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Analyst: Apple Won't Experience Same Success in 2013

By - Source: Business Insider | B 20 comments

Android dominance has led to Apple having its market share decrease considerably.

UBS analyst Steven Milunovich has expressed his doubts in Apple replicating the same success next year it experienced in 2012.

In an investors note, he decreased his iPhone sales estimates for the March, June and September 2013 quarters by 5 million units in each quarter. Sales estimates for Apple's tablet, the iPad, were slashed by 2 million per quarter for the same quarters.

Milunovich now expects the company to sell 41 million iPhones during the March quarter, 36 million in the June quarter and 33 million in the September quarter. iPad sales are predicted to reach 21.7 million in the March quarter, 24.5 million in the June quarter and 20.7 million in the September quarter.

The analyst also decreased his earnings estimates for Apple for fiscal 2013 and 2014, as well as lowering the stock target price from $780 to $700. He referred to several reasons regarding his revised outlook: supply chain checks is said to point towards the manufacturing rate for the iPhone dropping to 25 million units for the March quarter.

While the iPhone 5 has just released in China, UBS's sources within the region have stressed that they believe it won't sell as well as the iPhone 4S performed in the Android-dominated market.

Another reason cited by the analyst is the lower-priced iPad Mini appears to be continuously cannibalizing sales of the larger and more expensive iPad. He continued on to state that his previous estimates were too aggressive when taking the lackluster economy in Europe and increased competition from other smartphones into account.

He did, however, offer some optimism for the once-dominant company. "We expect that China Mobile may start to sell iPhones in the Dec quarter, so a summer 5S with TD-SCDMA and fingerprint recognition is possible. Apple is driven to make beautiful products. Whether it is an iTV, wearable computers, or another new product category, we have faith that innovation is not dead."

Apple, which generated $156.5 billion in revenue during the fiscal 2012 year ($41.66 billion profit), recently experienced its largest share price decrease in four years, despite expectations tipping the company to become the first firm in history to be valued at $1 trillion after the iPhone 5's release.

So, what has exactly led to Apple's continuous decrease in market share in both the tablet market and smartphone industry, then? Android, for one, has proved its commercial breadth with devices such as Samsung's Galaxy S3 -- a device that alone dethroned the iPhone 4S' coveted title of the world's best-selling smartphone -- with Google's mobile operating system accounting for over 70 percent of the worldwide smartphone market, while iOS settled for a 13.9 percent share. It's also a similar outlook for the tablet market.

Analysts have continuously criticized the company's inability to innovate, with creativity at the firm "sputtering". These comments were also echoed by Apple's very own co-founder, Steve Wozniak.


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Top Comments
  • 21 Hide
    rahulkadukar , December 17, 2012 10:43 AM
    Zak writing something Anti Apple. The world really is going to end.
  • 15 Hide
    nieur , December 17, 2012 11:08 AM
    you need analyst to tell that?
  • 13 Hide
    tomfreak , December 17, 2012 10:22 AM
    the next news u get is windows 8 phone platform make Apple share shrink further. :) 
Other Comments
  • 13 Hide
    tomfreak , December 17, 2012 10:22 AM
    the next news u get is windows 8 phone platform make Apple share shrink further. :) 
  • 21 Hide
    rahulkadukar , December 17, 2012 10:43 AM
    Zak writing something Anti Apple. The world really is going to end.
  • 10 Hide
    saturnus , December 17, 2012 10:46 AM
    Did it see much success in 2012? Although it has seen a year over year stock increase, the value of the company have plummeted by 30% since the launch of the iPhone 5. And it's not surprising as the phone both showed being launched too early in the OS was still in beta version on release, and launched too late considering the market leaders giant head-start. On top of that Apple continued to go it's own way and not adopting accepted standards while at the same time showed lack of innovation in it's design strategy.

    By the same time next year, I consider it almost certain that stock prices have plummeted so much that Apple will no longer be the most valuable (single) IT company. (Note that there are several IT conglomerates far more valuable than Apple in absolute value).
  • 15 Hide
    nieur , December 17, 2012 11:08 AM
    you need analyst to tell that?
  • 9 Hide
    zzz_b , December 17, 2012 11:16 AM
    What a surprise!!! :o 
  • 8 Hide
    SmaugTD , December 17, 2012 11:34 AM
    Shocking!
  • -2 Hide
    halcyon , December 17, 2012 11:35 AM
    I really would like to see Apple correct the iPhone5's deficiencies.
  • 7 Hide
    john15v16 , December 17, 2012 11:56 AM
    Not shocking news at all...It was only a matter of time...If your going to sell equipment at a premium price then, make it worth the premium apple. Any who, I'm sure it hurt Zak to do his usual cut-copy-paste "article writing"...
  • 8 Hide
    stingray71 , December 17, 2012 12:49 PM
    Apple's prices are really going to hurt them. I was at Best Buy this weekend and hardly saw anyone around the Apple Tablets. Most were looking at the Kindle Fire HD's and other sub $300 tablets. Complete reverse of what I saw last year. Anecdotal I know.

    Starting to see more Android smartphones as well, especially Galaxy phones.
  • -6 Hide
    dthx , December 17, 2012 12:54 PM
    rahulkadukarZak writing something Anti Apple. The world really is going to end.

