Galaxy could suffer from down-market iPhones

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Galaxy could suffer from down-market iPhones

Apple’s reported intention to roll out cheaper iPhones this year may trim top smartphone maker Samsung Electronics’ market share and profit, Fitch Ratings said yesterday.

“If Apple does release a low-end iPhone, then not only are its operating margins likely to narrow, but this could also pull down the margins for Samsung and other smartphone manufacturers in 2014,” the global credit appraiser said in a note to clients.

The note comes after reports that the Silicon Valley tech giant is preparing to increase its market share by adding low-end models to its smartphone line-up later this year.

Fitch said such a move is feasible if Apple “aspires to take a reasonable market share in major emerging markets, including China and India.”

Samsung ranks as the world’s biggest handset maker. Fueled by its smartphone rally, Samsung recently estimated its 2012 annual operating profit will reach a record 29 trillion won ($27 billion).

The agency, however, said Samsung is likely to sustain its market lead over Apple this year on the back of its wider variety of products and greater presence in emerging markets.

“It commands a greater geographical exposure, particularly in emerging markets where prepaid plans are the norm,” it said. Yonhap
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