I think Apple is slowly losing market share in the smartphone business. I see more and more people buying Samsung Galaxy S3. Many of Apple’s iPhone users I know have converted to S3 ever since it was launched end May 2012. I have statistical evidence to show that this is the case.
My class consists of 24 people. Before S3 was launched, 10 out of 24 people were using iPhone. This was 42% of the class. After S3 was launched, this number dropped to six out of 24. This now represents only 25% of the class. Four out of 10 or 40% of the iPhone users have converted to S3. Taking it a step further, a total 17 out of 24 use Android devices (Samsung, HTC, Motorola and LG). This represents 71% of the class. One of them is using Nokia and the rest of the six are using iPhone as stated earlier. Even though the sample size is small, I think what I have observed in my class is representative of what is happening around the world.
When S3 was launched, I saw in Facebook many of my friends showcasing their latest catch. I remember one of them, a Navy friend during National Service, previously was a iPhone user as well. Even in the trains, which I use to commute to school everyday, I see more and more S3 users. On a side note, isn’t it timely that Apple has sued Samsung for patent infringement? If Apple does not see Samsung as a threat, it would not bother pumping in so much money to sue a “small fry”. Apple is being threatened and it is doing all it can protect its market share.
Even though the number of iPhone users may be going down, the stock price seems to defy gravity. It became the largest company ever by market capitalization on 20th August 2012. The price has been rising on anticipation of the latest iPhone 5 that is rumoured to be released next month.
What I mentioned above about my class, my Facebook friends and the daily train rides is a method of research called “scuttlebutt” and it was coined by Philip Fisher. Scuttlebutt means researching about a company or industry by observing what is going on around you. Apple’s stock price might be going up but what is going on around me does not seem to justify the increasing price. Is Apple’s stock becoming a bubble? Will the new iPhone 5 revive Apple’s market share? Only time will tell but I strongly believe there is a divergence between the stock price and reality.