iPhone 4S Prospects Light up Apple’s Holiday Season

November 8th, 2011 by Trefis Team
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The resoundingly positive response for Apple’s (NASDAQ:AAPL) iPhone 4S is starting to pay off as a recent report suggests that the 4S was the best-selling smartphone in October for Verizon (NYSE:VZ), AT&T (NYSE:T) and Sprint (NYSE:S) despite only being available for half of the month. The Apple iPhone 4 was also found to be among the three top-selling smartphones at each of the above mentioned carriers. [1] This comes just in time as the holiday season nears and as more customers are looking to upgrade their smartphones.

 

A string of recent announcements have stirred some doubt as to how Apple will match up as competition intensifies in the lucrative smartphone market. iPhone smartphone market share slipped in October as Samsung has overtaken Apple globally. [2] According to another report, Apple’s U.S. smartphone market share also slipped from 26% in Q3 2010 to 20% in Q3 2011, with HTC and Samsung gaining the most. [3] This could imply some tough times ahead for Apple though we believe that the 4S could help lift Apple’s holiday spirits.

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According to another report, costly hardware failures are more common on Google (NASDAQ:GOOG) Android devices than on Apple iPhones. [4] As such, the total costs of ownership to telecom operators are much higher for Android devices and totals upto as much as $2 billion.

We believe this is another positive news for Apple as operators start to realize the advantages of Apple’s mobile products, which could see operators promoting Apple phones more heavily in the future.

Our $500 price estimate for Apple stock is about 25% above market price.

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Notes:
  1. iPhone 4S now No.1 smartphone at top-3 U.S. carriers, iPhone 4 still hot, BGR quoting Canaccord Genuity’s checks as the source [↩]
  2. Strategy Analytics: Samsung Becomes World’s Number One Smartphone Vendor in Q3 2011, October 27th, 2011 [↩]
  3. HTC takes the lead in the US smart phone market, Canalys, October 31st, 2011 [↩]
  4. Android phone repair cost telcos billions: study, Reuters quoting WDS as the source, November 2nd, 2011 [↩]