Will These Latest Numbers Hurt Apple Stock Investors?

Apple (NASDAQ: AAPL  ) investors may already be on edge as of late, with the company's stock down about 20% from a year ago, and profit down over $2 billion this past quarter, year over year. Although Apple recently announced share repurchases, and boosted its dividend by 15%, many Apple stock investors aren't satisfied.

To top it all off, the latest numbers from Canalys show that Apple's arch rival, Samsung, shipped 82.2 million smart devices in Q1 2013, taking up 26.6% of the worldwide smart device market, while Apple took 19.3%. Surprisingly, Microsoft (NASDAQ: MSFT  ) took the No. 3 spot with 18.1%, mainly becuase Canalys considers smart devices to be smartphones, tablets, and notebooks.

The numbers aren't exactly detrimental to Apple, but they should still concern investors. For a while, Apple held tablet and smartphone dominance, but its grip is starting to wane.

On the tablet front, Apple has lost some of it luster, but still maintains a 46.4% market share. The problem is that the iPad lost ground to Android units for the third consecutive quarter, even while Apple's tablet sales have increased 65% from its previous quarter. The iPad Mini is driving the increased sales, but with the product already firmly in the market, its hard to imagine where Apple is going to make significant gains in tablet market share in the near future. The Mini's $329 price allows other companies to severely undercut Apple in price, and gobble up more market share.

In the all-important smartphone segment, Samsung managed to grow its unit volumes by 64.3% compared to Apple's 6.7% growth – Apple's smallest smartphone shipment growth since the original iPhone launch. All of this increased Samsung's smartphone market share to 32%, leaving Apple with about 17%. Yes, Apple shipped 37 million iPhones in the quarter, but declining market share isn't something to be ignored. 

Over the past few years Apple has experienced a huge increase in premium smartphone competition, and with the recent Galaxy S4 launch, Samsung has shown no signs of easing the pressure. 

What Apple needs
Apple is obviously still an extremely important player in mobile, and it's not even close to being pushed out of the smartphone and tablet space. But these latest numbers show that global consumers have warmed to other device makers, and Android's iron grip is getting stronger – with the OS accounting for 59.5% of all smart devices shipped.

The combination of Samsung's increase in shipments outpacing Apple's, along with Apple's falling margins and mobile market share, isn't welcoming news for investors. For Apple to reverse the trend, it's going to need a major change with the iPhone ­– meaning an overhaul and a cheaper version – so it can win back some its lost market share. The tablet market won't be as easy to gain ground in, unless Apple decides to lower the price of the iPad Mini and squeeze out some of the competition. It's certainly not out of the realm of possibility, but with the Mini's lower margins, it's not a move that Apple would take lightly.

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Comments from our Foolish Readers

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  • Report this Comment On May 11, 2013, at 5:20 AM, MarcMiami wrote:

    Please address causation in one of your articles: that is the arrogant but sluggish and complacent management at Apple.

    Delayed product launches, shortages and apologies,,,combined with a vision- less, arrogant and close-minded management style...

    5 billion for new headquarters? Changing IOS to flatter--when this is one of the distinct Apple attributes? I can go on and on--but Cook must be removed!

  • Report this Comment On May 11, 2013, at 5:47 AM, lrd555 wrote:

    Microsoft Windows has a 90% plus market share in the PC market. And who cares?

    Apple shipped 37 Million iPhones, 19 Million iPads and 5 million ipod touches last quarter. That totals 61 Million iOS devices.

    Based on that your market #'s don't add up.

    Go pee on someone's else's leg and tell them it's raining.

  • Report this Comment On May 11, 2013, at 5:56 AM, lrd555 wrote:

    For all readers put there- don't believe these skewed #'s. This site is probably being paid by Google or Samsung to intentionally mislead you.

    Like the Bloomberg reporter that intentionally misquoted a CEO as to iPad mini demand.

    All bogus crap.

  • Report this Comment On May 11, 2013, at 8:32 AM, Stkspeculator wrote:

    Hmmm, let's see, should I follow the advice of a Motley Fool Contributor, Chris Neiger, who doesn't have a stake in any of the stocks mentioned, or dozens of billionaire Hedge Fund managers, who have $Millions of their own and client money at risk in Apple?

    Let's take it one step further, the stocks mentioned above were Apple, Microsoft and Samsung. What do you invest in Chris, and why are you here?

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