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Kleiner Perkins Caufield & Byers partner Mary Meeker recently shared her annual Internet Trends report for 2016, showcasing a presentation of 213 slides covering a range of topics from global life expectancy to the ongoing market battle between iOS and Android.

Concerning the specific battle between iOS and Android, Meeker notes that over the past six years iOS has seen just a two percentage point increase in market share, while Android has exploded from a 4 percent presence in the industry in 2009 to a massive 81 percent in 2015. The pattern is expected to continue, with Meeker projecting iOS will see a year-over-year loss of 11 percent in unit shipments as Android climbs another 7 percent in 2016.

Meeker-report-3-800x601.jpg

Due to Apple's introduction of the lower-cost iPhone SE -- and the cheaper price tag of smartphones in the company's expanding global markets -- Meeker also expects Apple's average selling price per unit to dip this year for the first time since 2012. In that year, ASP dropped only 4 percent (from $712 in 2011 to $686 in 2012), but now the company is predicted to see a 9 percent decline in ASP (dropping off from $717 in 2015 to $651 in 2016).

Unlike in years past, global smartphone unit shipments are slowing "dramatically," for both Apple and Android-supported devices. Expansion for the smartphone market as a whole has stagnated, going from a peak in 2010 at nearly 80 percent year-over-year growth, to just about 15 percent in 2015.

Meeker-report-1-800x603.jpg

Global smartphone user growth is seeing a similar slow-down; understandably, the largest markets with the least amount of smartphone proliferation have the biggest upticks in year-over-year increments. These include Asia-Pacific, which has seen a nearly 20-percentage-point increase in smartphone user share over the last seven years and now accounts for over half of the total market.

Apple has been attempting to gain a larger foothold in these countries, notably seeing strong performance in China in recent years and looking toward India as its next area of focus. Low-cost devices -- and a larger number of potential customers without a smartphone -- in areas like the Middle East, Africa, and Latin America also presumably helped those territories come out on top in the total rankings for global smartphone user growth.

Meeker-report-2-800x599.jpg

Earlier in April, Apple reported its first year-over-year decline in revenue since 2003. The news led to a string of reports addressing the company's declining stock value and various "peak iPhone" comments concerning its potential inability to continue to grow in certain markets, especially where its flagship smartphones see annual releases without much dramatic distinction between models.

Meeker's tamped-down expectations for 2016 mirror these concerns, particularly regarding the increasing belief that the 2016 iPhone 7 and iPhone 7 Plus will be iterative updates on the current iPhone 6s line, using a largely similar design but with new features like a dual-lens camera and Lightning-enabled headphone connector. An uptick is now projected for 2017's "iPhone 8," which is seeing rumors surrounding everything from a massively redesigned bezel-free display that features a dual-curve OLED screen to truly wireless charging.

Mary Meeker's 2016 Internet Trends presentation, and a download of the full PDF, is available on KPCB's website.

Article Link: 2016 Internet Trends Report: Global Smartphone User Growth Slowing as Android Outpaces iOS
 
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i_know_things

macrumors newbie
Jan 12, 2009
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I wish some of these 'analysts' would do a comparative report on profitability of iOS vs other software over same period of time... What is the use in being a market leader when your profits are wafer thin?

I keep reading about "profitability". It's good for Apple but what does profitability mean for you? Is Apple adding new features/hardware? The answer is no. Apple fanboys are the reason why these crappy iPhones are selling like hot cakes. There is no innovation. The first version of iPhone is a true innovation in terms of product appeal.
 

TechZeke

macrumors 68020
Jul 29, 2012
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I keep reading about "profitability". It's good for Apple but what does profitability mean for you? Is Apple adding new features/hardware? The answer is no. Apple fanboys are the reason why these crappy iPhones are selling like hot cakes. There is no innovation. The first version of iPhone is a true innovation in terms of product appeal.

Allot of people don't realize that as consumers we need competition and that we need the competition to do well. It's fine if you like or prefer Apple products, but Samsung, HTC, LG, etc. making a compelling competitive product only drives Apple to keep making better products at more competitive price points. The price of the iPhone SE and the new screen sizes of the iPhone 6 and 6 Plus being the latest examples.
 

samcraig

macrumors P6
Jun 22, 2009
16,779
41,982
USA
Allot of people don't realize that as consumers we need competition and that we need the competition to do well. It's fine if you like or prefer Apple products, but Samsung, HTC, LG, etc. making a compelling competitive product only drives Apple to keep making better products at more competitive price points. The price of the iPhone SE and the new screen sizes of the iPhone 6 and 6 Plus being the latest examples.

Indeed. And a recent study found that Samsung's Note 5 is ranked #1 in customer satisfaction...

https://forums.macrumors.com/thread...-customer-satisfaction-over-apple-6s.1975436/
 

commanderclif

macrumors member
Apr 11, 2012
55
39
Florida
Worth pointing out that "units shipped" shouldn't be confused with "sold through" numbers. If millions of units are sitting on retailer shelves, that doesn't mean squat except for excessive quantity. Sold through numbers are products in consumers hands.

In the game console space, we've seen a flop in who was the leader, and one thing that flipped is when you are ahead, you show off your sold through numbers, and when you are trailing, you use your unit shipped numbers...if you even decide to report.
 

TallManNY

macrumors 601
Nov 5, 2007
4,753
1,602
This ASP won't stand through 2017.

"Meeker also expects Apple's average selling price per unit to dip this year for the first time since 2012. In that year, ASP dropped only 4 percent (from $712 in 2011 to $686 in 2012), but now the company is predicted to see a 9 percent decline in ASP (dropping off from $717 in 2015 to $651 in 2016)."

