Netflix reported first-quarter earnings of $0.05 per share on revenue of $1 billion. In the same quarter last year, Netflix reported a loss of $0.08 per share with revenue only at $870 million. It’s clear the company continues to expand its library of content. I feel that over the coming years, Netflix will continue its growth in the online-streaming market.
Competitors in the mist
One of Apple Inc. (NASDAQ:AAPL)’s main competitor is Google Inc (NASDAQ:GOOG), and that company currently has a bigger market share than all other platforms. Data as of February shows Google Inc (NASDAQ:GOOG) having 51.7% of smartphone subscribers, while Apple is currently at only 38.9%. This is partly in due to the fact that Google’s Android phones are on hardware that more people want.
Google did well in its first quarter 2013 earnings. It announced revenue of $14 billion, which was inline with analysts’ estimates. The inline revenue performance may be because Google was struggling with its mobile advertising. Like other competing companies though, it has to figure out a way to transition its costs-per-click from desktop to its mobile advertising. Despite the revenue only being inline, the earnings per share came in much better than expected. Earnings came in at $11.58 per share for the first quarter of 2013.
I feel this company still has some tricks up its sleeve. The CEO said that its acquired-Motorola unit is expected to come out with some interesting innovations, the first of which being a screen that doesn’t shatter when it’s dropped. The second one is a battery-life that lasts much longer than the current average smartphone. Either way, Google Inc (NASDAQ:GOOG) is also a good long-term play. The company boasts a market cap of $265.9 billion!
The smartphones that sell the most with Google’s Android operating system are the Samsung smartphones. What makes these phones more popular are two things that are simple for Apple Inc. (NASDAQ:AAPL) to adopt. The first is the phone’s screen size. This is important for people to be able to view movies and navigate the phone with more ease. The second fix would be reasonable prices. Samsung has many low-end smartphones that are affordable for consumers that don’t want to spend so much for an iPhone.
Samsung recently announced that it has taken 30% of global smartphone sales. Samsung is severe competition for Apple, and unless Apple can start to innovate again it will be stuck in the mud. Apple announced that it only has 17.5% of global smartphone sales, shipping only 37.5 million units in the first quarter.
Final thoughts
Apple seems like it will head lower in the short term. If you are a long-term investor I wouldn’t sell as of yet, but at the same time I wouldn’t be adding more shares either. I would be cautious to see if Apple announces a new product that can boost the stock once again, and increase margins. Unless Apple Inc. (NASDAQ:AAPL) can bring out a smartphone that people will want to buy, the stock will stay stagnant for a long time.
If Apple ever hits its all time trading high of $700 per share again remains to be seen, but it will need to first lift its 17.5% smartphone sales to a higher percentage. Otherwise, Samsung and other smartphone makers will continue to eat away at its market share. Until then I remain cautious, and will continue to believe that Apple has lost its way.
The article Apple Has Lost Its Way originally appeared on Fool.com and is written by Terry Chrisomalis.
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