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Boosted by strong Galaxy S III sales, Samsung (SSNLF.PK) is estimated to have sold 50M...

Boosted by strong Galaxy S III sales, Samsung (SSNLF.PK) is estimated to have sold 50M smartphones in Q2, according to analysts polled by Reuters. That's easily above the 30.5M iPhones Apple (AAPL) is believed to have sold (ed: many firms have dropped their Q2 estimates below 30M in recent days). Samsung's Android phones often sell at much lower price points than the iPhone, and that has helped them take share from Nokia (NOK) and others in Europe and emerging markets.
Comments (24)
  • RSI Raistlin
    , contributor
    Comments (400) | Send Message
     
    Watch CEVA shares jump next quarter as they receive revenue for each sold phone 1 quarter after it is sold.

     

    I'm long CEVA in case people are interested in my affiliation
    16 Jul 2012, 02:49 PM Reply Like
  • Jeremy Johnson, CFA
    , contributor
    Comments (781) | Send Message
     
    Samsung just killed it with the Galaxy Note and S III. But, I doubt Apple will miss the mark with iteration 5, so it's not time to write them off.
    16 Jul 2012, 02:49 PM Reply Like
  • Tack
    , contributor
    Comments (13401) | Send Message
     
    There appear to be storm clouds brewing on Apple's horizon. In the major growth markets, Android and Samsung are eating Apple's lunch, and they're generating new products and software much faster than Apple.

     

    In essence, absent Steve Jobs, Apple's appears to have diminished aggressiveness and has seen a decline in no-excuses timing and execution. The recent attempts at using patents to slow down Samsung seem like the moves of someone playing defense, rather than offense.

     

    Apple has vast amounts of cash, but have they lost their competitive edge?
    16 Jul 2012, 02:55 PM Reply Like
  • mcclux
    , contributor
    Comments (44) | Send Message
     
    How is Samsung eating Apple's lunch when Apple's profits from the sale of 30M phones is 3X the profit that Samsung makes from selling 50M?
    16 Jul 2012, 03:45 PM Reply Like
  • raincity
    , contributor
    Comments (220) | Send Message
     
    Apple could eat everyone's lunch if they wanted to release 50 different iterations of their phone at various price points and margins.

     

    Apple is a premium brand. They are concerned with quality and margins. Their profitability and success speak for themselves.
    16 Jul 2012, 03:50 PM Reply Like
  • Jeramy41
    , contributor
    Comments (78) | Send Message
     
    Boom. Righty-O raincity & mcclux.
    16 Jul 2012, 04:25 PM Reply Like
  • benfromchicago2689
    , contributor
    Comments (73) | Send Message
     
    If you think Apple is losing out to Samsung, I would like to see your short recommendation of AAPL. What price do you think is a good starting point to be short AAPL?

     

    I personally do not agree that Apple is losing out to Samsung as Apple is still taking 70% of the profit of the smart phone sales. But I always would like to see the opposite point of view. But in general I see more doomsayer with no concrete trading agenda. One can say the world is ending for all he can. If he means the world is ending in 5,000 years, that is not relevant to the current discussion.
    16 Jul 2012, 04:28 PM Reply Like
  • Tack
    , contributor
    Comments (13401) | Send Message
     
    ben:

     

    I don't trade in Apple or any tech stocks, for that matter, but was just making a passing observation.

     

    Samsung/Android have been growing at a much faster pace than Apple. And, it doesn't matter if their margins are less if they deny Apple the customers. At some point Apple's growth gets choked.

     

    Personally, I have a Samsung Galaxy Nexus phone, and, contrary to being "low end," it can run circles around an iPhone in design elegance and performance, and at a far better price, too. The new S3 is even better.

     

    Being a value investor, I tend to avoid high-priced go-go stocks in any event, but I'd be wary of Apple from what I see happening.

     

    Just one opinion.
    16 Jul 2012, 04:38 PM Reply Like
  • benfromchicago2689
    , contributor
    Comments (73) | Send Message
     
    Tack:

     

    Thank you for your civilized comment. Everytime I wrote something on AAPL, I kind of expect a cultural war as there are many RIMM and Android fan who somehow feel their ego is being trampled on if I wrote something positive about AAPL.

     

    I respect your opinion on the design of the Galaxy S3. It is your phone and your taste and if it works for you better than the iPhone 4S, that is great.

