This is the same story Apple investors have been hearing recently. Credit Suisse recently cut its earnings estimates on Apple on iPhone concerns, citing competition from Samsung, and the inevitable product refresh later this year. The iPhone 5S is expected later this year, according to recent rumors. Citi and Barclays Capital also cut earnings estimates last week for essentially the same reasons. Citi is worried about both the iPhone and the iPad, while Barclays is more worried about the iPhone. "Indications of reduced demand to Apple's suppliers contribute to our existing concerns that end demand for 10" iPad and iPhone5 in particular is softening, reflecting share loss by Apple in both the tablet market and the smartphone market," wrote Citi's Glen Yeung in a note. He cut iPhone estimates for the second quarter to 34 million units from 35 million, with the third quarter staying at 25 million units.
Barclays' Ben Reitzes cited Samsung as a factor for his estimate cuts. "Given our checks in the supply chain and factoring in increased competition from Samsung, we are lowering our iPhone forecast," he wrote. He cut iPhone estimates for the March quarter to 35 million, down from 36 million, with the full year at 150.8 million units.
When Wall Street analysts move on a name, it is a herd mentality. The consensus right now is that Google ( GOOG) and Samsung are eating Apple's lunch. Current estimates from analysts polled by Thomson Reuters expect Apple to earn $10.22 a share on $42.9 billion in revenue this quarter. A year ago, Apple earned $12.30 a share on revenue of $39.19 billion, so revenue is projected grow just 9.5% year over year. Samsung and Google both certainly have more buzz, especially as Samsung gets ready to launch its Galaxy S IV later this week. There is no denying that, but there is no denying either that sentiment is low on Apple either. This could be a sign of capitulation, a sign of giving up. That may very well be the sign that sentiment is poised to change. The Cupertino, Calif.-based Apple is in a perceived rut right now, with the sentiment being that innovation is dead, and that Apple will never be able to best Google and Samsung. Apple needs to alter the perception of itself, or this cycle won't end. A deal with China Mobile ( CHL) could change this, as well as a raised dividend and more return to shareholders.