Apple Inc. (NASDAQ:AAPL) has seen its shares trade well off of their highs. Now Samsung shares are falling on weak sales of new phones. In mature markets, market share fights can be ugly and, in the end, can leave everyone hurting.
Nokia Corporation (ADR) (NYSE:NOK) was probably the first cell phone giant to feel the hit of the smartphone revolution. Only the company’s failing wasn’t weak sales of a new smartphone, it was pretty much missing the revolution altogether. That’s left the company in rough shape and forced it into a partnership with Microsoft Corporation (NASDAQ:MSFT) because it couldn’t build both desirable phones and a desirable smartphone operating system.
Nokia Corporation (ADR) (NYSE:NOK)’s revenues have been falling since 2007, and it lost money in each of the last two years. To add insult to injury, not only have the shares fallen dramatically, but the company eliminated its dividend to help shore up its finances. Its partnership with Microsoft Corporation (NASDAQ:MSFT) has resulted in a decent phone, the Lumia, but it hasn’t been enough to turn performance around. Investors should continue to avoid the shares.
Research in Motion…or Not
Research In Motion Ltd (NASDAQ:BBRY) helped to create the smartphone revolution with its email-enabled phones. However, the company insisted on trying to do everything itself and didn’t keep up with changing technology. That allowed new entrants to steal its customers. In a little over five years, the shares have cratered from around $140 to about $10 a share.
It’s back with a new phone, the BlackBerry 10, but initial sales results aren’t living up to analyst expectations. Investors should avoid the company. Over the last two years, Research In Motion Ltd (NASDAQ:BBRY)’s revenues have fallen from nearly $20 billion to $11 billion. It lost almost $1.25 a share last year and posted another share net loss in the first quarter.
Apple Inc. (NASDAQ:AAPL) shares have fallen some 40% from their late 2012 high. That’s a huge decline that’s mostly a result of investors having bid the shares up too far too fast. However, there are legitimate concerns that led to the market’s change of heart. For example, with mature markets becoming increasingly competitive, the company will either need to find a large new source of customers or bring out some impressive new technology.
Neither seem to be in the cards right now. So despite the top-line growing from $6 billion to $156 billion over the past ten years, investors are rightly looking to the future with concern. That said, the market tends to overshoot on both the upside and downside. Apple Inc. (NASDAQ:AAPL) shares now trade with a price to earnings ratio of around 10 and sport a yield of about 2.9% or so.