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With international smartphone buyers clamoring for large displays and cheap Android phones...

With international smartphone buyers clamoring for large displays and cheap Android phones spreading like wildfire in fast-growing emerging markets, "Apple’s (AAPL) competitors are finally doing a better job of making the kinds of phones that customers want," writes The New Yorker's James Surowiecki, summing up the biggest fear on investors' minds. But Apple has shown a knack for innovating its way out of tough spots, and can do so again. "Failing to build a phablet or a cheap phone may well have been mistakes, but they’re fixable mistakes."
Comments (38)
  • Mr. James Surowiecki joint the pack of superficial reporting not adding anything new. What he called maps fiasco was more a media blitz on a half cooked product that characterized the hight tech industry (Windows 7,8.. pe). Unfortunately the press has enormous power to create frenzy and bubbles and also panics which is what is happening to Apple. To much press and to much attention. Is would be better to fly low and let fundamentals talk and not dwell on new products that by the trend will disappoint not matter what, even if millions line to buy them.
    2 Mar 2013, 03:44 AM Reply Like
  • The problem is not that Apple still do not have more models of the iPhone it is what they said about others that have. They keep telling people their approach is the best and others is just a side show. Who do they think they are to tell customers what they should have and not let them choose for themself.
    I have said it before in Asia the most popular version of the smar phone is 5 inches and not too many will buy a top of the line phone that is less than 5 inches. Apple still laugh at others and keep talking about one hand? If Asians with an average hand size smaller than others wants a 5 inch phone that tell me the one hand theory is just apples ego and not fact.
    Now it may be too late for Apple to do anything.
    If I was Samsung if apple come out with a larger phone I'll put up ads to replay all those comments apple make about larger phones and mock them to shame.
    The market speaks the truth and AAPL is at a 14 month low today.
    2 Mar 2013, 04:09 AM Reply Like
  • Seriously? The market is "telling the truth"?


    No, AAPL is telling the truth - they are doing the best job, and making the most money at the highest profit margin.


    The market is babbling nonsense. Your harmonize well.
    2 Mar 2013, 05:22 AM Reply Like
  • Is this "the market" you're referring to?


    "... the top three top-selling smartphones in the world in terms of shipments for Q4 2012 are the Apple iPhone 5 with 27.4 millions, the Apple 4S with 17.4 millions, and the Samsung Galaxy S3 with 15.4 millions. "



    Apple's "obsolete" smartphone outsold the S3.


    "... Despite the doom and gloom talk surrounding Apple, its iPhone franchise has still vastly outsold Samsung Electronics' own Galaxy lineup.


    That's according to Raymond James analyst Tavis McCourt, who compiled the cumulative sales of the iPhone 4, 4S, and 5 and stacked them against the Galaxy S and Galaxy Note smartphones. In total, Apple outsold Samsung 219 million to 131 million. ...."

    2 Mar 2013, 07:40 AM Reply Like
  • 5 in. phones are to big, its a fade that won't last long
    2 Mar 2013, 09:01 AM Reply Like
  • My recent phone buying experience agrees with you..While ordering a new phone system at ATT, I asked the person helping me if he thought Apple was "losing its cool." He looked at me as if I had two heads !! He asked me where I heard such a thing. I noticed that the store was packed and he proceeded to tell me that 80% of the people being helped there would be purchasing Apple. I know they push the Samsung and other phones on all their promotions but this guy assured me that, in their experience, Apple is still #1 in every capacity....He also said that the Samsung phones they sell are returned quite a bit and the people pay a lot of money to switch to an IPhone..He was amazed at what people will pay just to switch phones. Somehow, I can't imagine those people buying Samsung ever again...
    2 Mar 2013, 11:09 AM Reply Like
  • Ah yes, the "this guy" storyline... All Apple has is "updated" versions of old products. But who knows? Maybe the iWatch will have laser beams and be able to spew out oil slicks...
    2 Mar 2013, 06:16 PM Reply Like
  • I hope you have hold appl all the way from 700 to 410
    2 Mar 2013, 11:17 PM Reply Like
  • I like how you put that, the "one hand theory." Probably the dumbest strategic move Apple could make in its smartphone business. It will pay for it, not now but give it six months and we will see how well the iphone 5s with its narrow screen competes against a whole breed of largers phones with beautiful larger HD displays. The apple advantage in ecosystem is negated by the small form factor. 4.7-5" phones are not "phablets" lake Galaxy Note, you can still hold them comfortably in one hand and you don't look ridiculous holding one up to your ear. However, you can now browse the net without straining your eyes or type without as many errors, both important for the majority of adults. There was a big lack of vision there on Apple's part given that smartphones are used more for browsing and apps than as phones. It will be at least until 2014 that Apple will correct that error since it apparently still doesn't believe it made one (the "one hand theory" commercials are still running). Meanwhile, people can see what's coming down the road and the stock is getting beat up even while the sales numbers look so good.
    3 Mar 2013, 12:14 AM Reply Like
  • I have...
    3 Mar 2013, 07:46 AM Reply Like
  • "No, AAPL is telling the truth - they are doing the best job, and making the most money at the highest profit margin."


