an "issue" for Apple that the company must promptly address by expanding the market for the iPhone, one analyst believes.
Mockup of iPhone with 4.94-inch screen, created by Marco Arment.
Ben A. Reitzes of Barclays issued a note to investors on Tuesday in which he declared that Samsung's momentum, particularly in the mid-tier market, now "begs an answer from Apple." Reitzes' colleague, SC Bae, expects Samsung to successfully launch both the Galaxy S3 mini and the Galaxy Grand in the coming months, while Apple does not have a response in the smartphone segment.
"To say that the Samsung momentum is an issue for Apple is an understatement," Reitzes said. "Not only is Samsung helping its own cause, but it catalyzes Android as well. As a result, we need to see Apple expand its iPhone market this year in a big way — and improve its platform in 2013."
He believes Apple can recapture some of the momentum lost to Samsung with three objectives: an expansion of Web services, expanding its distribution, and also launching new products.
Reitzes is optimistic that Apple will launch two new iPhone models this year, along with a follow-up to the iPhone 5. Specifically, he believes a lower-cost iPhone will expand Apple's sales in emerging markets like China, while a larger iPhone would combat devices like the Samsung Galaxy Note series.
He expects that Apple could debut a cheaper iPhone in mid-2013, featuring a plastic casing and cost reductions through less flash memory, a lower megapixel camera, and an older processor. He also sees Apple's larger, so-called "phablet" iPhone launching as soon as October.
The same analyst already called on Apple earlier this month to release a big-screen iPhone, sometimes referred to as a rumored "iPhone plus." He predicted a 5-inch iPhone would offset some of the average selling price declines Apple would see from a low-cost iPhone for emerging markets.
As for the flagship "iPhone 5S," Reitzes referenced rumors that Apple plans to add fingerprint authentication to its next handset, thanks to its acquisition of security firm AuthenTec for $356 million last year.
"We believe Apple is a platform company and its next great innovations have to come in the form of software and Web/data services," Reitzes wrote. "We believe these services are needed to keep Apple's ecosystem ahead of the pack and to attract and retain more users."
As for long-running rumors of a full-fledged television set from Apple, Reitzes does not believe Apple needs to build its own large-screen panels. Instead, he believes the company should focus on making the existing Apple TV set-top box device even better.
"The time to wait and 'hobby' is over," he said. "2013 has to be the year for the TV strategy or it risks falling behind in our opinion. There are many opportunities for Apple to release a new vision for a TV ecosystem in the coming months, especially as we approach WWDC."
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101 Comments
Analysts believe Apple is in a race to the bottom to compete. Apple has no momentum huh? They've only out sold Samsung last quarter. Where do they come up with this shit? Apple has a low cost phone...its called the iPhone 4S and iPhone 4. What's next, Apple pays customers to buy an iPhone? I don't believe Apple can be in every market available, just like Macs aren't. Sure, there's some lost revenue, but that doesn't mean one company wins over another.
Hey Ben, Apple has 70% of the mobile profits and record settings sales of idevices. Shut up. Apple knows what it's doing. It may release a 5" phone as a complement. It probably won't release a crap phone just for the sake of market share.
yawn. Another ANALyist who just doesnt get it. Thats not the Apple way. To me it looks like Apple are doing just fine with the Lions share of all the profits in the market at the moment. These guys just seem to value based on Market share % alone. Let Samsung be the "busy fools". Dozens of models, no OS of their own, no eco-system, drastically fragmented OS versions, small margins. Looks to me like Samsung (and others) are the ones who need to find an answer to Apple's money making machine
I know, let's have MBAs run Apple into the ground.
Releasing a larger iPhone would not be meant to combat the Galaxy Note, it's for the Galaxy S series themselves. I see too many of the Apple faithful strictly citing sales of the Note as if to diminish the demand for such products. Every phone that's 4.7 inches or above should fit in the category of devices which the "iPhone Math" would compete with. Only when you include all of those other devices can you really see the size of this market.