Daily Management Review

Why 2018 is a turning point for Apple and Samsung


03/28/2017


This year, the two leading smartphone manufacturers, Apple and Samsung, will be introducing flagship devices. Perhaps, these presentations will become a turning point for both vendors. The market is fed up with mobile products, including premium solutions. Soon, there simply cannot be people who are ready to buy an expensive phone.



Kārlis Dambrāns via flickr
Kārlis Dambrāns via flickr
Samsung will be presenting its Galaxy S8 very soon, on March 29. The new gadget is expected to charm all fans of the South Korean brand, as well as to distract them from the debacle with Galaxy Note 7 and increase sales and revenue of the mobile unit. Otherwise, Samsung will face big problems in addition to the scandals that have already erupted.

The largest of them occurred recently, when in March Deputy Chairman of the Board of Directors of Samsung Lee Jae-yong was taken into custody due to suspicions of giving bribes. The South Korean corporation rejected the bribery charges brought against the company during investigation of the corruption scandal. The investigators concluded that actual head of Samsung bribed Choi Soon-sil, a friend of South Korean President Park Geun-hye, in exchange for the government's support of the corporation's business.

On the day when the court ruled to arrest the top manager in connection with his involvement in the corruption scandal surrounding President Park Geun-hye, Samsung Electronics’ quotations dropped, resulting in a market capitalization of 1.12 billion won (about $ 980,000).

Vice Chairman of Samsung Electronics Oh-Hyun Kwon on behalf of the company apologized at the annual meeting of shareholders for scandals related to impeachment of President of the Republic of Korea and recall of Note 7 smartphones.
 
The new flagship Samsung is designed to ease tension relative to the company's products. However, it is unlikely that the scandal with ignition of Note 7 can quickly be forgotten. It is expected that the new premium smartphone will be released in two versions: Galaxy S8 and S8 Plus. They differ only in the display diagonal and the body size: 5.8 and 6.2 inches. Design and specifications will be the same for the two models.

As for Apple, the company is also going through difficult times. At the end of 2016, Apple’s revenue amounted to $ 215.6 billion compared to $ 233.7 billion in 2015, and iPhone sales has been falling for three consecutive quarters. All this causes analysts and investors to doubt Tim Cook’s ability to introduce innovations in the company. The company introduced only one new product - Apple Watch – under its management. Media rumored about an unmanned car, as well as augmented reality glasses (which, by the way, Cook compared in size and importance with smartphones), but the final product did not come. Even the existing flagship iPhone 7 is still criticized for its lack of "innovation" compared to 6S.

However, it cannot be said that everything is bad in the company from Cupertino. Sales of smartphones during holidays were rather gratifying, and for the three-month period closed on December 31, 2016, Apple's revenue was $ 78.4 billion, which was the highest quarterly indicator in the company's history.

Apple's shares have grown since the beginning of the year by 15%, and 50% from lows of the first half of last year. The company's papers also jumped in early February after Goldman Sachs analyst Simona Jankowski raised target level of Apple's shares to $ 150. In her opinion, upcoming celebration of 10th anniversary of the iPhone will be accompanied by a presentation of an augmented reality technology, which will spur demand for the gadget on the oversaturated smartphone market.

source: reuters.com






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