    Until the sheeple who long APPL get their asses burnt and their houses repossessed, thus ending their stupor.


    Who else do you think are buying their phones apart from their (fast diminishing) cult following?
    4 Mar 2013, 03:03 AM Reply Like
  • "5 in. phones are to big, its a fade that won't last long"


    Famous last words?
    4 Mar 2013, 03:03 AM Reply Like
  • In Asia it is quite the reverse, telco stores no longer bothered putting up billboards advising customers which iPhones are in stock with the iPhone 5.


    They are all available and well stocked! Do come in and take your pick!


    And with the debt crisis in US worsening, I wouldn't really put too much stock into how well Apple phones are selling in the states. Said people might no longer be able to finance their phone contracts when they get laid off shortly.
    4 Mar 2013, 03:03 AM Reply Like
  • Surowiecki's article in The New Yorker is worth reading--especially now, when Apple seems to sink every day. It is good to reflect upon long-term Apple history, and companies DO exhibit personalities--just like people--consequently certain behaviors are somewhat predictable. I predict more innovation--as well as market adaptation--within the walled garden that will keep the satisfied Apple customer well within it.


    It is, however, presently quite painful to be a long-term investor (and especially painful for the short-term investor), and there has to be lots of sturm and drang within the Apple castle walls in Cupertino, as employee families struggle with diminished hopes attendant to diminished market returns. So I expect something significant to appear quite soon, in order to justify all of us holding on.


    Management is now on the defensive regarding doing something to distribute some cash, but an interesting development consequent to the Einhorn assault on the piggy bank is the amazing number of public interviewees who expressed strong positions supporting Apple using every dime for innovation! I think we are going to get both--some sort of stunner product announcement and some sort of powerful financial incentive to continue owning the stock--possibly a significant dividend increase, or even a stock split! All 3 would be the Trifecta!
    2 Mar 2013, 05:20 AM Reply Like
  • I feel consultnut is correct. Soon Apple is going to WOW the public. Be it with dividend money or a product. Put a phone in the mini Ipad (iphablet). Go Apple !!!
    2 Mar 2013, 06:25 AM Reply Like
  • I think any improvement will add to the company revenue. Evolutionary innovation is innovation. An iPad, iPhone y iPad were easy since a ready to copy competition was to arrogant a dismissed Apple. Now is not the case. I don't remember any breakthrough from Google since search, Amazon as a book online retail or Facebook as a social network platform. Why think Apple should revolutionized TV , a watch (the iPad Nano did it 3 years ago) or anything. Apple in itself is proven innovator. I am using the new iMac and is truly a unique. Many in the corporate world agree.
    3 Mar 2013, 09:08 AM Reply Like
  • For the share price to have sunk this low, Apple have definately been getting something wrong..........!!!
    2 Mar 2013, 06:55 AM Reply Like
  • Yes, it's called we're out of ideas.
    2 Mar 2013, 10:16 AM Reply Like
  • Sunk this low? The stock went too high last year. As usual, market greed drove the stock price sky high and now all the stupid pigs who bought it at $700 are crying "fraud!" because it's better than admitting they were stupid, greedy investors. Apple, currently, has a market value of over $400 billion dollars and another $100 billion in cash reserves. I, for one, am just waiting for the fruits of their R&D to be revealed. There was an interview with Steve Jobs, just before he died, where he was quoted as saying they had "solved" home TV viewing. I'm pretty confident that Apple TV is going to be the next "iPad event" coming out of Cupertino.
    3 Mar 2013, 03:29 AM Reply Like
  • Message to Apple Management. With the stock price at $430.00, it is time to massively repurchase shares. This would at least stabilize the price until you either come out with a new blockbuster product, quarterly report or dividend announcement. Since you are committed to $45 Billion of repurchase over 3 years, why not do it all now when the price is low.
    Message to Apple employees. There are 80,000 of you, and I am sure that many read these blogs. It is time for you to load up on your own stock, which will at least stabilize the stock price in the short run (or maybe begin a rally) until the next big thing. Right now, most of you have a (net) income'net worth loss since September 19th, 2012, and you can do something about it.
    2 Mar 2013, 12:07 PM Reply Like
  • you must be kidding me
    most apple employee including all their executives are selling stocks like there is no tomorrow.


