Retailers, gadget makers, and consumers alike anxiously wait all year long for a single shopping-palooza of a day: Black Friday. Today will officially kick off the busy holiday shopping season that will last through the end of the year, and it can potentially make or break some companies' fiscal years.
In this day and age, gadgets top the wish lists of kids. Don't just take my word for it, though. Market researcher Nielsen recently released the results of its annual survey on what the youth are yearning for. Apple's (NASDAQ: AAPL ) iPad tops the list in both age brackets, but perusing the results shows a clear predisposition toward tablets, smartphones, gaming consoles, and other mobile gadgetry.
Let's look at the prospects of mobile device vendors and see how they may fare.
There are two incredibly important products for Apple this holiday shopping season: the iPhone 5 and iPad Mini. Both were launched within the past two months and will be incredibly important in driving Apple's financial performance in the fourth quarter. Both devices have also been plagued by supply constraints and are having trouble keeping up with soaring demand, which is a good and bad problem to have.
Apple is looking at an all-time record quarter in terms of revenue, guiding to $52 billion in sales up top. Product shortages are easing so investors could have a monster quarter on their hands.
Struggling gadget maker Nokia (NYSE: NOK ) has also just launched a pair of new smartphones running Microsoft's (NASDAQ: MSFT ) new Windows Phone 8 operating system. In the U.S., the company's frontrunners this season will be the Lumia 822 on Verizon (NYSE: VZ ) and the Lumia 920 and 820 on AT&T (NYSE: T ) . The Lumia 920 is the current flagship, and Ma Bell has scored exclusivity on the device for reportedly six months.
The Lumia family represents Nokia's future, built on Windows Phone, and the company is pricing the higher-end handsets aggressively at $100 on contract. When Lumia launched a year ago, the lineup comprised just 5% of Nokia's smartphone sales. That figure has now risen to a whopping 46% of its smartphone units.
Lumia needs to do well this quarter otherwise investors may call for CEO Stephen Elop's head.
Google and Android
With Android now powering 75% of smartphones sold worldwide, Ice Cream Sandwiches and Jelly Beans may wind up in many a stocking. Google (NASDAQ: GOOGL ) has dramatically expanded its Nexus brand this year with its Nexus 4, 7, and 10 devices, built by LG, Asus, and Samsung, respectively.
These gadgets offer a "pure" Android experience free of third-party modifications from hardware vendors or wireless carriers, which appeals to Android enthusiasts. Beyond Google, Samsung continues to leverage Android with incredible success and is now the top mobile phone vendor in the world. The South Korean company's Galaxy S3 and Galaxy Note 2 will probably be hot sellers this season, along with the Nexus 10 that sports an even higher resolution than the iPad with Retina display.
HTC just launched its Droid DNA on Verizon with an incredibly high-resolution screen. The 440 pixels per inch is arguably overkill, but the new smartphone may tempt some Android buyers away from the slightly older Galaxy S3.
Thanks to Amazon.com's (NASDAQ: AMZN ) aggressive gadget lineup that spans a wide range of price points, its Kindle Fire HD tablets are destined to be a hit this quarter. The e-tailer has now expanded its tablet strategy and started shipping a larger version as well as one equipped with 4G LTE.
By now, investors know not to expect official unit sales figures from Amazon, but they can expect Amazon to tell them later on that the Kindle Fires were the "No. 1 best-selling item" and that it sold "millions." Of course, the company will also go on to sell many a stocking stuffer, since it is the e-tail king and all.
With its brand-new Surface tablet, Microsoft (NASDAQ: MSFT ) is hoping to get in on some tablet action this season. However, the device has gotten a lukewarm reception and a "modest start," according to Steve Ballmer. Looking at Nielsen's figures, the Surface ranks pretty low on kids' wish lists, with only 3% of the 13+ age bracket interested in the tablet.
The company's Xbox 360 remains the top gaming console in the U.S., so it should sell well. For example, last holiday quarter Microsoft saw Xbox 360 unit sales skyrocket over threefold sequentially from 2.3 million to 8.2 million. Gaming consoles are a relatively low-margin, low-unit business though, so Microsoft's financial upside there could be muted.
Mr. Softy does have its fingers crossed that Windows 8 PCs will be a popular gift.
Research In Motion
The Canadian company is most certainly going to be sitting on the sidelines this holiday shopping season. Research In Motion (NASDAQ: BBRY ) is launching its next-generation BlackBerry 10 operating system in January, right after the festivities die down. The only products that RIM will be offering will be its PlayBook tablet and smartphones running BlackBerry 7, its aging operating system.
RIM has been talking up and building BB10 for literally years, so even the most loyal BlackBerry fans that are intent on buying into the new platform are still going to wait until next quarter to do so.
'Tis the season to make or break the bottom line
Of these companies, RIM is bound to do the worst as its major product launch won't be until after the new year. Microsoft and Nokia may fare a little bit better, but their prospects are more uncertain as Windows 8 and Windows Phone 8 are crawling out the gate.
The big winners this holiday will be Apple, Google, and Amazon. Apple has just upgraded nearly its entire product lineup and expects new products to drive 80% of its record revenue this quarter. Google has an army of OEMs spurring the proliferation of Android along with its own Nexus devices. Amazon simply sells everything under the sun.