Click to Skip Ad
Closing in...

Competition takes a bite out of Apple

Apple Earnings Preview Q2 2013

Apple (AAPL) is set to post its results for the second fiscal quarter on April 23rd and a new report suggests increased competition may have hurt Apple more than usual. Credit Suisse analyst Kulbinder Garcha said in a recent note to clients that competition is hurting Apple more than it has in the past, and he sees iPhone sales in the March quarter falling to 38 million units — though that figure is still up from 35.1 million iPhones in the same quarter last year

Moving forward, Garcha thinks competition will become an even bigger factor in Apple’s fiscal third quarter following the launch of Samsung’s (005930) Galaxy S4, shipments of which are expected to top 10 million in the phone’s first month of availability. For the June quarter, the analyst estimates that Apple will sell 31 million smartphones, up from 26 million in the year-ago quarter.

In line with a number of earlier reports, Garcha expects Apple to debut new iPhone models this summer and anticipation leading up to that announcement will put additional pressure on June-quarter sales. Following the next-generation launches, however, the analyst sees new carrier deals helping Apple in the coming years.

“Beyond the near term, we believe carrier expansion could add a further 65mn units to iPhone volumes, the timing of which is hard to predict but likelihood remains high,” Garcha wrote. “Apple may have a narrower lead on the hardware than in the past; however, it still retains an ecosystem advantage.”

Credit Suisse reiterated its Outperform rating on Apple shares with a $600 price target.

Zach Epstein

Zach Epstein has been the Executive Editor at BGR for more than 10 years. He manages BGR’s editorial team and ensures that best practices are adhered to. He also oversees the Ecommerce team and directs the daily flow of all content.

Zach first joined BGR in 2007 as a Staff Writer covering business, technology, and entertainment. His work has been quoted by countless top news organizations, and he was recently named one of the world's top 10 “power mobile influencers” by Forbes. Prior to BGR, Zach worked as an executive in marketing and business development with two private telcos.