    Why else do you think Apple want their executives to hold at least 3x their salary in stocks (which was given to them at $0) and remember their salary usually do not count the 100%yearly bonus or stock options or stocks given.
    2 Mar 2013, 11:23 PM Reply Like
  • I really dont thnk employees would be selling.. PE of 9.9 all that money in the bank its a growing grew in double digits last quarter.. and forecast by any conservative measure to do the same next quarter. addng no doubt another ten billion in cash to the cash pile.
    No sir the empoyees know what is in the pipeline and no one is selling
    3 Mar 2013, 08:03 AM Reply Like
  • Why would Apple employees "load up on these stocks"?


    I think a fair price for APPL is $250.
    4 Mar 2013, 03:03 AM Reply Like
  • @wshyang:


    I think you are clueless when it comes to valuing stocks.
    4 Mar 2013, 10:50 PM Reply Like
  • Apple is simply overboard in the media ship they built on being in the cool river. Confidence in the walled-garden is shaken and once lost, much more difficult to regain, or from occult to difficult, in this particular episode of cultural evolution. Awareness, growth and moving on is more likely, but not so fast.
    2 Mar 2013, 01:25 PM Reply Like
  • @gensearch2 thanks for sales statistics re Samsung and Apple handsets.
    2 Mar 2013, 02:56 PM Reply Like
  • Apple must behave like a "start up" and should continue to "disrupt." But that does not mean it must ignore market opportunities:
    (i) iPhone for more price conscious customers and(ii) big iPhone (aka phablet).If Apple does not do it, others (MSFT, BBRY, NOK) will. Samsung is altady there (Galaxy Note II).I have analysed the case for phablets here:
    2 Mar 2013, 04:24 PM Reply Like
  • Not introducing a phablet is NOT a mistake. Obviously they've done market analysis and found the loss of gross margins outweighs the gain in market share.
    2 Mar 2013, 05:25 PM Reply Like
  • Indeed, I look forward to an iPhone 5S Pro.
    4 Mar 2013, 03:03 AM Reply Like
  • I used to say the same things about Blackberry when Rim and Apple shared the same stock price, I though Blackberry would come back and wow us, it did not happen, Apple left Rimm or Blackberry as they are now called sitting in its dust.
    Steve Jobs is no longer with us is it possible that the core of apple also went with him.
    2 Mar 2013, 05:37 PM Reply Like
  • Well you CAN use your ipad as a phone, but you have to pay for the service. I use text free...for texting only since I am not going to pay for the phone part. They give you 10 mins a month free....then you pay for minutes as you would any other phone. Since I started texting from the ipad....I barely touch my phone anymore. Ipad is just so much better for us over fifty crowd that prefers the larger screen (and dont NEED to text every movement we make all day long).
    I think it is really the media that is tearing aapl down, but instead of worrying, I will just take advantage of it....if we see aapl in the 420s next week I will buy'll be back to 500 before years end for sure...making $80 a share in less than a year is fine with me. You wont be doing tha with MSFT...probably can with GOOG but its 2x the price of aapl right now....sticking with options on goog.
    2 Mar 2013, 05:37 PM Reply Like


    Those who truly believe in the Apple story should stop having emotional ups and downs based on the current price of the stock.


