The Wall Street Journal notes that with smartphone penetration at nearly 70% of contract subscribers, there are less people making the switch to smartphones from feature phones.
But even among smartphone users, there’s increasingly less need to upgrade. Samsung’s Galaxy S4 was considered a good phone by most tech critics, but was found to be little different than the company’s prior S3 model.
Can gimmicks rejuvenate the smartphone market?
To try to juice sales, it seems companies are increasingly turning to gimmicks.
In addition to Samsung’s standard S4, the company just released the “S4 Active.” The waterproof phone could appeal to consumers prone to dropping their phones in water. That could give Samsung a sales boost, but it seems like a niche feature that would appeal to only a select group.
And while Motorola’s Moto X is incredibly hyped for its rumored “contextual awareness” features, the actual selling points could come down to two simple gimmicks: its going to be made in the USA, and buyers will able to pick a custom color.
Hopefully for Google Inc (NASDAQ:GOOG) shareholders, that will be enough to turn the struggling Motorola division around. To date, Motorola has been a burden for Google, costing it hundreds of millions of dollars. In fact, on Thursday, Google reported that Motorola lost $342 million in the recent quarter.
That’s still a small portion of Google Inc (NASDAQ:GOOG)’s overall earnings, but if Motorola could get out of the red, it would certainly help Google’s bottom line.
Investing in Apple
As Motley Fool’s own Adam Levine-Weinberg points out, long-term investors probably shouldn’t be swayed by Apple Inc. (NASDAQ:AAPL)’s upcoming results. If you buy into the larger story, (new products like watches and TVs built around the iOS ecosystem) then one quarter isn’t going to make a big difference to your investment thesis.
But for anyone with a short-term outlook, or anyone using leverage, it wouldn’t be wise to expect a strong quarter. Apple hasn’t released a major new product since last October, and the iPhone remains far and away its workhorse product. Given the recent trends in the smartphone market, it’s likely that iPhone sales could disappoint, and that could spill over into a larger Apple Inc. (NASDAQ:AAPL) earnings miss.
The article Apple Could be the Next Big Tech Miss originally appeared on Fool.com and is written by Salvatore “Sam” Mattera.
Joe Kurtz has no position in any stocks mentioned. The Motley Fool recommends Apple and Google Inc (NASDAQ:GOOG). The Motley Fool owns shares of Apple Inc. (NASDAQ:AAPL) and Google. Salvatore “Sam” is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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