     

    But to compare 4S against S3 is a bit unfair because of the difference in product cycle. Nonetheless, I still feel that in the global growth of smartphone market there is enough room for both S3 and iphone 5 to do well at the same time.

     

    The key of my argument is that Apple still has room to grow explosively in the next couple of years. And while the absolute price of the stock is a tad high, the P/E is not. So while you are wary of Apple in terms of competition, I think it is already priced in the stock. Had Apple been trading in the same P/E as Amazon, I would beat you in trying to set up a short. But in my opinion Apple still has a couple of years of great run.

     

    Beyond the next couple of years when Steve's vision and legacy no longer directly touch Apple, it is an open game. But again I am talking about relatively short term trading. In a sense I agree with you that Apple is not a long term buy and hold stock because of the rapidly changing landscape of technology. But in the near term Apple is a solid buy for me.
    16 Jul 2012, 04:56 PM Reply Like
  • RSI Raistlin
    , contributor
    Comments (400) | Send Message
     
    there are still RIMM fans? I thought they went the way of the Pterodactyl (unsure on spelling)
    16 Jul 2012, 05:34 PM Reply Like
  • benfromchicago2689
    , contributor
    Comments (73) | Send Message
     
    Yes, they are here. For the sake of charity (I don't want to rub it in their face) I won't name names. But if you care to go back to articles about RIMM in May or even June, you will find plenty of them.

     

    I have no problem of their devotion to their mobile phone. Hey, I am a Star War fan. But I do have a problem when I was talking about AAPL being low on P/E, some of them came out and flamed me and said that iPhone was doomed and BB10 would rule in 2012 (13 now?). I am trying to have a reasonable discussion on trading strategy but they are having a jihad in the smartphone cultural war.
    16 Jul 2012, 06:04 PM Reply Like
  • RSI Raistlin
    , contributor
    Comments (400) | Send Message
     
    hey I got a blackberry myself......mostly cuz I'm too cheap to actually upgrade til I get the full amount haha. I just think to be a RIMM fan still means you like pain like a sadomasochist (again unsure on spelling)
    16 Jul 2012, 06:09 PM Reply Like
  • Jeremy Johnson, CFA
    , contributor
    Comments (781) | Send Message
     
    Even in the past few months, things have gone down hill for RIM. It's easy to say told ya so now, but if they could have executed on BB10 for a Fall launch, they could have been a contender. There are still lots of people that love the Blackberry and I mean normal everyday people not overachieving corporate email junkies. But they are too far behind now, and BB10 and accompanying device will not even be out until '13, I believe.
    16 Jul 2012, 06:13 PM Reply Like
  • Atkins
    , contributor
    Comments (1045) | Send Message
     
    I use an HTC Droid, recently bought a relative in Ukraine a Galaxy (which she loves), and read books on my iPad (but do not own an iPhone). In other words, I spread the wealth between the companies. All three makers are solid and certainly miles ahead of Nokia. Samsung has a good product at its price point, but the Galaxy will never have the cache of Apple. Younger people who buy the Galaxy because of its reasonable cost will likely graduate to Apple or Android.
    16 Jul 2012, 10:53 PM Reply Like
  • Jeremy Johnson, CFA
    , contributor
    Comments (781) | Send Message
     
    Galaxy S3 is not cheap -- same price as the iPhone 4S on contract and more unlocked.
    16 Jul 2012, 10:55 PM Reply Like
  • Bubenthauser
    , contributor
    Comments (38) | Send Message
     
    Yey, an opinion that is. Rather misinformed, though.
    But, we Apple investors and traders need the misinformed and blind people like yourself. We love the look of surprise and disbelief every single quarter. And yet you guys don't get it.. you don't get the bigger picture that Apple is trying to achieve and deliver with every single product they launch.
    Design elegance in Samsung? Holy crap, I just heard the funniest joke of the month.
    17 Jul 2012, 05:15 AM Reply Like
  • Chris Lau
    , contributor
    Comments (1863) | Send Message
     
    I once thought apple was invincible until a big fan of it simply got bored, and switched to Android. Apple will continue to make far more than android by profit, but risks losing that edge if consumers want something new.
    16 Jul 2012, 04:45 PM Reply Like
  • Minnesota_Steve
    , contributor
    Comments (142) | Send Message
     
