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Apple Is Set to Soar

- By Akshansh Gandhi

Apple (AAPL) and Samsung (005930.KS) are undoubtedly the biggest players in the smartphone industry. However, due to its massive size, the smartphone industry is gradually becoming crowded, with many small players entering the market with different offerings. Chinese companies such as Xiaomi are growing at a faster than expected rate. Despite the competitive nature of the market, it looks like Apple is set to dominate the industry once again.


Apple recently launched its new iPhone 7 devices, which gathered a lot of attention primarily due to the underwhelming performance of the iPhone 6S. As a matter of fact, the design of iPhone 7 models is same as that of previous model, but the company has made some significant changes in its new iPhone 7.

The screen size of the iPhone 7 Plus model is 5.5 inches with sharper display, packing a pixel density of 401 pixels per inch compared with the 326 pixels per inch of the smaller model. Apart from this, the most significant thing to notice is the use of dual-camera setup that permits users to use a true optical camera.

According to bgr.com, the iPhone 7 is becoming a more successful as well as popular device compared to the analyst lower expectations. Moreover, pre-orders for the company's iPhone 7 devices totally blew outlooks at carriers such as AT&T, Sprint, etc.

Furthermore, it is well known that Samsung is the largest competitor of Apple mainly due to its high-end Galaxy S series. A few months ago, Samsung launched its new flagship Galaxy S7/S7 Edge, which outperformed the smartphone market, and managed to become the world's best smartphone.

Recently, Samsung launched the Galaxy Note 7, skipping the Note 6, to compete against Apple's new iPhone 7, which turned out to be very controversial. Despite Samsung's best efforts, the Note 7 failed to compete against iPhone 7 due to battery issues that were causing problems across the globe.

Samsung tried to solve this issue by announcing a recall as well as publicizing an upgrade, but that too was not able to solve the problem. As an outcome, Samsung announced that it will halt the production of Note 7.

Apple stands to benefit from this fiasco as analysts haven't really factored the production halt of the Note 7 into their estimates and Apple could soar on the back of a stunning quarter.

Final words

Although it once looked like the iPhone 7 was going to be another underwhelming phone, the significant improvements in the device, along with the Samsung fiasco, have opened many new opportunities for the Cupertino giant. As a result, I think Apple is a buy heading into the earnings season.

Disclosure: No position.

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This article first appeared on GuruFocus.


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