Samsung shipped nearly twice as many phones as Apple sold in the last quarter and is also now the top phone seller in the world, surpassing Nokia, according to various reports.
In its latest earnings report, Apple revealed it sold 26 million iPhones, which was about 10 million less than it sold in the previous quarter. The reason for the major drop appears to be consumers holding out on buying an iPhone in anticipation of a newer model sometime this fall.
Meanwhile, Samsung began shipping its flagship phone, the Samsung Galaxy S III, all over the world last quarter. The company earlier this month said it had already shipped 10 million units of the new phone. Business Insider reports that multiple analyst groups estimate Samsung shipped about 50 million units in the last quarter.
Contributing to that number is the fact that Samsung sells more phones than just its all-star Galaxy S III, and it sells those phones across various price ranges, unlike Apple, which for the most part sticks to the high-end market with the latest iPhone starting at about $200 with a two-year contract.
And Samsung's strategy is working out as its latest numbers also pinpoint the tech company as the top phone seller worldwide, surpassing Nokia, which had long held that distinction.
Samsung sold 93 million phones around the globe and saw its market share increase from 20.7% to 25.7% while Nokia sold 83.7 million and saw a decline of 5%, according to Strategy Analytics.
Apple meanwhile holds just 7.2% of the global market.
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AT&T: My Favorite Telecom Stock - Seekingalpha.com
By Nawazish Mirza
Despite the cutthroat competition in the telecom sector and continuing drop in profit margins for AT&T (T), we recommend a buy rating for the AT&T shares. Our thesis is primarily based on a substantial change in consumer preferences, representing a long-term switch from landline to wireless telephony. Owing to an increase in demand for wireless traffic, we expect AT&T to stake out a large share of the ever-expanding market for wireless services, resulting in unprecedented revenue growth.
AT&T generated $126.7 billion in revenue during the 2011 fiscal year and $31 billion for the first quarter 2012, largely driven by wireless and wireline data services. In its latest quarter, AT&T's revenue went up 0.3% to $31.6 billion. The decelaration in revenue growth is an outlier because consumers are postponing their iPhone purchases in anticipation of iPhone 5. AT&T's Wireless and wireline data services contributed approximately 76% of total revenue in the previous quarter, marking 7.5% year-over-year growth. AT&T shares have been boosted lately with a P/E ratio of 50, which is higher than its close competitors Verizon Communications (VZ) and Sprint (S). However, we are long-term bullish about these telecom stocks.
The telecom industry in the United States and around the globe is highly sensitive, and innovation and customer retention form the basis for success. The rapidly changing dynamics require telecom players to demonstrate strong financial flexibility for medium to long-term performance. The competition structure for the overall industry is likely to intensify because of lower-cost, comparable alternatives to cable, wireless and VOIP providers that are emerging as competitors for core business segments of AT&T.
Further, the telecom sector is faced with the constraint of radio spectrum availability, and unless Federal Communications Commission (FCC) approves additional spectrum, the telecom sector will have to compete mainly on price and service quality. The overall weak economic conditions add insult to injury as AT&T and other telecom firms target consumers with limited discretionary income. In this operating environment, adequate coverage and diversity in voice/data packages are key considerations for investing in telecom, perhaps as vital as profit and cash flow figures.
Historically, AT&T has dominated other service providers like Verizon in net subscriber additions. However, regarding gross additions, Verizon dominated the scene by adding about 500,000 subscribers in the first quarter 2012, compared to 187,000 subscribers for AT&T. The postpaid churn rate in the first quarter 2012 declined to 1.1%, the lowest in the past seven quarters. This could erode margins.
Another caveat to consider is the subsidies given to the smartphones, which could further lower margins. On average, more than 75% of postpaid sales by AT&T is comprised of smartphones, with Apple's (AAPL) iPhone dominating the mix. Critically, AT&T shells out more than $500 in subsidies for each handset. AT&T needs to decrease this unsustainable subsidy in order to improve operating margins.
To avoid deterioration in service quality and increase in churn rate, AT&T is expected to invest in acquisition of available spectrum. We believe this investment is inevitable to sustain its current position, and we rate this as a critical factor for determining the future course of share price. However, the underlying growth trend in the telecom industry is extremely bullish. In Facebook's (FB) earnings call Mark Zuckerberg revealed that he expects the number of smartphones reach 4-5 billion globally within 5 years.
AT&T is trading at $37.14, close to its 52-week high of $37.35. The company generated free cash flow of $5.1 billion in its most recent quarter and spent $2.5 billion on stock buybacks. Its board also approved an additional repurchase of 300 million shares on Friday. This amounts to more than $11 billion. The company still has 156.5 million shares left in its previous authorization. AT&T is buying back its own shares because regulators didn't let it buy other telecom stocks which are very attractive investment opportunities. We expect AT&T's earnings per share reach $2.65 in 2013, giving it a forward P/E of 14.
We are also bullish about the other giant in this space, Verizon. The company added nearly 900 thousand subscribers vs. 320 thousand for AT&T in the second quarter. We expect Verizon to earn around $3 per share in 2013, giving it a forward P/E of 15. This is slightly higher than what we expect for AT&T and that's the reason why AT&T is our favorite telecom stock. We also like T better because of its slightly higher dividend yield and its recent moves to boost share buybacks. Billionaires Ken Griffin and Ray Dalio's bullish positions in the stock adds comfort to our assessment.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Samsung, Nokia Devices Reveal NFC Exploit: Can be Hacked, Controlled - mobilenapps.com
- Attendees gather at the Android developer sandbox during the Google I/O Conference at Moscone Center in San Francisco, California June 28, 2012(Photo: Reuters)
A presentation from a research consultant has revealed the ability to hack into Android and MeeGo devices via NFC exists. The exploit allows information to be sent over short distances through the software, like the NFC-enabled Android Beam, and even the ability to control a device.
Charlie Miller, a research consultant at security firm Accuvant, presented the hack. The hack allows data to be stolen from three handsets. Included are the Samsung Nexus S, from Google; the company's Samsung Galaxy Nexus device; and the Nokia N9. The devices run the Android and MeeGo mobile operating systems.
In the presentation, Miller abused the Android Beam feature using NFC, allowing data to be sent over short distances, similar to Bump for iOS and Android. For those not in the know, Bump is an app that allows contact information to be sent by 'bumping' phones together.
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Miller revealed that a default setting in the Beam software exists, which allows a link to be opened or a file to be sent to the device. In a seemingly simple exploit; therefore, Miller could redirect a device's browser to a website exploiting vulnerabilities in Android. It seems like an obvious way to send malicious software to devices. According to Miller, speaking to technology website Ars Technica, the user does not have to do anything to go to the site.
The Nokia N9 MeeGo device exploit sounded severe as NFC, again, allowed a device to be controlled. Text messages and phone calls could be made and sent through a radio tag.
Not all Android devices can be exploited. However, a particular version of the Android software - 2.3 Gingerbread, still taking a majority share of software running on Android devices - is exploitable. It's possible that the exploits may work in the Android 4.0 Ice Cream Sandwich and Android 4.1 Jelly Bean, even though exploits may have been patched up.
A report recently revealed that around 10 percent of devices run Ice Cream Sandwich, then the latest version of Android. Considering it's probably a patches issue for older versions, devices should be running the operating system or Jelly Bean.
Exploited devices were unlocked and had an active screen. Google didn't comment on the exploit; Nokia said it is "actively investigating" the issue.
The exploit is worrying for Android: the operating system, along with iOS, saw malicious apps entering its Google Play app store recently. It'll be interesting to see if NFC integration in iOS 6 brings similar loopholes.
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