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Could it be time to sell Apple Shares?

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Right Time to Pull Back Apple Shares and bank profit

Apple is a steadfast enterprise and has reaped nearly $40 billion in the past twelve months, not to mention, on September 9 it unveiled fresh products including the large display iPhone 6 Plus, iPhone 6 Apple Pay, and Apple Watch. 55 analysts covering Apple rate it a buy, 10 rate it a hold, and 3 rate it a sell. Believably, the analysts with he hold or sell rating are correct and at that point I would be taking profits if I were a shareholder. Not that I don’t fancy sporting Apple products, at times that can well be frustrating; it is more a function of the facts I am going to detail below as they relate to the share price which stagnates at $101.66, pretty within $2 of its all time highs.

Waning Profit margin

The graph below illustrates the downtrend in Apple’s profit margin is a since 2012. Profit margin is the ratio of net income to revenues. For every $1 of revenues Apple retains roughly $.21, which is down from $.27 cents in 2012, an apparent 22% decrease.

High profit margins denote that a company has costs within reins. Multiple reasons could attest to Apple’s inflated cost based on the suppliers that Apple uses and the logistics that piece everything together. While the graph shows Apple’s a slight improvement of .64% in 2014 profit margin, it still clearly falls below 2012 levels; it is still too early to detect if the growth is meaningful or sustainable.

Falling Return on Assets

Aside the declining profit margin since 2012, as seen in the graph, Apple’s return on assets has taken a noose dive. Return on assets illustrates the efficiency of a company in using assets to create profit; it is the ratios of dollars earned to the dollars of assets a company controls. Apple earns less on its assets, falling down to a little over 18% in 2014 from over 31% in 2012. This trend of decrease implies profitability is deteriorating.

Diminishing Market Share

The past three years has seen Apple’s iOS market share for smartphones take a downtrend, while the key competitor rise steadily. The table below shows a comparison of smartphone’s market share between Apple iOS and Android.

Evidently the consumer is ditching Apple for Android and the gap is widening. Here are a few possibilities that could be behind the exodus:

  • Costly Apple products – there are a vast options of inexpensive Android smartphones in the market.
  • Apple’s rigid and closed ecosystem – Android is open and has multiple manufacturers.
  • Frustrating customer experience –examples, iOS is incompatible with Adobe Flash, Apple iPad lacks USB port or needs expensive proprietary connectors.
  • Apple’s customization possibilities are limited compared to Android

Apple’s Lousy Product Launch

I had detailed in a previous article why the Apple’s September product launch was uninspiring and lacking of zest. Instead of unleashing groundbreaking products, Apple sought to catch up with rivals or unveil “me-too” products. For example:

  • With the wide screen iPhone 6, Apple wanted to catch up with Samsung and other Android manufacturers
  • The Apple Watch was a “me-too” release as five other manufacturers had already announced and showcased smartwatches.
  • Apple Pay is another “me-too” unleashed late behind the Google Wallet and CurrentC.

Conclusion

To emphasize what came at the beginning of the article, Apple is a great company piling lots of cash. Based on iPhone pre-orders, current Apple consumers are definitely trading upwards for larger smartphones. However, the profit deterioration metrics, added to unstable market share and the lack of creative new products in respect to Apple’s current elevated share price predicts a notable pullback in the shares and investors taking profits.

Android Silver: Google’s Answer to Apple’s Quality

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Android Silver could help Google take on Apple on battle for the Smartphone Market

There are unconfirmed reports that Google is working on a new operating system dubbed “Android Silver”, targeting the affluent, in an attempt to re-write the notion that ‘Android is for poor people’.

The move will be widely considered to be an attempt to tame Apple (AAPL), whose Smartphone brand (iPhone) has enjoyed unrivalled success. Already new data shows that Google’s Android has overtaken Apple’s iOS by market share, and according to data shared by Opera Mediaworks, Android is also expected to catch up in terms of mobile revenue by the end of the year.

The Crown Jewel of the Smartphone Market

iPhone, Android Silver, Smartphone, iOSiPhone controlled a chunk of the Smartphone market share, until Smartphones using Google’s Android operating system emerged. Currently Apple plays second fiddle to Android bestseller Samsung. Nevertheless, iPhone still leads in a variety of areas including mobile revenue, e-commerce and mobile payments.

Currently, Apple gets 75% of its revenue from the Smartphone market. Already Google Play app store has overtaken Apple’s iTunes as the app store with the highest number of downloads. But Apple is still ahead in terms of revenues from these downloads as its users often pay more.

