A Tale of Two Giants
- January 28th, 2014
- Apple Financials
- Alex Brooks
Today Apple announced the results of its fiscal first quarter of 2014, the period of time running from October to the end of December. This is historically Apple’s largest quarter, obviously because it incorporates the massive holiday shopping season, and this one didn’t disappoint. Apple breached more records than normal; setting record quarterly revenue, record iPhone sales, and record iPad sales. However it isn’t all up and up, and what about Samsung, how are they fairing?
Apple today announced quarterly revenue of $57.6 billion, on earnings per share of $14.50. That figure is up year-over-year from $14.36 purely because there are less shares on the market, Apple’s buyback scheme continues to be huge with over $7 billion dolled out to shareholders in the quarter gone alone. Earnings were however entirely flat staying at $13.1 billion—hardly chump change I might add.
What about Samsung? Well Samsung’s picture is definitely not as pretty but it’s not entirely easy to understand why. Two reasons for this are that Samsung very rarely breaks out product detail, if at all. The other problem being that Samsung is an absolutely ginormous company making everything from smartphones, watches, TVs, fridges to the very components that enter many of Apple’s devices.
However there is a picture available for Samsung’s quarter, earnings fell 5.4% to 7.2 trillion won ($6.7 billion USD), not great news and forecasts from Samsung aren’t much better. The true picture is in Samsung’s Mobile Division though (seriously, that’s about as detailed as it gets) which remained flat at 5.47 trillion won ($5.04bn), slipping 18 percent sequentially a record 6.7 trillion won. Samsung predicts that first-quarter smartphone shipments are expected to rise at a “mid single digit” rate from the fourth quarter, while tablets are forecast to gain at a “high single digit” pace.
Samsung’s next flagship Smartphone is due to the market in April and analysts are hoping for something more impressive than what the Galaxy S4 has managed to pull off. Estimates from Daewoo Securities Co. suggested that Samsung sold just 9 million S4 units between October and December, Apple just announced sales of 51 million iPhone models with ASP suggesting the mix shifted highly towards the more expensive iPhone 5s.
Apple has however entered one of Samsung’s big territories in big style recently. Apple’s deal with China Mobile meant that devices went on sale after the closer of the first fiscal quarter for Apple but will show a sharp increase in iPhone unit sales but can they compete with Samsung’s larger displayed devices?
Both Apple and Samsung are facing continued pressure from each other and the wider market. Where the two absolutely destroy any of their nearest smartphone rivals (Apple’s accessories revenue eclipsed HTC’s entire company revenue last quarter) they are beginning to see slowing growth in key regions and struggling to expand into new ones.
Apple will need new product categories and variation to tackle the slowdown in earnings, unit sales are climbing but for the iPhone are now in the single digits year-over-year. Samsung on the other hand is looking at tumbling sales of smartphones and continues to pour money into marketing efforts for a plethora of tablet and wearable devices with little result to show.
2014 will make for an interesting year for both these giants.