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Apple Earnings Review: Sometimes When You Lose, You Really Win

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Apple reported better-than-expected fourth-quarter earnings after the close Monday.

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And now let's look at what's going on with the lower-priced (but not low-end) 5C.

Unfortunately, Apple did not break down sales between the 5S and 5C, but I believe this picture tells an important story:



So Apple can't keep its most expensive phones in stock, while the less-expensive ones remain plentiful.

That says an awful lot about Apple customers' ongoing willingness to pay up for the best and most complete mobile device ecosystem -- and that's more important than market share.

Sometimes When You Win, You Really Lose

From a pure market share perspective, Samsung is indeed the winner -- no question about it.

But look below the surface.

In the first two quarters of the year, Samsung reported that its smartphone growth was driven by high-end models. And then in the third quarter, it saw some stagnation in the high end while its mass-market phones took the lead. I discussed this phenomena yesterday. That trend is also expected to continue into the fourth quarter.

This slowdown at the high end came despite the release of the Galaxy Note 3 phablet, and is possibly indicative of Samsung, as well as the rest of the Google (NASDAQ:GOOG) Android complex, putting out too many phones, which dilutes the cachet of individual high-end 'flagships.'

And that's why you see the likes of HTC (OTCMKTS:HTCXF) and the Google-owned Motorola flaming out.

Samsung's not exactly falling apart, but it is becoming increasingly reliant upon the brutal snake pit that is the low-end smartphone market -- an area in which Apple is not competing.

Position in AAPL
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