Friday, 06 September 2013 10:39

Samsung Follows Footsteps Of Apple, HTC, Nokia - Wasn't That Quick? Featured

I believe I was one of the first financial types to extol both the virtues and the potential of Samsung in the handset space early on. Way back in the days of (3 years ago) the Galaxy S2 I said that Samsung, with the assistance of Google's Android, will eat Apple's lunch. Those who don't regularly follow me should reference  and Deconstructing The Most Accurate Apple Analysis Ever, to wit...

Well, nothing lasts forever and I've said it before, and I'll say it again...


You have to keep innovating in the mobile handset space or your margins will start dropping and your product will be commoditized. This is guaranteed! Paying subscribers should feel free to email me about this if they have any questions. Institutional and professional subscribers are free to call me and chat in depth as well. 

I've written several articles on this topic, with Samsung, Apple, RIMM, NOK and HTC used as prime examples:

n early 2010 I warned on Blackberry (then RIMM), with market share loss to Android being the prime determinant... . I put significant data out in the public domain to illustrate my point and put explicit price points out for subscribers, ie. RIM Smart Phone Market Share, RIP? Was I right?

Blackberry market share vs margin correlation analysis


, it's impressive. This tech is moving lightning fast and the price points aren't budging, although the margins are collapsing in this fast moving space.


The Apple Profit Engine Has Stalled & Is Rolling Downhill

Apple is facing a shart decline in the margins of its top two value drivers. May I also add that these two value drivers are 83% of Apple's revenues and an even greater portion of its profits. Such a drastic concentration in only two products who have reached their zenith is not a good thing!

Click the graphic once to view, twice to enlarge to printer quality...

Reggie Middletonss Ultimate Apple Value InfographicReggie Middletonss Ultimate Apple Value InfographicReggie Middletonss Ultimate Apple Value Infographic

Of course, there is a point at which Apple is a good buy. After all, they have a lot going for them. The question du jour is, exactly what is that point? I refer my subscribers to the research documents below for the answers... 

The following articles explain margin compression in what seems like market leaders:

  1. Looking Through Windows To See The Big Data On Fruit - Or Aug 7, 2013 - ...and this was exactly as predicted in Samsung Will Be Ready To Do ThatFruit Thing ... and Smartphone Hardware Manufacturers Are Dead 
  2. Samsung Will Be Ready To Do That Fruit Thing ... - BoomBustBlog Mar 7, 2013 - applecutsabreandriod3d Two and a half years ago I declared in my mobile computing wars series that Google would commoditize the mobi...
  3. Apple Gets Sliced and Diced As Google Enjoys Fruits Of Long Jul 25, 2012 - First things first, those who still believe Apple can walk on water are setting themselves up for a big one. I haven't received so much flak abou...
  4. Blackberries, Apples & Fruit Borne Successitis May 27, 2013 - Blackberries, Apples & Fruit Borne Successitis - The Problem With the original trajectory of the original vision, which was to make the thing an 

I queried in the very recent past, "Have We Reached "Peak Premium Smartphone"? Google is commoditizing the entire portable computer space. They can do this because they benefit regardless, as long as the masses are moved to the cloud. See
  1. Android Now Outselling iOS? Explaining the Game of Chess That Google Plays in the Smart Phone Space

Proof of this is found in the very moderate, "evolutionary" progression of the Samsung Galaxy Note 3.Being a proponent of these high end Samsung products, there's not a lot that would prompt me to change from my LG Optimus G Pro to the note, and that should make Samsung very nervous. From a functional perspective, Sony, LG and HTC likely have it beat - as well as some Chinese manufacturers. That's pretty quick seeing as Samsung just made it to the top last year. Yes, like Apple, Samsung can ride its consdierablbe brand recogntition for a couple of years, but the end of the day, it will have to continue to innovate. The Galaxy Gear smartwatch is also equally unimpressive. There just doesn't seem to be enough practical innovation or usage argument to warrat a purchase from a high end user such as myself.

The functionality of the Gear smartwatch, like most smartwatches that I've seen seem to be akin to a solution searching for a problem to solve. Contrast this to the truly revolutionary, game changing, paradigm shifting Google Glass and you will get the picture.

Crowdfunding and Investing In Wearable Computers and Google Glass Projects – Table of Contents (click on any link to access)

Introduction to Reggie Middleton and the Contextual Computing Project

Old School vs New School, Wearable Computers Send The Keyboard & Laptop The Way Of The Dodo Bird 4m 42s

How Big Is The Market For Wearable Computers & How Much Money Can Be Made? 5m 26s

Why Focus on Google Glass? 7m 41s

Restaurant Glass? Contextual Computing For The Hospitality Industry 9m 35s

Watch Us Change The Way The World Computes 12m 50s

Glass In The Healthcare Industry 14m 20s

Glass In The Real Estate Industry 27m 43s

Addressing Security & Privacy Issues 31m 29s

What Does Reggie Plan To Do Next 33m 37s

Call To Action for Investors, Operators & Customers: How Can You Get Involved? How Can You Benefit From The Next Big Thing, Today? 34m 29s

Long story short, the only company that is positioned to come out on top of this hardware battle is Google, at least thus far. 

Subscribers, see also... 

Subscribers, download the Q3 2013 valuation reports (click here to subscribe).

The update from two months ago is also of value for those who haven't read it. It turns out that it was quite prescient!

  1. File Icon Apple 1Q2013 update - Pro & Institutional (Technology)
  2. File Icon Apple 1Q2013 update - Retail (Technology)

Related reading...

Wednesday, 17 July 2013 10:50

Options Trading - Using a Risk Reversal on Apple

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