Apple Inc. (AAPL) Just Made Two Terrible Mistakes

Research firm Flurry warned that Apple’s deteriorating position in emerging economies could spill over to the rest of the globe. Chinese developers favor Android due to its dominance in their home country, and crucially, they’ve begun to export. Chinese-made apps are becoming popular in South Korea and Japan, and should they make it to the West, they could give Android a leg-up over iOS where it matters most.

Lack of a larger screen shouldn’t affect Apple’s market share in emerging economies, but it could start to weigh on its popularity in key Western markets. Anecdotally, I’ve noticed a lot of Apple fans complain about Apple’s continued use of the 4-inch form factor; having to wait yet another year for a bigger phone might prompt some of them to switch.

Samsung is certainly not taking chances. Its Galaxy Note 3, which will go on sale around the same time as the iPhone 5S and 5C, sports a monstrous 5.7-inch screen. If that’s too big, consumers can always go for the smaller, 4.9-inch GS4 or the 4.3-inch GS4 Mini. And if for some strange reason that’s not big enough, Samsung’s Galaxy Mega just recently arrived in the US.

The entire advantage to having a smartphone lies in its ability to do things other than make calls — browse the web, use apps, watch videos. Here, larger screens excel, making it easier to accomplish those tasks. And given that Americans now spend more time watching their phones than their TVs, it’s little wonder that larger screens are increasingly preferred

Investing in Apple
Clearly, the market was disappointed by Apple’s announcement, and it isn’t hard to see why. Apple’s decision not to release a bigger or cheaper iPhone could weigh on sales in the long-term.

Ultimately, when it comes to smartphones, market share matters. Without it, Apple will lose its software advantage, something that sets it apart from the competition. Neither the iPhone 5C nor iPhone 5S will do much to improve Apple’s position; instead, Apple continues to allow Android to dominate in emerging markets, and Samsung to lead in screen size.

The article Apple Just Made 2 Terrible Mistakes originally appeared on Fool.com and is written by Sam Mattera.

Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google.

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