Peter Oppenheimer’s lengthy presentation at the start of Apple’s Q1 2014 Earnings Report left me with some thoughts perhaps worth consideration by some readers:
- Mr. Oppenheimer’s remarks, from a rhetorical perspective, are built to argue for Apple to be seen by the investment community, not as a niche player looking for the very top of the available consumers in the smart mobile device market, but, rather, as the leader in the North American market for smart mobile devices
- Numerous examples of enterprise business customers, and Apple customers from comparatively sized organizations in the public and the not for profit sectors are included in the preface remarks by Mr. Oppenheimer. Are they included to convince the analyst community to take Apple seriously as a vendor to the same enterprise customer base once owned by Blackberry? I think so. Readers should also note how Mr. Oppenheimer included IBM® in his remarks, much like an appeal to an authority. Perhaps IBM should take a look to ensure rigor mortis hasn’t kicked in, and the continued presence of “fire in the belly”.
- His remarks included comparative statements about Apple competitors, but included no mention of Microsoft® within the first 14 minutes of the webcast. Rather, his comparison about contenders in the smart phone and tablet markets were focused on Android
- Mr. Oppenheimer cited the IDC mobile device market report, which was published coincidental with Apple’s quarterly report. Nevertheless, the news about the IDC report (I’ve not read the report as of the publishing date of this post) includes some points at variance to the dominant position Mr. Oppenheimer claims Apple “owns” in his remarks
Here are some quick thoughts on each of the above points:
- In response to point 1), above: Perhaps Mr. Oppenheimer’s remarks are correct today, January, 2014 as far as the reach of Apple devices into the mainstream of the North American market for what I refer to as “small, smart, mobile devices”, But I don’t think we will listen to Mr. Oppenheimer make the same claim a year from now. From what I’ve read of the IDC report, Android devices are the fastest growing segment of the worldwide mass market for smart phones. The ultra competitive price point for Google’s Moto G smart phone, together with Microsoft’s soon to close acquisition of Nokia (and the changes in strategy and likely new attention to the lower end of the world wide market for smart phones) will certainly have a negative impact (the extent of which will have to be determined over time) on Apple’s claim.
- In reponse to point 2), above: Certainly Apple must be taken seriously as a vendor of choice for enterprise business customers — but only for small, smart, mobile devices. As far as the software they now ship to enable enterprise customers to manage large communities of mobile device users, I would keep my eye on Blackberry (as Citron Research has pointed out) as a real contender in this space, with the footprint required to perhaps deliver a crushing blow to Apple’s aspirations to control this market.
I would also neither count IBM out of the market for MMS requirements, nor scoff at the improvements in market share Microsoft has likely achieved with the new Surface 2 products and the high end Nokia Lumia smart phones.
- In response to point 3), above: I refer, once again, to the IDC report, which notes a very strong force behind small, smart mobile devices powered by Android, world wide. I’m certain Mr. Oppenheimer has not fudged his numbers, or inflated his claims, but the future doesn’t look as promising as some of his audience might think.
I also think Google’s Moto G is a very strong contender to both Apple and Microsoft products in the same category. The price point is “too good to be true”. I eagerly await some word from Google as to how this product is selling in the North American market.
- In response to point 4), above: I have more confidence in what I’ve read about the IDC report than I do in the importance of the points Mr. Oppenheimer has framed around his reading of the results. I don’t think it makes much sense to argue for Apple as the leader in the mass market for these devices. All of the steps the company has taken (at least as written about in the news) are to fortify a position as the dominant device in the very high end of the market, which makes more sense, especially over the long term, at least to me.
Disclaimer: I have no position in Apple, but am long Microsoft.
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