It is widely believed that iPhone users shop for quality and opulence, and that is why they pay the high prices charged for iPhones. Indeed, it is true that iPhone is superior in terms of platform quality, but Android is slowly catching up. However, the perception that ‘Android phones are for poor people’ still weigh heavily on Android. As you read this, iPhone is still the crown jewel of the Smartphone market.

What People Are Saying About Android Silver Plan

According to reports posted by The Information last week, Android Silver is meant for high-end smartphones to compete with iPhone. Google will work with mobile phone manufacturers to produce high-end smartphones with a limited number of non-Google apps. These apps will be pre-installed, but the consumers will have the option to uninstall them.

There are also rumours that Google could be bringing in Android Silver to replace its Nexus phones. Nexus is Google’s four year old brand of pure Android operating system. The Android system used by different manufacturers have been customized by those who utilize it to fit their different needs such as own interfaces, browsers, custom apps, and services. Nexus is the basic Android. The introduction of Android Silver OS could also be an attempt by Google to dictate Android phone manufacturers to use Android with limited customizations, if any.

The Google Nexus Android phones are difficult to tell if they are really Android. This is because, unlike the normal Android phones that display Android at startup, Nexus phones display the makers’ names or just “Google”. So perhaps Google wants to do away with this feature since it wants to establish Android as its own brand.

Conclusion

Taking the fight to Apple won’t be easy, and this is why the California based internet giant is expected to spend a fortune on the Android Silver program. Rumours have it that the figure could be as much as $1 billion, only for marketing and support services for this new OS. But given what is at stake if the Android Silver system succeeds, this could be a small token.

Google might have finally found the answer to Apple’s iOS unrivalled quality. But there are more questions than answers about Android Silver that can only be answered by Google itself!

iOS Gradually Losing Ground to Google’s Android

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Apple Losing its Market Dominance at all Angles

apple, iOSAs shown by different research companies in Q1 2014, Apple (AAPL) is gradually losing its target audience to rival firms that are using the Android platform,. The company shipped 43.7 million units of iPhone and16.4 million units of iPad during the first quarter. According to research firm IDC, iPhone and iPad both shed more market shares they held a year earlier.

Elsewhere, another research company, Opera Mediaworks, has revealed that iOS is no longer the leading platform in terms of the size of the audience. According to the data, the number Android users who interact with mobile ads outnumber their iOS counterparts.

iPhone Shipment Increase but Apple Sheds Market Share

iPhone saw double digit sales growth in Japan and multiple developing markets such China, Brazil, Indonesia and India. Though Apple’s Smartphone market share dropped to 15.5% in Q1 2014, it is the first time the company has shipped 43.7 million units in a quarter.

Apple trails Samsung Electronics Co. (005930), which is still enjoying the top spot, thanks to its competitive pricing and the increasing capacity of the Google Play app store. The latter now controls 30.2% of the market, down from the 31.7% it had a year earlier. However, this figure compares well with the last quarter’s 28.8%. During the Q1 2014 quarter, the company shipped 85 million Smartphone units, up from 69.7 million in Q1 2013.

Since both Apple and Samsung market share dropped, but their respective shipment increased, it is obvious that other industry players are eating into their market shares.

Samsung threatens Apple’s Tablet Market Dominance

While Apple is still the dominant brand in the tablet world, Samsung is working hard to dethrone it. The Q1 2014 results showed that iPad sales dropped to less than a third of all the tablets sold in that period. In Q1 2013, the company had more than 40 percent of the tablet market in its grip. Only Samsung made substantial gains in the global tablet market, rising from 17.5 percent a year earlier, to 22.3 percent in Q1 2014. This represents tablet shipments which rose from 8.5 millions to 11.2 million units. So while Apple’s CEO Tim Cook still believes iPad has a great future, the company needs to worry more about Samsung, which is literally poaching its customers.

Mobile Advertising

Apple is not just losing its tablet market; almost all its businesses are under pressure. Until recently, Apple’s iOS was the leading operating system for mobile advertisers since it delivered not only the quality and a glossier platform with deeper engagement, but also a large target audience. Of all these four primary factors, the Google’s Android platform is now at par with iOS on two and has surpassed it in one.

According to Opera Mediaworks data, the traffic that resulted from 64 billion ads supplied to 500 million Smartphone and tablet users, 42.83% are Android users and 38.17% are from iOS. This was previously 31.26% and 44.53% respectively. However, on monetization of these users, iOS still leading with 52.7%, up from the previous 49.23%; Android on the other hand stands at 33.46, up from the previous 26.72%.

