Mobile Weekly Notes:Apple’s iPhone Sales, BlackBerry’s New Device and Samsung’s Note 4 Launch

SSNLF: Samsung Electronics logo
SSNLF
Samsung Electronics

The mobile industry had an eventful week, with Apple (NASDAQ:AAPL) reporting record first weekend sales for its new iPhone models and BlackBerry (NASDAQ:BBRY) launching its new high-end Passport smartphone. In other news, Samsung Electronic (PINK:SSNLF) accelerated the launch of its Galaxy Note 4 device in China as the company seeks to capitalize on Apple’s delay in launching its new iPhones in the Chinese market.

Apple’s Strong iPhone Launch Weekend

Apple reported that its two new iPhone models – the iPhone 6 and iPhone 6 Plus – were off to a strong start, selling 10 million units over the launch weekend. While Apple is certainly seeing pent-up demand for its new phones, given its prior lack of a large-screen offering, we wouldn’t read into the launch numbers too much for two reasons. Firstly, three days represents a small a sample size to gauge the long-term sales of the phone. Additionally, the numbers likely represent sell-ins to vendors and not the sell-through to end customers, and are often just a function of Apple’s manufacturing capacity and the supply of phones that it has available over the launch weekend. A key near-term factor that we will be watching for is an announcement of a launch date for the new models in China, which is one of the company’s fastest-growing markets. The company is reportedly seeing a delay due to a pending license approval from Chinese regulators. [1]

  • We have a $97 price estimate for Apple, which translates to a market cap of around $580 billion. Our price estimate is about in line with the current market price. We estimate the company’s FY 2014 EPS at around $6.27, compared to a consensus estimate of around $6.33 according to Reuters. We are modeling iPhone shipments of around 172 million units for CY 2014, with the number rising to around 190 million units in CY 2015. We estimate the company’s CY 2014 revenues to come in at around $182 billion.
  • Apple’s stock was down by about 3.5% through Thursday possibly due to the company’s delay in launching its new phones in China and also because the company withdrew a faulty update to its latest iOS 8 operating system. The stock recovered somewhat on Friday.

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BlackBerry’s New Passport Smartphone

Blackberry (NASDAQ:BBRY) launched its latest high-end handset dubbed the Passport earlier this week, in a bid to stay relevant in the premium smartphone market  The device, which will be priced at around $600, sports a relatively radical design featuring a high-resolution square 4.5 inch screen, a modified version of BlackBerry’s signature physical keyboard along with reasonably strong hardware specifications that include a Snapdragon 800 2.2 GHz quad-core processor, 3 GB of RAM and a high-capacity battery. BlackBerry is positioning the Passport as a productivity-focused device, targeting its core base of business and government customers. However, we believe that the device could face significant challenges given that it enters a saturating high-end smartphone market dominated by Apple and Samsung,  who have been increasingly targeting the enterprise mobility space.

  • Trefis has an $8.80 price estimate for BlackBerry, which translates to a market cap of around $4.6 billion. Our price estimate represents a 10% downside to the current market price. We estimate the company’s FY 2015 loss per share at around $0.68 which compares to a consensus of around $0.61 according to Reuters. We are forecasting the company’s CY 2014 revenues at around $4.28 billion.
  • BlackBerry’s stock price dropped by around 9% through Thursday, largely due to analyst downgrades, but recovered substantially on Friday following its better-than-expected earnings.

Samsung Advances Its Note 4 Launch Date

Samsung  plans to hasten the launch of its Galaxy Note 4, in a move the company’s executives attribute to a “positive reaction” to Apple’s new iPhone models. [2] The Note 4 was initially slated for an October launch, but the company has now planned to advance the Korean launch date to September 26 and will also likely launch the device in China this month. Apple has been reportedly facing supply constraints for the iPhone 6 Plus phablet and the company has also yet to announce a launch date in the Chinese market. Samsung’s preponed Note 4 launch could be a bid to capitalize on Apple’s current constraints. Large-screen smartphones, or phablets, represent the fastest-growing segment of the global smartphone market, with shipments set triple this year.(( A Future Fueled by Phablets, IDC, September 2014))

  • Trefis has a $1,200 price estimate for Samsung, which implies a market cap of around $177 billion. Our price estimate is about 10% ahead of the current market price. We estimate the company’s FY 2014 EPS at around $170, compared to a consensus estimate of around $152 according to Reuters. We are forecasting revenues of around $210 billion for FY 2014 for Samsung.

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Notes:
  1. Apple’s iPhone 6 still one license away from elusive China launch, Reuters, September 2014 []
  2. Samsung openly admits ‘positive reaction’ to iPhone 6 Plus prompted early launch of Galaxy Note 4, Appleinsider, September 2014 []