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Apple's iPhone Phablet Will Pose A 'Serious Threat' To Samsung's High-End Market

Apple's iPhone Phablet Will Pose A 'Serious Threat' To Samsung's High-End Market

Samsung's (OTC: SSNLF) dominance could be threatened if and when Apple (NASDAQ: AAPL) decides to expand its smartphone lineup.

The Cupertino, California-based tech giant has been rumored to release a larger iPhone for more than a year. Many analysts agree that 2014 will be the year that Apple finally ships its first phablet.

TrendForce, a market intelligence firm, estimated that Samsung shipped 80 million smartphones in the fourth quarter. This is higher than TrendForce's estimate for Apple, which puts the company at around 50 million units shipped.

Samsung's overall numbers may be high, but the proportion of high-end devices has declined significantly. According to the TrendForce, high-end smartphones represented 38 percent of Samsung's total smartphones shipped during the second half of 2013. During the first half, high-end devices represented 50 percent of the Samsung smartphones that were shipped to retail.

This decline is being partially blamed on Samsung's decision to push low- and mid-end smartphones.

Apple, which was once expected to release a low-cost smartphone, has yet to release a low- or mid-end device. The iPhone 5C may be cheaper to produce, but the contract-free MSRP starts at $549. That was notably higher than the $300 to $400 price tag that some analysts anticipated.

Regardless, Apple has managed to achieve higher-than-expected sales for the iPhone brand, including a record-breaking 33.8 million units sold during the September quarter.

TrendForce analyst Wilson Miao thinks that Apple has the potential to perform even better in 2014.

Related: Apple's 2014 Rumored Lineup

"The competition between Samsung and Apple will be more intense as the latter releases its larger display smartphone this year," Miao told Benzinga. "This will pose a serious threat to Samsung's high-end market."

Even so, TrendForce predicted that overall smartphone sales will decline by 5.1 percent during the first quarter.

"4Q13 inventory issues and anticipation towards the new models from [the Mobile World Congress] are dissuading sales channels and telecom carriers from making further orders," said Miao.

TrendForce believes that the sales decline is "normal for products that are becoming increasingly more mature."

"The new model announcements in MWC 2014 will allow the smartphone sales to improve once more," Miao added.

This year's Mobile World Congress is scheduled to run from February 24 through February 27. Samsung is rumored to announce the Galaxy S5 at the event.

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.

Posted-In: Apple comments Galaxy S5 iPhone iPhone XLAnalyst Color Analyst Ratings Tech Best of Benzinga


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