So Apple’s growth has been slowing down, but exactly by how
much? and what about Samsung?
Apple’s (NASDAQ: AAPL) growth has been
slowing down but exactly by how much? According to its latest
earnings
release, the business still sells 420,562 iPhones, 218,843 iPads, 44,404
Macs and 63,295 iPods – all in a single day, every day, which is phenomenal to
say the least. But the extraordinary growth figures -- which used to pump its
stock price and hence its market cap – are now history. In fact, the quarterly
revenue growth is nearing a high single-digit number. The music is certainly
slowing down, but for its rival
Samsung (OTCMKTS: SSNLF) the party
isn’t over yet.
Two years ago, in Q2-2011, Apple reported growth of more
than 80%; in its most recent quarter, Apple barely managed double digit growth
as its revenue increased by just 11.27% to $43.6 billion.
During the quarter, Apple recorded an increase in revenue in
all of its geographic operating segments with Asia Pacific (excluding China and
Japan) posting the largest increase in sales while revenues in Americas, its
biggest market, increased by only 6.6%; last year, this figure was 41%. Back
then, Apple did not report China’s numbers separately as this market used to be
a part of its Asia Pacific segment. In Q2-2012, the biggest change came from
Asia Pacific region whose revenues increased by 114% or $5.4 billion. A year
later, in Q3-2012, the Asia Pacific region, including Greater China, showed
growth of just 12%. As is evident from the table below, Apple’s growth is
seriously slowing down in all of its markets.
In the previous quarter, none of the geographic regions
could manage to put a $1 billion increase in the firm’s top line, not even
Americas. The largest growth numbers have come from the European market whose
revenues have gone up by $993 million.
In Q2-2013, iPhone’s sales increased by just 3% to $22.9
billion as the number of units sold showed a modest growth of 6.7%. On the
other hand, iPad’s sales jumped by almost 40% to $8.7 billion as the number of
tablets sold rose 65% to reach 19.5 million units.
On the other hand, nothing seems to be stopping the South
Korean consumer electronics behemoth and Apple’s biggest rival Samsung. In its
first quarter,
according
to Strategy Analytics, the business shipped 69.4 million smartphones
representing an impressive increase of 56% from last year – that is 290 million
more than Apple’s total quarterly shipments of iPhone, iPad, Mac and iPod
combined.
Apple’s premium products have to compete with Samsung’s
enormous portfolio of smartphones that dominate the emerging markets which
makes it difficult for Apple to maintain its global market share. Samsung’s
market share in the smartphone arena has now risen to record levels of 33%
whereas Apple’s has shrunk from 22.8% in Q1-2012 to 17.9% in Q1-2013. In
essence, every third smartphone on the planet now is made by Samsung. The
business is now gearing up for the release of its flagship phone Galaxy S4 and
if it could overcome the supply side issues it is facing then its investors
might very well be in for another strong quarter.
However, the company’s revenue growth is also showing signs
of weariness. In the first quarter of 2013, its total sales stood at $47.8
billion showing a growth of 16.8% as opposed to a growth of 22.4% in the same
quarter last year.
In the last six months, Apple’s shares have plummeted by
30%. On the other hand, the shares of Samsung Electronics have risen by 14% in
the corresponding period on the Korean stock exchange. It will be interesting
to see where these two stocks go from here.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article.
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