Posts in category Industrials
In the following couple of months Samsung is going to open “Samsung Experience Shops” in over 1400 Best Buy stores ( NYSE: BBY ). The value of the best Buy stock raised 16% after this announcement. A required step, you might say, with the iPhone exceeding in 50% market share in the United States within the previous year and estimates reflecting this fact. Soon the initial set off the Samsung experience shops will open and it’s going to be around 460 ft.² mostly in the entry area of the Best Buy shops. There will also be “Samsung Experience Consultants” assisting the customer. The whole concept reminds not just a bit of Apple stores. This is very good news for potential investors about to buy apple or samsung shares and wondering how they will perform in the near future. For both Samsung and Best Buy, this maneuver seems to be an obvious win. Analysts stated, that the stock of Best Buy has really moved ahead of the fundamentals of the corporation. Regarding the whole mobile device market, Samsung has made great improvements and kept getting closer to catching up with Apple ( NASDAQ: AAPL ) during the past couple of years. But Apple’s strong position in the US market did not make that easy. Their formidable retail profile (around 250 Apple stores in the US alone) has always been a major obstacle for Samsung. We have yet to see if the Samsung experience shops will be capable of delivering the same type of expertise people are used getting from Apple. But the enhanced Samsung US retail store profile will surely break some of Apple’s predominance in the US, which is based on their massive retail store presence to a great extent.
Investors are concerned as they don’t see the same hype as iPhone5 building around an iPhone6 which might be launched in the fall of CY13. This has led investors to ask-“What next?” We continue to believe that Apple (NASDAQ:AAPL) will have considerable value going forward also. Apple being the innovative giant it is, we won’t be surprised if it launches yet another chain of products as it has done with introducing the first mac, the first iPod, the first iPhone and the first tablet (Maybe Apple is researching iAppliance in some secret lab!). As we can’t know what is going inside the headquarters of Apple right now, we will be talking about the strategies that could help Apple deliver in the future after the launch of iPhone5. To begin with, we expect that Apple will be providing iPhone 4S, its recently outdated model at a much lower price in the developing markets after the launch of iPhone5. We have seen this in the past as Apple has provided its 3GS 8GB phone at $375 and we expect to see it in the future but at a much lesser price point. We believe that this kind of offering would accelerate Apple’s share gain in the emerging markets and consequently increase investor confidence in the sustainably of Apple’s overall growth. While offering outdated models at lowered price might result in a downside to the ASP’s for Apple, we believe that Apple would ultimately benefit through the volume growth in the price sensitive developing markets such as China. We also believe that a low cost iPhone would provide Apple with an opportunity to fight with low-price smartphone manufacturers like Samsung, Nokia (NASDAQ:NOK) and HTC in the developing markets. With Apple already having a majority stake in US (Around 50%), this move could position Apple to increase its standing in the emerging markets also. Furthermore, we continue to believe that Apple will announce a smaller 7-8? iPad along with the iPhone 5 later this year. We continue to see significant growth implications for Apple with this launch. While we believe that the financial implications for Apple will be minimal as Apple might have to enter at a lower price, the strategic implications far outweigh the financial ones. We believe that the major portion of the tablet market that Apple doesn’t own is currently made up of 7? tablets. Thus, if Apple can capture 50% of the 7? tablet market, which should be achievable given Apple performance and past track records, the company would further strengthen its utter dominance in the growing tablet sector. We believe that Apple with its entry into the lower price segment is trying to maintain its leadership position in the tablet market and prevent competitors like Google (NASDAQ:GOOG) and Amazon (NASDAQ:AMZN) from increasing their market share. We believe that this move might also increase up-sell opportunities for Apple as Apple products have shown higher level of stickiness with users with intent to repurchase in the past. While there are rumours in the [...]