Apple Inc. (NASDAQ:AAPL)’s stock price may be taking a beating from weak sales of Samsung’s Galaxy S4, according to analysts. On Monday the company’s stock price dipped below $400 per share again briefly, and now it’s possible Wall Street is shorting the stock because of Samsung’s weakness.
Samsung’s Loss Should Be Apple’s Gain, But…
This is an interesting effect because it would seem as if weakness in Apple’s leading competitor would be good for Apple Inc. (NASDAQ:AAPL), but that doesn’t seem to be the case. Speaking on CNBC, Bernstein’s Toni Sacconaghi said one of the things the company has working against it right now is Samsung’s weak sales.
At the end of October, the value investor Mohnish Pabrai gave a presentation and took part in a Q&A session at Boston College and Harvard Business School on the Uber Cannibal Investor Framework, which he has developed over the past decade. Uber Cannibals are the businesses “eating themselves by buying back their stock,” the value Read More
Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) released its Galaxy S4 handset earlier this year, and it just isn’t doing as well as it was expected to do. Analysts have been downgrading Samsung as a result of the handset’s weak sales. Samsung shipped 10 million units in less than a month, although Samsung itself had set a target of between 14 million and 15 million.
Brian Blair of Wedge Partner said the company has reduced its production for the Galaxy S4 for the third quarter of the year. He said estimates were reduced from 40 million to 30 million for the third quarter and for the full year from 100 million to between 85 million and 90 million.
Apple And The Samsung Effect
So what do Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930)’s problems have to do with Apple Inc. (NASDAQ:AAPL)? Since Apple and Samsung both address the high end smartphone market, Wall Street may be thinking that they face similar challenges. In other words, if Samsung is struggling, then Apple Inc. (NASDAQ:AAPL) must be struggling too.
Investors have been less than inspired when it comes to Apple Inc. (NASDAQ:AAPL) lately, so many of them may just be looking for another reason to doubt the company. Apple Inc. (NASDAQ:AAPL)’s next earnings report will be an important indicator of its progress, but most investors and analysts are hanging their hope on the company’s future products.
We’re due for a new iPhone this fall, but if Apple can’t deliver it on time, there may be more tough roads ahead, at least until the company’s next iPhone does make an appearance. And even then, investors are looking for something that pops as they hope that there’s a very good reason for making Apple fans wait for the next iPhone model.