Conclusion

Google’s Android platform is an open source used by numerous developers, but iOS is only available to Apple. The number of developers at Apple cannot outwit the thousands of developers working on the Android platform. This is why the Apple’s Smartphone and tablet mark has been gradually dropping down. While iOS is losing ground to Android, Apple still pockets the lion’s share of the revenues from advertisement, because it is going it alone as a technological giant in the Smartphone and tablet arena.

 

Google Targets to Sell 330 Million Android TV Units By 2017

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Google’s top engineers are now entirely focused on the upcoming – Android TV. According to the company’s fascinating latest announcement, the annual sale of the TV can be expected to reach approx 330 million units by the year 2017. Google had a not so great experience with its previous launch – Google TV. The user interface was quite complicated than a common consumer would like to use. So, does the new product looks promising to Google this time?

It’s not like that Google will be the solo player in this product segment; but this time Google’s research with regard to product innovation and development will surely not disappoint the consumers. Google claims that consumers will see a much simplified user platform highly compatible for day to day handling. The main product features will be VOIP, Google Play Movies, touchscreen, camera, YouTube and Hangouts. Additionally, representatives from the company said earlier that Google doesn’t want to be forced to follow the industry trend. Perhaps this is why Google has decided to develop the Android TV on its own this time.
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Huawei Drops Dual Windows/Android Phone

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The Chinese Based telecommunication company Huawei drops joint operating system. There were plans to create a phone that supported the Microsoft Windows system and the Android operating system on the one device.

The company has announced that they have dropped this idea and are continuing to work with these operating systems separately. Most of the phones they make support the Android operating system.
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Google’s New Android Wear Will Empower Wearables: Smartwatch Will Be the First

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Google has transformed Android into an excellent Smartwatch friendly platform. Consumers will be able to use a much advanced technology as Google has announced a new feature pack version of its mobile operating system. It’ll be called Android Wear, especially made for the wearables.

The new version of the operating system soon be available in LG, Motorola, HTC and Samsung smartwatches. With this brand new launch from Google, technology loving people can expect to have a great range of product features. The most attractive one is its voice control system. This means, consumers will be able to control the main functions of the wrist watch through simple voice commands.
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Android Makes Significant Gains but iOS Continues to Bring in Ad Cash

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Application developers and advertisers continue to make more money from iOS compared to Android, a recent report has revealed. This is attributed to the iPad, which is one of the most popular mobile devices in the market. There has been an increase in the number of Android phones that are shipped across the globe and this is evident in ad the latest ad numbers. According to a study by Opera, ad impressions that are served to Android smartphones are way beyond the ones on iPhones. During the second quarter of 2013, smartphone traffic on these two platforms was equal. Each of them had 30% of the traffic. However, things changed in the last quarter and Android had 36% while Apple had 29%.

In spite of the obvious gains that Android has managed to make over the last few years, iPhones continue to be the biggest source of income for publishers and app makers. During the second quarter of 2014, iPhones ad revenue was about 36.4% while Android provided 27.76% of the revenue. In the last quarter, iPhones generated 40% of income while Android offered 30%.
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Google Makes Android Ready for Use in Cars

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Google Inc (NASDAQ:GOOG) is known for the fact that throughout the years, it has continuously expanded its limits and it is no longer only a search engine – it is a company that has started to specialize in a wide array of additional products and services. At the beginning of this year, the search engine giant has formed a new alliance in order to embed Android into the dashboard of your car, which means that Google is now the direct competitor of both Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT) in terms of dashboard operating systems.

Google has teamed up with Audi, Hyundai, Honda and other leaders from the automotive and technology industry, to come up with a well-designed strategy for embedding Android in the dashboard of vehicles. Other leaders from these two industries are welcome to join the alliance as well, if they want to work together for delivering a state of the art technological platform to drive innovation in cars.

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Android expected to Grow in 2014

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According to a new research, over 1 billion devices with Google’s (NASDAQ:GOOG) Android OS will be sold in 2014. Especially in the emerging markets there will be more low-end Android devices be sold, this will outpace high-end devices such as the iPhone and iPad.

The Android system is used in Samsung and Sony devices among other companies. The growth is expected to be by approximately 26% from 2013, reaching over 1.1 billion users in 2014. By 2017, Gartner expects the sale of Android devices to have increased by 75%, particularly in the emerging markets.
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