A common refrain from analysts in regards to HTC Corp (TPE:2498) and Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) — as well as Apple Inc. (NASDAQ:AAPL) — is that the high-end of the smartphone market is becoming saturated, Apple Inc. (NASDAQ:AAPL) isn’t seeing it. Speaking on a conference call with analysts, CEO Tim Cook dismissed the idea that the high-end smartphone market is nearing saturation. Indeed, Apple Inc. (NASDAQ:AAPL) seems to be in a bit of trouble as far as the sales and prices of its two key products (iPhone and iPad) are concerned. iPhone and iPad both played a significant role in its growth since 2009.
Apple iPhone facing consistent decline in ASP
Apple Inc. (NASDAQ:AAPL) is slowly but consistently losing its pricing power, as iPhone and iPad are both facing consistent decline in prices and in Q3 FY 2013, they hit their all-time low. The iPhone sold for an average of $581 (8% decline since FY 2010), and an iPad sold for an average of $436 (34.5% decline since FY 2010).
Apple – China Mobile deal challenges
Apple Inc. (NASDAQ:AAPL) CEO Tim Cook met with China Mobile Chairman, Xi Guohua in China. While there have been reports of discussions between Apple Inc. (NASDAQ:AAPL) and China Mobile Ltd. (NYSE:CHL) (HKG:0941) since early 2012, with no deal in sight recent catalysts such as Apple’s poor performance in China and an impending low cost iPhone give reasons to believe that a breakthrough is around the corner. Zabitsky believes that China Mobile Ltd. (NYSE:CHL) (HKG:0941) is not a panacea for Apple’s declining profits. China Mobile knows the cost of handsets and has ultimate purchasing power. Apple Inc. (NASDAQ:AAPL) will need to sacrifice on price and gross margin to get this deal done, whether it is for iPhone or iPhone mini.