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  • Industry Analysts Continue to Deliver Bad News About Apple

    March 13th, 2013

    So what market share do you expect the iPad to keep over the next five years? Despite being wrong on more than a few occasions, IDC suggests share will drop from an estimated 51% in 2012 to 43.5% as of 2017. Now that’s not bad for a single company, particularly when you compare the numbers to dozens of companies building all sorts of Android tablets in loads of configurations. But you wonder whether such numbers have any substance.

    The first problem, one I’ve mentioned before, is that Apple reports actual sales to real people. Many other tech companies speak of shipments, without letting you in on how many of the units shipped are actually sold and not just held in stockrooms or returned to the manufacturer. Unfortunately, industry analysts such as IDC are not explaining this distinction.

    Then again, IDC also predicted that Windows Phone would surpass the iPhone by 2016, and there is no evidence whatever, so far, that Microsoft’s mobile platform has any such potential. As it stands, it’s still all about Android and the iOS, and the rest of the platforms appear to be going nowhere. That being the case — unless there’s some miraculous change in Microsoft’s prospects — I’m not inclined to take IDC very seriously.

    Now you wonder why IDC’s numbers tend to show Apple in an unfavorable light, true or not. After all,  the market research company is owned by International Data Group (IDG), which also publishes Computerworld, PCWorld, Macworld and other publications and services that have provided accurate coverage about Apple. IDG even runs the annual Macworld | iWorld Expo.

    But I suppose it’s possible that IDC is changing its tune, since the tablet survey doesn’t reveal much love for Microsoft, which it predicts to manage market shares no better than the single digits over the next few years. That’s just dreadful. The way Windows 8 has fared so far, I’m not at all surprised.

    I’m also concerned about the media’s blind acceptance of these surveys, seldom mentioning how wrong they’ve been in the past.

    So much for IDC.

    Now when it comes to other estimates of Apple’s performance, there’s a published report citing Jefferies, an investment firm, as asserting that there’s a 25% chance that Apple will miss its quarterly guidance for this quarter. Hence the price target for AAPL has been lowered from $500 to $420 per share. But doesn’t that mean there’s a 75% chance that Apple will meet or exceed that target? Just asking.

    There’s yet another story, this time in the Wall Street Journal (link not deserved), where the alleged commentator in question complains that the next iPhone, the presumed iPhone 5s, won’t ship until September, as if that’s a bad thing. If that’s true, and no such product obviously has been announced so far, it would only be in keeping with the usual annual upgrade process. The non-existent cheap iPhone will supposedly cost between $350-$450. But remember that the iPhone 4 is already available, unlocked, for the upper part of that range, so it would appear nothing will change.

    Except that it seems the article was written by someone just talking through his hat, without any real facts to go on, but that’s nothing new when it comes to the quality of Apple coverage nowadays. It seems that one false or misleading story just piles upon another. It’s hard to know which way is up when you read that stuff, and I try to take it all in at one time, so I can spend the rest of my day concentrating on reality, or what passes for reality. And, no, I’m not going to mention the iWatch, which remains a phantom product.

    Unfortunately, discussions of this sort can create a sort of bunker mentality. It’s Apple users versus the reset of the world, the sort of condition that existed for many years until Steve Jobs rescued the company. While there doesn’t seem to be much evidence of missteps or severe sales problems, Apple is again perceived as a beleaguered company that somehow survived due to the sweat, guts and genius of one man. Now that he’s gone, nobody else at Apple is capable of running the company. The slightest failures are viewed as major missteps, and Apple must atone for them, and follow the demands of the media and certain industry analysts to set things right.

    It doesn’t matter that other companies in far worse situations appear to be getting a pass. Take, for example, Microsoft. Windows 8 sales aren’t exciting customers or even the PC makers. The Surface tablets haven’t taken off, and Windows Phone, despite some positive interface niceties, is not on the short list for potential smartphone buyers. In other words, Microsoft is in deep trouble if things aren’t fixed, but that’s not important. It’s all about Apple.

    What about Samsung’s warnings of upcoming profit pressures, as more and more cheap hardware is sold, where earnings aren’t as high as, say, sales for the Galaxy S III? What about the fact that Samsung’s profits last quarter were several billions of dollars lower than Apple on only somewhat lower revenue? Isn’t that a problem? No, Samsung is destined to win the smartphone wars. Sure, Samsung sells more phones than Apple, but Apple earns 69% of the profits. The rest of the handset makers barely compete when it comes to actually making money.

    Yes, it’s easy to adopt a bunker mentality, a feeling that Apple is being preyed upon because of success, not failure.



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