South Korean electronics giant Samsung had to recall their Galaxy Note 7 units which are reportedly prone to catching fire. With more and more customers complaining about the Note 7, the company cancelled the production of its flagship mobile device entirely.
But while Samsung remains hopeful that customers will swarm over their other units – especially the Galaxy S7 – it looks like this huge blunder’s biggest benefactor are Apple Inc (NASDAQ:AAPL) and Chinese brand competitor Huawei.
According to KGI Securities analyst Ming-Chi Kou, who has been predicting Cupertino’s hardware details with a high degree of accuracy for years, the approximate 5-7 million cancelled Note 7 orders will likely turn to iPhone 7 Plus sales. Additionally, Kou reported that customers will probably lean towards Apple’s iOS and camera features. This is certainly good news to Apple and definitely not a good one to close rival Samsung. The iPhone units have become significantly more attractive and this shift will most likely convert to sales.
This recent report also exposed user’s loyalty towards a brand. It showed that customers display little loyalty to a particular brand and are easily swayed to jump to iOS. But this also remains subjective because some Note 7 users refused to return their units simply because of its exclusive features like the iris biometrics scanner.
However, it is still undeniable that Apple has the ball on their court with this one. They have the upper hand to seize the market given the fact that there are approximately 12 million Note 7 orders and when you factor in cancellations, Apple will most likely bag 50% of the customers while the remaining will be shared by other Android phone makers like Huawei.
Reports have shown that Apple shares have steadily increased in the last month, printing a 3.2% upside. It’s worth noting that some of that increase is due to the unfortunate setback of the Samsung Galaxy Note 7. Kou also stated that, given a few months, Samsung will be able to recover from the fiasco but he warned that another round of faults might destroy the trusted brand.
Apple is set to announce its fourth-quarter 2016 earnings after the market close on Tuesday, October 25. The Street expects the iPhone maker to report EPS of $1.65 and revenue of $46.9 billion. That would be $0.23 higher the $1.42 per share posted last quarter but $0.31 lower the $1.96 posted in the Q415. Revenue is projected to come in $4.62 billion lower than the $51.5 billion posted in the same period a year earlier. Meanwhile, EarningsWhisper.com reports a whisper number of $1.75 per share.
Apple earnings will of course include the much anticipated initial sales report for iPhone 7 and iPhone 7 Plus.
It should be noted though that Apple and other brands shouldn’t feel complacent. Google’s flagship, Pixel, is reportedly out of stock. The model seems to have become a preferable choice for ex-Samsung customers. Pixel boasts many superb features that Samsung phones are known for. Many customers are especially keen on Pixel’s impressive camera.
So until all these factors are accounted, no one knows for sure who the real champ is right now in the phone arena.