    Chris, Apple and Samsung are both killing it. They're the only two making significant profit. We have a duopoly. At the moment, Apple has three premium product categories that are making large amounts of profit and have significant rapid growth. iPhone, iPad and Mac. Samsung is nailing it in the phone category but they are not yet a significant player in the high-end computer or tablet markets. It's the tablet market that has to be concerning Samung now, as it will likely for Apple surpass the iPhone in long-term profit generation.
    16 Jul 2012, 07:18 PM Reply Like
  • Ronin.
    , contributor
    Comments (1487) | Send Message
     
    "Apple will continue to make far more than android by profit, but risks losing that edge if consumers want something new."

     

    Chris, Android is no longer new either, do you mean that Windows or BB10 might take over prominence? I would worry about Apple losing their base if friends leaving iOS was something I heard often, but yours is the first I've heard of, ans a sample size of one is hardly compelling. Anything that I heard so far regarding platform migration has been in Apple's favor.
    16 Jul 2012, 07:36 PM Reply Like
  • Tack
    , contributor
    Comments (13401) | Send Message
     
    Ronin:

     

    Better take a look at this: http://bit.ly/SDsOtC
    16 Jul 2012, 07:43 PM Reply Like
  • Ronin.
    , contributor
    Comments (1487) | Send Message
     
    Thanks Tack, the fact that sales of Android has outpaced iOS is well known to me. Only Samsung has actually gained ground, almost without fail, such assessments compare Apple against a whole slew of phone manufacturers. Taking Samsung vs Apple, the charts will look very different, granted, Samsung is still growing faster, and they do so at the expense of margins. When there is no more US market expansion left (there is around 30% left to be had), I think that Apple will gradually pull market share from Android. Already, the growth market is primarily overseas.

     

    Also, what I was addressing was the choices that iPhone users make, percentages who abandon Apple for something else, since that's what Chris was bringing up...people possibly getting bored and switching to something else. Generally, Apple does the best at retaining their customers. Android users are much more likely to switch over to Apple than the other way around.

     

    What Android is being successful at is capturing customers new to smartphones. I speculate that this is due to price and due to carriers pushing customers toward 4G devices for their own reasons.
    16 Jul 2012, 08:25 PM Reply Like
  • Jeremy Johnson, CFA
    , contributor
    Comments (781) | Send Message
     
    This guy is not a professional reviewer:

     

    http://bit.ly/Q3oAh8

     

    Dropped iPhone for Samsung. See the polls in the post and note the number of views this has had.

     

    I could show you a dozen YouTube videos that are qualitatively the same, including comments to the same effect.

     

    Nevertheless, Apple's mark 5 phone is on deck and we'll have to reserve judgement until we see that device.

     

    On a different note, Samsung generates 19% ebitda margins, not much below Apple's 25%. Considering how many commodity products are through Samsung's operations, this is extraordinary.
    16 Jul 2012, 09:18 PM Reply Like
  • Ronin.
    , contributor
    Comments (1487) | Send Message
     
    Jeremy, perhaps you are correct, but I have long been under the impression that Apple takes 3/4ths of the smartphone profits, so it follows that margins must be quite a bit higher than every other manufacturer.

     

    Asymco's Horace Deidu reports that Apple takes 73% of the industry profits, and Samsung commands 26%. Now, being that Samsung sells more smartphones than Apple, how can margins be anywhere close to each other?

     

    http://bit.ly/JgLbPC

     

    Another writer addresses margins:
    " it is also apparent that iPhone as a device gives more contribution than Galaxy. It is not an “oranges to oranges” comparison as Apple reports gross margin percentage and Samsung reports a gross margin percentage with marketing costs deducted as well. Nonetheless, iPhone gross margin of 40% versus Samsung diluted gross margin of 16% is indicative that the iPhone is by far and away the most profitable Smartphone in the world, and Apple $ for $ is overall a profit generating machine"

     

    http://bit.ly/MC2DPw
    16 Jul 2012, 09:56 PM Reply Like
  • rubicon59
    , contributor
    Comments (1383) | Send Message
     
    let's every three months come up with an new "Apple is doomed scenario". And back this up with "how I swithched from an iPhone to [insert name] Android phone and it is great"
    16 Jul 2012, 10:13 PM Reply Like
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