Apple Inc. (AAPL) is losing ground in the European smartphone market as Android and even Windows Phone increase their market share at the expense of the company. However, Apple still does well on its home turf, and analysts at Raymond James still view the company and its stock in a positive light.
Apple Inc. (NASDAQ:AAPL) is rapidly losing ground in Europe as Android increases its commanding lead, according to data from Kantar. However, the company has gained market share in the U.S., and analysts at Raymond James still see Apple Inc. (NASDAQ:AAPL) as a good opportunity for investors. They issued a report to investors highlighting the changes in market share and maintaining the strong buy rating they upgraded the stock to earlier this week. They also outlined some of the risks Apple Inc. (NASDAQ:AAPL) faces right now, which aren’t much of a surprise for investors.
Changes In Apple’s Market Share
The Android operating system has a stranglehold over Europe now as it increased its lead over iOS from 61.3 percent at the same time last year to 70.4 percent now. Apple Inc. (NASDAQ:AAPL)’s iOS market share dropped from 19.2 percent a year ago to 17.8 percent this year, according to the data. Even Windows Phone managed to increase its share in Europe, rising from 4.3 percent last year to 6.8 percent this year.
In the U.S., iOS rose from 38.4 percent of the market last year to 41.9 percent this year. Android continues to be the leader in U.S. market share, although it increased only .1 percent in a year, rising to 52 percent. Raymond James analyst Tavis C. McCourt said in his report to investors that these shifts in market share are consistent with the firm’s expectations for modest iPhone sales growth around the globe because the smartphone market as a whole is expected to grow about 36 percent over the next year.
Risks For Apple
Raymond James has Apple Inc. (NASDAQ:AAPL) rated as a strong buy, although they do recognize some risks when it comes to investing in the company. They note that price sensitivity is becoming an increasing problem for Apple Inc. (NASDAQ:AAPL) as technology evolves more and more rapidly.
Also Apple designs and develops everything for its products from the hardware to the services which go along with it, which adds to the pricing premium the company charges. Meanwhile competitors using the free Android platform are able to focus more on hardware and offer lower prices than Apple, which puts further pressure on the company’s pricing structure.
Other risks they indicate include new product adoption. This could be a problem if Apple Inc. (NASDAQ:AAPL) releases a new product like an iWatch which does not create the excitement the company’s previous products did and also fails to support the company’s premium pricing structure.
Also Apple Inc. (NASDAQ:AAPL) spends a lot of money on intellectual property, both by filing for patents and also by protecting those patents. Its competitors, on the other hand, focus on offering lower prices instead. And finally, Apple’s dependence on its global supply chain could present a problem with supply and possibly impact the way the world sees the company, particularly because of the negative press some of its contractors like Foxconn have garnered.