A number of analysts believe that Apple Inc. (NASDAQ: AAPL) has sold fewer of its new iPhone X flagship than its management projected. That by itself has rattled some investors. Samsung, Apple’s primary rival, has launched its new iPhone killer, the Galaxy S9. If sales of the new Samsung smartphone are strong, Apple’s iPhone X sales will be dented.
The Samsung S9 and the larger S9+ version have a number of features the new iPhone has. Its dual aperture lens may be as good as or better than the iPhone X feature that is similar. The Samsung has AR Emoji stickers, which have become very popular with consumers. The Samsung Galaxy 9 has a facial recognition feature like the iPhone. It also has high-end Dolby Atmos stereo speakers.
The price of the Samsung Galaxy S9 and S9+ are not very different from the iPhone 8 and iPhone X. The S9 is priced at $719.99 and the S9+ at $839.99.
Several press reports and analyst figures forecast that iPhone X production could be as low as 20 million in the first half, down from 40 million last year. This would be a catastrophe for shareholders. Apple’s stock, up 28% in the past year, almost certainly would slide on very bad iPhone news. The advance in the price has slackened this year. The stock is only up 2% to $176 in 2018.
Apple has not had any meaningful competition to either the iPhone 8 or iPhone X. Obviously, that has made picking up market share across the high end of the smartphone market easier than at times when it was up against direct competition from Samsung. Samsung, because of its size and global reach, is Apple’s only real competitor, and it has hurt iPhone sales in the past.
One of the most depressing pieces of news recently for both Apple and Samsung is that smartphone sales declined at the end of last year. They had grown for well over a decade. A major research firm reported:
Global sales of smartphones to end users totaled nearly 408 million units in the fourth quarter of 2017, a 5.6 percent decline over the fourth quarter of 2016, according to Gartner, Inc. This is the first year-on-year decline since Gartner started tracking the global smartphone market in 2004.
Apple and Samsung each held about 18% of the market for the period. As the market plateaus, they will need to take sales from one another to grow. That means the iPhone X is already up against headwinds, and Samsung’s Galaxy S9 will make the situation worse.