    As previously discussed, Zack's articles are not pro nor anti-apple. His articles don't state any personal or biased opinion. But one thing is for sure, his articles are always about Apple. I'd blame his lack of inspiration for that...
  • 0 Hide
    Anonymous , December 17, 2012 1:15 PM
    The trade-off between total control plus ease of use versus freedom of choice has finally caught up with Apple. All of their products are fantastic. They've created new industries and raised the bar in other industries. Competition is fierce. The people have spoken. People are creative by nature. Creativity can't be controlled behind Apples walls and dictated to the masses. That's not how you win mind-share. You do that by giving people tools at a fair price and letting them decide, and letting them create. They've got steady revenue, and a ton of cash on hand. If they listen, they will continue to thrive. If not, then they will repeat the Mac mistakes all over again (no matter how good the Mac is).

  • -5 Hide
    pacomac , December 17, 2012 1:49 PM
    The slow down in Apples sales is largely due to the influx of cheap tablets period. To get a genuinely competitive product for the iPad 4 you need to look at the Nexus 10, which really is no cheaper in price. At this moment in time I'd still go with the iPad as the Nexus simply doesn't have the graphics horsepower to match the display. People will compare their Nexus 7 (yes I own one) and their Kindle Fire (I own one of these too) and realise you get what you pay for, and whilst these devices are cheap they really don't perform nearly as well as the iPad.
  • 0 Hide
    redeye , December 17, 2012 1:56 PM
    Apple is DOOMED i say DOOMED! / sarcasm!
  • 0 Hide
    wlachan , December 17, 2012 2:05 PM
    Apple was peaked the day Steve passed away. What else is new?
  • 5 Hide
    amdwilliam1985 , December 17, 2012 2:17 PM
    Samsung and the Galaxy S3 are the Android Hero.
    Using my friends as a base, we have about 50% Android users this year comparing to 10% Android users last year. All thanks to Samsung, all of our Android users got Samsung phones(most Samsung Galaxy S3, and some Galaxy Note 2).
  • 2 Hide
    ericburnby , December 17, 2012 2:58 PM
    This is the same analyst who said in summer of this year that "Apple is building a tech empire" and that Apple "has not yet reached its zenith".

    Can anyone trust what he or other analysts say? Seems more likes news story designed to cues price fluctuations in Apple stock so a few people can make a quick buck.
  • 0 Hide
    jamesjones_det , December 17, 2012 3:41 PM
    I'm not an Apple fan, but I remember people saying this last year and the year before and then when Steve died. Yet Apple is still there making noise.

    I will agree that since Steve has passed I feel quality has slipped a bit at Apple, but I don't think Apple is going anywhere anytime soon personally. They are still the only real alternative to Android (sorry WP and BB fans). And much like BB they are pretty intrenched in businesses do to the weak security of Android (though with ICS they took a major step forward, but it remains to be seen if Google is really willing to prevent unlocking when businesses want it).
  • 4 Hide
    Solandri , December 17, 2012 5:32 PM
    saturnusDid it see much success in 2012? Although it has seen a year over year stock increase, the value of the company have plummeted by 30% since the launch of the iPhone 5.

    This isn't really unexpected if you've been tracking the numbers independently. Stock prices factor in both current performance and expectations for future performance. I've been saying for a couple years now that press coverage of Apple is unusually optimistic. Articles in the mainstream media always seem to be about how great Apple is doing, how it can do no wrong.

    I've been ignoring those talking mouths and crunching the numbers on my onw. It was pretty apparent Apple was badly losing market share to Android, but for some reason the press never reported this. Even when the numbers in an article showed Android growing faster than iOS both in terms of raw units and percentage market share, the articles invariably talked about how great Apple was doing (because its unit shares were still growing). Android's growth or market share was almost never mentioned.

    All that changed in 3Q2012. I don't know what changed, but suddenly the press started reporting more on Android's growth and how much better it was doing than iOS. The Galaxy S3 outselling the iPhone due to a timing fluke was part of it. As well as Samsung shipping nearly twice as many smartphones as Apple. And for some reason the iPad's market share dropping from 90% to 75% to 67% was never newsworthy. But when it dropped below 60% that got a lot of press, including speculation that it would dip below 50% in 2013.

    That seems to have woken up a lot of people from their reality distortion field-induced stupor. Previously the stock valuation was based on the assumption that Apple was on top and would always remain on top. Now most people know they're not actually #1, and although their sales and profits are rising their market share is falling. While Apple's current performance may be stellar, its future prospects are not as rosy, and the stock price has corrected as a result.
  • 0 Hide
    house70 , January 16, 2013 11:11 PM
    saturnusDid it see much success in 2012? Although it has seen a year over year stock increase, the value of the company have plummeted by 30% since the launch of the iPhone 5. And it's not surprising as the phone both showed being launched too early in the OS was still in beta version on release, and launched too late considering the market leaders giant head-start. On top of that Apple continued to go it's own way and not adopting accepted standards while at the same time showed lack of innovation in it's design strategy.By the same time next year, I consider it almost certain that stock prices have plummeted so much that Apple will no longer be the most valuable (single) IT company. (Note that there are several IT conglomerates far more valuable than Apple in absolute value).

    That pretty much sums it up.
  • 0 Hide
    house70 , January 16, 2013 11:22 PM
    Last summer Apple was the shizz, but no analyst could have predicted their iOS 6 disaster, the low-quality iPhone 5, and the success of new-gen Jelly Bean phones.
    That, along with Apple's attitude of "we never do anything wrong - at least, not until it blows up in our face" and constant patent-based bullying, is showing real results now. Did they really think all this bad stuff is just gonna fly under the radar?
    People are more critical nowadays, they have higher standards, and now the market is catching up to that.