In its second quarter, Apple Inc. (NASDAQ:AAPL) saw its first year-over-year decline in earnings in ten years, coming in at $43.6 billion in revenue and $9.5 billion in profit. Increasing competition, as well as the lack of a new product release during the quarter, caused sales to lag on the heels of the busy Christmas season. Management already stated it expects third-quarter sales to come in $10 billion lower than in its most recent quarter, due to lower iPhone orders during the quarter.
Apple Inc. (NASDAQ:AAPL) isn’t the only company filing trademark applications. The always-innovative Samsung Electronics Co., Ltd. (KRX:005930) recently filed to trademark the name “Samsung GEAR,” for what could be its much anticipated smartwatch offering.
Samsung Electronics Co., Ltd. (KRX:005930) is currently suffering from downgraded expectations due to disappointing orders of components for its latest device. The company’s stock has declined recently due to concerns that the Samsung Galaxy 4 might fall prey to lower sales as consumer excitement dwindles.
Still, the company is expected to report a 56% rise in profits due to the success of its smarthphones. For its first quarter, Samsung reported record numbers, with net profit climbing 44% year-over-year. In the previous quarter, it reported 54% growth, which led analysts to speculate the company was slowing down.
To continue to meet expectations, Samsung will be required to remain ahead of the market, coming up with innovative products that change consumers’ lives. A smartwatch could be just the item the company needs to keep Samsung on top.
High Expectations
All three companies have high expectations, but just because Sony is first on the market, doesn’t mean the company will win the smartwatch war. Samsung and Apple Inc. (NASDAQ:AAPL) both have a record of meeting consumer expectations.
With Android splitting the market between so many manufacturers, though, Apple could win. And that’s because it creates products that work well with its existing products. With competition ramping up, Apple is working hard to create a smartwatch that will rule the market. Consumers and shareholders should benefit from the effort.
The article Will Apple Build the Best Smartwatch? originally appeared on Fool.com is written by Stephanie Faris.
Stephanie Faris has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Stephanie 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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