The month of September marks the end of yet another quarter in the books of several smartphone and tablet manufacturing companies, with some, like Apple Inc. (NASDAQ:AAPL), closing their current fiscal year, while others, still have one more quarter before they can record actual performance for the year.
Nonetheless, even at the current stage, it is quite easy to identify the potential winners and losers for the year 2012, as the industry becomes too hot for the likes of Nokia Corporation (NYSE:NOK) and Research In Motion Limited (NASDAQ:RIMM) to handle.
Additionally, the industry is also attracting new players; some from the deteriorating PC industry, like Microsoft Corporation (NASDAQ:MSFT), with its Windows Surface tablet, and search engine giant, Google Inc (NASDAQ:GOOG), which also acquired Motorola Solutions Inc. (NYSE:MSI) for the same quest; with its Google Nexus 7 tablet.
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According to a survey conducted by Jefferies Equity Research, the high-end devices market continues to lose customers to the mid-range devices market, while the mid-range devices market loses its customers to the low-end market, and so on. Contrary to this, more consumers are joining the the class of customers, classified as smartphone owners, with the technology taking charge in influencing people’s way of life.
Therefore, we ask, what could be causing the shifting trends that seem to be drifting customers to cheaper devices? Well, economic conditions around the globe are not that impressive, and competition, including price wars, is heating up, as some manufacturers competitively price their devices.
The first notable trend is the manner in which demand for the newly launched iPad, has dropped, as Google’s Android powered Nexus 7 continues to attract more customers. Additionally, the newly launched Amazon.com, Inc. (NASDAQ:AMZN) Kindle Fire HD tablet, as featured in one of our articles, is priced at a discount of $200 compared to its comparative counterpart from Apple Inc. (NASDAQ:AAPL). This tablet is also eating on the demand for Apple’s iPads.
This is perhaps one of the reasons Apple Inc. (NASDAQ:AAPL) has moved on to prepare a cheaper iPad of its own, the iPad mini. Nonetheless, the scenario is not repeated in the case of the new iPhone 5, as Jefferies predicts at least 10 million unit sales by the end of September. Additionally, the equity research firm notes that the supply bottlenecks for the new iPhone 5 are not as bad as initially feared.
Jefferies equity research also believes that Microsoft Corporation (NASDAQ:MSFT)’s Windows 8 OS has a better chance of succeeding in the market, when compared with BlackBerry 10. However, the equity research firm is of the opinion that the PC makers are likely to take some time and observe how it fares in the tablets and smartphones, as far as demand is concerned. The company will be announcing the launch of Windows 8 OS on October 28, with OEMs anxiously waiting for the occasion. Jefferies notes, “OEMs are unsure about overall W8 demand and unsure which form factors will sell the best”.
Major Highlights Jefferies Equity Research Surevey
The U.S accounted for 55% of the population, with the U.K., Germany, and France, being represented by 15% each. Findings showed that tablet sales remained solid, while PC sales weakened. Research in Motion, on the other hand, continued to struggle, with the research firm cutting down its shipment estimates for the BlackBerry maker.
A majority of the participants were either optimistic or neutral with regard to pricing and smartphone volumes, as compared to the previous quarter. Additionally, just as expected, Apple and Samsung are the top selling brands, with Samsung leading for the September Quarter, while Apple was very much in charge of the May/June quarter.
In terms of customer satisfaction, Apple Inc. (NASDAQ:AAPL) and their arch rival, Samsung Electronics Co., Ltd. (LON:BC94), share the spoils of 35% each for the September 2012 quarter, with the latter commanding a huge lead for the May 2012 quarter. HTC Corp (TPE:2498) comes in third in both occasions, with 12 and 10 percent, respectively.
The survey also assessed the likely candidate for the third ecosystem, after Apple’s iOS and Google’s Android, with Research in Motion’s BlackBerry 10, Microsoft Corporation’s Windows 8, and some others, standing on near equal odds, with just over 30% each.
In terms of demand, Samsung seems to be the most sought after, with Apple Inc. (NASDAQ:AAPL) coming in second for both the May and September quarters. However, this is indeed subject to change, going into the December quarter, as iPhone 5 rolls out in more countries.
Interestingly, not many customers are asking about LTE phones, actually, of 80% of the population polled, only 25% of the customers showed interest in LTE enabled phones, with less than 5% of the population indicating that 50-75 percent showed interest.
The smartphone and tablet industry continues to attract interest from all quarters, including companies, consumers, and investors. It is also one of the best performing industries at the moment, in the U.S. stock markets, except for a few other sectors, as exhibited in the various gains in share prices for the various companies.