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TMCNet:  Apple keeps it crisp before product launch

[August 30, 2014]

Apple keeps it crisp before product launch

(Observer (UK) Via Acquire Media NewsEdge) 'Wish we could say more", reads the typically gnomic line on Apple's invitation to an event on 9 September. Observers and analysts expect a larger-screened iPhone and some sort of "wearable" device. Watch? Fitness tracker? Mobile payments adjunct? Stockbrokers might wish Apple would say more, though they do pretty well from it even when it doesn't. The stock keeps hitting record highs, propelled by a combination of leaks from the company's Asian supply chain and expectation about the wearable thing sprinkling something extra on the giant cake of profits.


Apple's apparently unstoppable share price might look like the "greater fool" dynamic in action. Its profits growth has stalled. The iPad has seen sales fall for two quarters. The purchase of headphone maker Beats for $3bn looks like a mismatch of a music-oriented business with a consumer electronics one.

Staying with the bigger picture, the iPhone generates about 50% of Apple's revenue (and possibly more of its profits). Even here, though, smartphone prices are falling as manufacturing expands, and phones running Google's Android software make up more than 80% of those sold. Apple's share of smartphone sales droops every summer, from a 17% high at Christmas to 12%.

But smartphones are taking over the market: as many now sell every quarter (around 300m) as in the whole of 2010, so Apple's shrinking share is still an expanding number. About a tenth of all mobile phones sold are iPhones, and the forthcoming unveiling is expected to boost that further, especially in Asia.

And Apple has another secret weapon: loyalty. Research group Kantar found that 93% of iPhone owners planning to upgrade are most likely to get an iPhone. That's miles ahead of Android.

Analysts, rivals and journalists might wish Apple would say more. But until the numbers start turning sharply downward - as with Samsung's smartphones suddenly stuttering in the second quarter - silence is still golden.

(c) 2014 Guardian Newspapers Limited.

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