    The exaggerated swings are caused by the hedge fund wheeler-dealers who want only large swings, either way, to make their short-term killings. They should have been policed long ago by the SEC and DOJ (for instance: look at the cover-up on the billion dollar Ed Miller/Rochdale/hidden broker Apple short sale).


    It has been agreed, by many reliable analysts, that eventually the stock will exceed $1,000, be it 12 months or 3 years.


    So, shut up, drink your beer, and leave the driving to Cook !
    2 Mar 2013, 05:40 PM Reply Like
  • Looks to me like gensearch2 gave the numbers above to refute this market current.


    Fact-checking, in this case, showed that the report is not entirely factual. How about a stock disclosure from the author of The New Yorker? (Maybe SA could fact-check before allowing such market currents in the future)


    Odds are he is not an Apple shareholder. Samsung shareholder perhaps?
    2 Mar 2013, 05:47 PM Reply Like
  • It's completely factual. Check out unit share numbers from IDC, Gartner, and Strategy Analytics for Q4 (Apple's seasonally strongest quarter) for both iPhone/Android and Apple/Samsung.



    Samsung sells a lot of Android phones besides the S III and Note/Note II. And needless to say, there are a lot of Android OEMs out there other than Samsung. Huawei, ZTE, Lenovo, and Sony are all seeing growing Android sales.


    Have no idea what companies Surowiecki is invested in, but his column ended with an optimistic view of Apple's future. If his goal was to trash Apple for financial gain, he did a pretty bad job of it :).
    2 Mar 2013, 07:36 PM Reply Like
  • Check out the specs and reviews of the beautiful HTC One, coming out in March (Google Android OS). Puts iPhone to shame. Apple better respond.
    2 Mar 2013, 07:36 PM Reply Like
  • I believe htc one is similar to the htc dna which was release 3 months ago and I got one 4 weeks ago.
    My wife has an iPhone5 and I can tell you in general there is nothing the iPhone 5 can do faster than the HTC DNA. Also my wife still uses the apple map and it gives wrong direction about 10% of the time. We were in Sacremento yesterday and it tell me to turn left and I know I should turn right. She just told me to ignore the iPhone 5
    2 Mar 2013, 11:33 PM Reply Like
  • this Einhorn has one big ego,, he s now saying that he will drop the law suit. like it mattered.. he is a side shopw as Cook put it.. the guy s so over rated, every time you read anythng about him, it mentons only one thing, the lehman deal,,,now anyone can get lucky once even though he was lucky on a biggy,, or else he knew something more than everyone else. ie someone from the company could have told more than they should ,, I really dont know.. but he fund has performed really badly over a two year period in comparision t many many others so why is he given so much credence
    3 Mar 2013, 08:04 AM Reply Like
  • I had the first iPhone, then iphone 4 and then iPhone 5 for 2 months and switched over to Galaxy Note 2 and have been extremely happy. Apple refuses to believe that there is a BIG segment of users who love a larger screen at the expenses of a handed operation. You don't talk and need to dial with one hand operations but you need to read, view and interact with a larger touch screen. That's why 5M Galaxy Note 2 were sold in 3 months after introduction. Can Apple say that of it's aging iPhone. That's the same stupid Jobs mentality of not giving the user a USB port to transfer their files and make everyone go through iTunes. Pathetically stupid. I love my Surface Pro and gave away my iPads. Is that why Apple's stock continues to tank? Seriously ....
    4 Mar 2013, 08:11 AM Reply Like
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