Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your mid-day market update for Wednesday, the 13th of March.
THE SMARTPHONE WARS - WHO IS GOING TO WIN?
Samsung is pulling out all the stops today with the launch of its new smartphone, the Galaxy S4. It has been reported that Samsung is spending upwards of $440 million to launch and promote this product. This is in contrast to the $330 million Apple spent on its iPhone launch. The stakes could not be higher as both companies are engaged in a global battle for command of the $400 billion mobile device industry.
How is Samsung's new phone, with its bigger screen and aggressive pricing, going to be a game changer in the smartphone wars? Already Samsung has a 29% share of the world's smartphone market and is considered the leader over Apple, who controls a 21% slice of the pie. The two companies are similar in one respect and very different in the sense that Samsung runs on the Android system developed by Google (GOOG), where as Apple runs on its own IOS system. In regards to the quality, the manufacturing build of the Apple iPhone has the edge, in my opinion. The quality of the Samsung smartphones have not been up to par to Apple, however the functionality of the Samsung phone has been a very robust experience for most Android phone users. My techie son-in-law purchased a Samsung phone and really likes it. For my own personal taste, I use an Apple iPhone 4S, and I have to admit it has become a part of my daily routine and life.
That leads us to the BlackBerry 10. Today, BlackBerry just won its biggest vote of confidence yet with a massive order for the Blackberry 10 next-generation operating system. The company said Wednesday that an “established partner” had agreed to buy 1 million BlackBerry 10 devices. This is without question the biggest single purchase order in BlackBerry’s history, according to the company. That is good news for Blackberry, but does this former market leader, whose fortunes and stock have dropped dramatically, have what it takes to climb back up the mountain? The BlackBerry phone still seems to have a loyal following, particularly outside of the US. The new phone is well constructed and has an adequate ecosystem of apps. BlackBerry was the number one phone for business use not that long ago. Can it come back and regain some of its former glory?
We will be analyzing all three of these smartphone makers to see where they stand trend wise using our Trade Triangle technology.
BLACKBERRY (BBRY)
APPLE (AAPL)
SAMSUNG (Stock not traded in the US - Suggest using the ETF (EWY) which tracks the SOUTH KOREAN INDEX - Samsung makes up 225 of that index) (EWY)
IS EUROPE IN TROUBLE AGAIN?
We have been negative on the Euro for some time, based on our intermediate-term Trade Triangle. It would appear as though the Euro can continue its downward path perhaps to the 1.24 to 1.25 area. As we mentioned yesterday, Italy's three-year borrowing costs rose to the highest levels since December. This was in large part due to the downgrade that the ratings firm, Fitch, gave to Italy last week. Italy is one area we have serious concerns about given the political instability we see in the country. Italy is the third most indebted country in the world after Japan and the United States.
IT'S GETTING CLOSER - CHAOS AHEAD
March 27th - Budget Resolution Expires
May 19th - Debt Ceiling Suspension Expires
Have a great trading day,
Adam Hewison
President, INO.com
Co-Creator, MarketClub
Apple has a strong market position, and as you can see, they try to protect their market power in every single small positions. E.g., which you can easily follow, looking at the patent disputes to combat even the round edges at competitors' product.
They will not be able to totally protect their market. Apple will stay in front line of course, but in Asia, I guess, the market power of competitor products should not be underestimated. Apple has of course the front nose with respect of smart design, but design and customer perceptions might change during time.
I wouldn't touch anything Google (or Samsung, for that matter) with a 10-ft pole.
When it comes to "smart" phones, clearly Apple has the edge (and has broken-in the market anyway) while the others are just trying to mimmick Apple's innovation -- for roughly 10 years now and without too much success, at that...
Don't get me wrong, as a Linux techie I am well aware of Apple being just as greedy a big global corporation as every other player in that field, with all their Defective-by-Design DRM technology and quite disgusting software patent policy, use of unsafe Nanotech ingredients etc etc. Still, if you have followed the history of computing you'd just have to reject anything Microsoft, Google or similar altogether and stick with the real innovators in the industry. Samsung/Google or Microsoft -- let alone Blackberry/RIM -- are definitely NOT among them!