The past week saw three key developments in the mobile sector:
1. Apple discounts the iPhone
Sluggish iPhone sales in the final quarter of FY 2012 seem to have finally forced Apple’s hand. Apple (NASDAQ:AAPL), in a strategy hitherto unheard of, authorized its Apple Store employees to offer discounts on the iPhone matching those by big box retailers such as Target (NYSE:TGT) and Best Buy (NYSE:BBY). (see Apple Softens Stance On iPhone Discounts As iPhone 5 Launch Nears)
- Why Has Apple’s R&D Efficiency Been Declining?
- Apple’s Earnings Shine As iPhone 7 Cycle Turns Out Better Than Expected
- Apple Q1 Preview: Will Samsung’s Missteps And Carrier Promos Help Apple Beat Expectations?
- Why 2017 Will Be A Important Year For The Premium Smartphone Market
- The Success Of Airpods Could Add $10 Billion To Apple’s Market Cap
- Apple’s Airpods Could Be A Bigger Business Than Apple Watch
This comes on the back of Sprint slashing $50 off the subsidized iPhone 4S price last week. While it is early to read into these developments considering that the iPhone 5 launch is nearing and the holiday quarter will shortly be upon us, it does seem that a highly competitive smartphone market as well as the one-year product cycle of the iPhone are finally catching up with Apple.
2. Samsung Continues Smartphone Dominance
In a recent report by Strategy Analytics, Apple’s primary smartphone competitor, Samsung, managed to ship more than 50 million smartphones in Q2 2012, almost twice as many as Apple during the same period. This followed the 44.5 million smartphones that Samsung shipped in the previous quarter, ahead of Apple’s 35 million iPhone shipments for the same period. While a major part of the Korean giant’s success can be attributed to its much larger portfolio of smartphones, it was also able to take advantage of flagging interest in the two-quarter old iPhone 4S to drive demand for its high-end flagship smartphone, the Galaxy S III. Samsung managed to sell more than 10 million units of the S III in less than two months since the launch. (see Apple Falls Behind Samsung In Smartphone Sales But iPhone 5 Is Near)
Samsung’s growing appeal among high-end consumers is a concern for Apple, which has until now only dropped the prices of its older models to appeal to the price-sensitive. If Apple continues to maintain status quo on the current year long product cycle for the iPhone, it gives competitors such as Samsung leeway to grab market share in the lean periods of iPhone demand as was seen last quarter.
3. RIM Provides More Insight into BB10 Strategy
Research in Motion, which has slid from its once strong position in the smartphone market, is rushing to get its BB10 OS ready in time for launch early next year. The BlackBerry maker has already postponed launching BB10 smartphones by a year and cannot afford to delay it any further, as intensifying competition from Apple and Samsung in the smartphone market have nearly halved BlackBerry revenues. As a precursor to the launch, RIM is revealing interesting tidbits about the new OS in order to maintain customer as well as developer interest in the new OS which the company is pinning all its turnaround hopes on.
See our recently published RIM Outs New BB10 Features And Licensing Plans Ahead Of Launch Next Year for additional details.