There is no getting around certain axioms which define humanity. Bluntly put, life is not fair. Take Apple Inc. Or, rather, take APPL. Both are much loved and much hated. Apple has more than a billion well satisfied customers who keep the repeat purchase train moving on time. APPL has coughed up increased value over the past couple of decades, more under CEO Time Cook’s watch than co-founder Steve Jobs’ tenure, and continues to deliver unnecessary and undeserved dividends to shareholders.
Yet, both Apple Inc. and APPL have been pummeled in the stock market, and ripped to shreds by the growing minions of critics; nattering nabobs of negativism, and members of the technorati elite politburo.
Who has it worse than poor old Apple?
Yeah, that Samsung. After Apple warned investors that it would miss last quarter’s revenue guidance (but, oddly enough, Tim Cook didn’t say a word about profits), giant conglomerate Samsung hit the streets with a warning of its own– far worse than Apple’s revised guidance.
Samsung Electronics recently warned that its fourth-quarter revenue and operating profit would miss analysts’ expectations by a wide margin, mainly due to weakness in its memory chip and smartphone businesses.
Like Apple, Samsung is a hardware business. When people stop buying iPhones, Samsung suffers. Yet, it’s worse for Samsung when people stop buying smartphones, refrigerators, freezers, washers and dryers, personal computers and tablets, computer chip and displays, and, well, you get the idea, right?
Samsung sells hardware gadgets and appliances. Samsung also sells components to other manufacturers, and when their sales take a hit– and that’s what’s happening in the market now; it’s not just China– then Samsung’s business takes a bigger hit than Apple.
The South Korean tech giant expects its revenue to fall 11% year over year to $52.8 billion for the quarter, compared to the consensus estimate of $56.1 billion. It expects its operating profit to drop 29% to $9.7 billion, which was also less than the consensus forecast of $11.8 billion.
Make no mistake about it; even in hard times Apple and Samsung are wildly profitable, and in the smartphone industry alone, the two combine to take over 75-percent of industry revenue and profits– the downfall is nearly double Apple’s revised guidance, so why did APPL take more grief than Samsung in the marketplace?
Life is not fair.
Shed no tears for Apple or Samsung. Apple sells fewer products than the Korean tech giant, and retail sentiment drives sales up or down, and that impacts Samsung’s business in ways that Apple and APPL shareholders do not understand.
Yes, life is not fair, but we do not cry for thee, Cupertino.