Going to 32gb will lower the percentage of iPhone buyers who feel the need to upgrade their storage to mid-tier. And if mid-tier is 128gb, then I really can't see many people willing to pay more to go to third tier. (What the heck would you carry in your phone to use up 128gb?) Also I believe Apple will lower the entry price across the board with iPhone 7. I'd also like to see them drop entirely the 6 and 6S with the release of the 7. There is just no point with the SE being out there and the 7 seeming to be very similar to the 6S according to the rumors. Apple probably continues to hammer on its suppliers to lower the cost of building these iPhones, so margins won't take a hit. In addition the growing high margin sales from Services will allow some cushion for Apple to meet market expectations as to overall margin.
 

smacrumon

macrumors 68030
Jan 15, 2016
2,683
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I'm more convinced about this having to do with iPhone and iPad pricing. This isn't a good situation at all. iOS is a great platform and more people should be able to access it with a new device, not a device that is years out of date. No one will come to iOS if they can not afford to. Customers are actually moving away from iOS to Android, they are voting with their SIM and exiting the Apple carnival. No more clowning around. What other sign does Apple require to understand this basic issue. Pricing is completely wrong. iPhone is overpriced by at the very least $300.
 

The Game 161

macrumors Nehalem
Dec 15, 2010
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Part of the issue is that's a lot of improvements Apple are planning in 2017 are already on Samsung/android now. That's the frustrating thing. They a step behind as they expect people to buy the product no matter what is on the new phones. The current iPhone is still a great phone but is as good as what's on the top tier android phones? Honestly I don't think it is. Obviously software wise that's down to personal choice but in terms of what the top phones can provide Apple has fallen behind.
 

v0lume4

macrumors 68020
Jul 28, 2012
2,485
5,158
I must say this doesn't surprise me as

1) Android makes way more budget phones than Apple.
2) Android really has come a long way since 2009 in both software and hardware offerings.

Competition is good for any company, especially Apple.

Point #1 is absolutely why Android has the dominant market share that it does. I'd like to see Android's numbers in the high-end market.

Point #2 is absolutely right, and is actually the reason why I'm considering jumping ship from iOS for my next phone. I'd be curious to know what the smartphone market will look like in, say, 5-10 years. Will Android ever start having a negligible impact on the high-end market? TBD.
 
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sw1tcher

macrumors 603
Jan 6, 2004
5,577
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As an Apple fan (and not a a shareholder) I could care less about how much money they make, as long as they have enough to stay in business and make good products.

Good to see that you care. People should care. The more sales and money Apple makes, the more money they have to plow back into R&D to improve their products and come up with new product.
 

v0lume4

macrumors 68020
Jul 28, 2012
2,485
5,158
Pricing is completely wrong. iPhone is overpriced by at the very least $300.
I love the iPhone but you're absolutely right. Look at phones like the Nexus 6P and the fact that right now, you can get it unlocked for $450. You can't help but feel you're getting ripped a new one when buying an iPhone for $300 more.
[doublepost=1464878321][/doublepost]
The more sales and money Apple makes, the more money they have to plow back into R&D to improve their products and come up with new product.
In theory, this is correct. What we have unfortunately seen is Apple NOT reinvesting their $150B+ back into making the most cutting-edge smartphone on the market. A poster the other day said that Apple has gotten incredibly good at understanding the bare-minimum that they can get away with, while still selling phones.
 

Hastings101

macrumors 68020
Jun 22, 2010
2,347
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K
There comes a point when "profitability" isn't going to matter anymore because few people outside of the U.S. will be buying iPhones. Apple needs to fix their market share issue by competing better in big Asian countries like India and China. That might mean losing "profitability" and their chic image, but at least iPhone would still be a well-known product line in ten years (assuming smartphones are still a thing). Not to mention the competition is just about as good as Apple now, this isn't 2010 anymore.

If Apple wants the line to become a high-expense niche product like the Mac that's fine, but the way Jobs and Cook have always spoken it sounds like they've wanted iOS to be big.
 
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Skika

macrumors 68030
Mar 11, 2009
2,999
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I'm more convinced about this having to do with iPhone and iPad pricing. This isn't a good situation at all. iOS is a great platform and more people should be able to access it with a new device, not a device that is years out of date. No one will come to iOS if they can not afford to. Customers are actually moving away from iOS to Android, they are voting with their SIM and exiting the Apple carnival. No more clowning around. What other sign does Apple require to understand this basic issue. Pricing is completely wrong. iPhone is overpriced by at the very least $300.

So the iPhone SE should sell for 100$ get serious
 

Uofmtiger

macrumors 68020
Dec 11, 2010
2,351
1,062
Memphis
Part of the issue is that's a lot of improvements Apple are planning in 2017 are already on Samsung/android now. That's the frustrating thing. They a step behind as they expect people to buy the product no matter what is on the new phones. The current iPhone is still a great phone but is as good as what's on the top tier android phones? Honestly I don't think it is. Obviously software wise that's down to personal choice but in terms of what the top phones can provide Apple has fallen behind.
The chart would make more sense if it compared top tier Android phones to the iPhone. Comparing the iPhone to Android phones you get in a box of Cracker Jacks really doesn't say much about how they are performing in the markets they serve. Apple, for better or worse, is not about the race to the bottom, even if that is were the majority of people are.
 

PBRsg

macrumors 6502
Aug 12, 2014
347
592
As an Apple fan (and not a a shareholder) I could care less about how much money they make, as long as they have enough to stay in business and make good products. I hope that the slide in market share will push them to accept lower margins and bring out better products.

Reducing prices is the only way that Apple can increase their market share. There are a lot more people that want Apple products, especially in the developing world, but cannot afford them.
 
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