Not surprising - the smartphone market is stagnating and I guess both iOS and Android users have dug in.
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Apple's U.S. iPhone User Base Sees Slowing Growth in Q1 2019
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Service growth is limited by iPhone sales. Watch and AirPods are a hit, but not enough to offset slowing iPhone sales.
Apple’s long-term growth doesn’t look great, and there’s nothing on the horizon that looks like it will move the needle. But Apple is a secretive company so who knows; one announcement can change all that pretty quickly.
iPhone sales actually peaked in 2015, the year of the iPhone 6. Beginning with the fall 2015 model (the 6s models, with A9/2GB platform) the iPhone has been “fast enough” and needing to upgrade yearly or every two years—or even every three years—is no longer necessary for performance reasons. Apple saw this coming 5-6 years ago and they knew that to keep revenue and profits from eroding too drastically, they would need to introduce a new, higher-priced tier.
The reality is that Apple didn’t raise prices; they added a new super-premium model. If you don’t want the more expensive models, you still have an LCD flagship at <$800. The XR is $749, halfway between the $699 iPhone 8 and the $799 iPhone 8 Plus. With iPhone 8/8 Plus, if you needed >64GB, you were looking at $849/949; the 128GB XR is $799. That’s a price cut.
But if you want a 512GB 6.5” OLED iPhone XS Max, yup, you’ll have to pay $1,449. This fall, there might be an iPhone 11 Max with 1TB storage available; maybe it’ll be $1,999, who knows? If you must buy the most expensive iPhone, that’s $1,000 more than an iPhone 11 will be.
But that doesn’t mean there’s been a price increase. Higher spec’ed models cost more. Buy an 11R if you want to keep paying $700-800. There’s only a “price increase” if you feel entitled to the most expensive model.
What you prefer doesn’t equal to market preference. Majority of smartphone purchases in developed markets are through contracts/leasing programs, thus back to my point of Apple should be pushing their iUP program. Your argument doesn’t change the fact of the market.
As for yourself, if spending $1k outright is an afterthought for you, it is hilarious that you’ll be penny pinching a year later trying to sell your phone. Plus you don’t have AppleCare coverage. For most consumers, the iUP is a no brainer, getting new iPhones every year for just a monthly payment.
The market is so saturated already and its mostly iPhone and a lot of them are Touch ID iPhones too. Users seems to be happy with the older cheaper models and are holding on to them longer. The only silverlining is that one day, those Touch ID users will want to upgrade anyway. The problem is, you are not gonna see bulk upgrades.
I still have my iPhone 6s and I still use it in addition to my iPhone X.
I still have my iPhone 6s and I still use it in addition to my iPhone X.
The word "saturation" comes rapidly to mind.
Apple's estimated U.S. iPhone installed base saw little growth in the first calendar quarter of (second fiscal quarter) of 2019, according to new data shared today by Consumer Intelligence Research Partners (CIRP).
As of March 30, 2019, the U.S. iPhone use base hit 193 million units, compared to 189 million units at the end of the December quarter, marking two percent growth quarter over quarter.
Apple's iPhone user base was at 173 million units at the end of the March 2018 quarter, for year over year growth of 12 percent, which is not bad, but not quite hitting the growth rates of prior years.
A year ago, the installed iPhone user base in the U.S. grew four percent quarter over quarter and 19 percent compared to the prior year, indicating a plateau iPhone user base.CIRP's estimated U.S. iPhone installed base is based on estimated worldwide iPhone sales of 39 million, calculated from Apple's iPhone revenue and average iPhone selling price for the quarter ending in March 2019.
iPhone sales have slowed down, and in January, the decline in sales over the holiday period led Apple to make the rare move of lowering its expected revenue guidance. Apple also saw a dip in revenue in the second fiscal quarter (first calendar quarter) of 2019, bringing in $58 billion, compared to $61.1 billion in the year-ago quarter.
Apple has never provided a specific breakdown of the number of active devices in the United States, but earlier this year, the company said there were 1.4 billion active devices around the world. 900 million of those devices are iPhones.
Article Link: Apple's U.S. iPhone User Base Sees Slowing Growth in Q1 2019
I’d argue most consumers are not trying to upgrade their phone every year.
For myself, I’m still paying $45 a month for my iPhone X which ends in Nov. The Apple care coverage is really just for a piece of mind. I haven’t used it so far.
Not surprising. Rising cost versus features that actually make you...wow.
It’s a phone. 99% of the people that buy them are only on Facebook and Instagram anyways.
I’ve been an avid upgrader year over year since the first iteration, but this is the first year I’m going to let my AC+ on an Xs Max run its course or until this phone dies. $1449 for a phone really isn’t my thing anymore. I’m going on a damn Caribbean cruise for less than that next year. **sigh**
It’s a phone. 99% of the people that buy them are only on Facebook and Instagram anyways.
I’ve been an avid upgrader year over year since the first iteration, but this is the first year I’m going to let my AC+ on an Xs Max run its course or until this phone dies. $1449 for a phone really isn’t my thing anymore. I’m going on a damn Caribbean cruise for less than that next year. **sigh**
Actually, not:
https://www.statista.com/statistics/382260/segments-share-revenue-of-apple/
Apologies: link above wants money to view. Suffice it to say that Apple's primary money maker these days is the iPhone.
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Given that the Android phones over the last several years have had so much improvement - nice cameras, lots of memory and processor power, SD card compatible, headphone jacks and high quality DACs on some (like LG V-series), encrypted messaging with applications like Signal, and generally cheaper prices - I have no more compelling reasons to buy a new iPhone. Lots of people still pay lots of money for them, regardless, but I'm no longer among their number.
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Hubris is a funny thing:
http://blog.cas-group.net/2012/04/rise-and-fall-of-the-digital-equipment-corporation/
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Especially if you have no regard for high quality sound, and don't mind worrying about batteries, dongles, and the like.
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The strategies available to a business change as its size changes. Risk is less tolerable at a trillion dollar company than at whatever size Apple was when the first iPhone came out. Risks can be taken in new product areas that aren’t “sacred cows” yet, but I am not sure I can think of anything that Apple has put out recently that I *really* want, enough to buy.
I don’t really care about the iWatch (though I lobbied for its purchase for an elderly family friend), there are the iEarbuds—but I’m a lifelong headphone enthusiast so they don’t hold any appeal (yet anyway), and what else? Well, after using a friend’s iPad Pro with the iPencil I was sold on that, so that counts. The Siri voice command base holds zero appeal—and I don’t know why people are into those things at all. (Which means in 3-4 years I’ll probably get one and wonder how I possibly overlooked it...). Still, talk about a personal data vacuum clearer that offers next to no *true* benefits. The sound can’t compare to real stereo. I don’t give AF about “weather and traffic updates,” and what’s left? Dimming my lights for me? Come on...
But, how much money has been spent on projects that have massively stalled out (no pun intended)? I know the hit rate isn’t high for brand new ideas (whether you’re Apple or not) but still, it’s hard to ignore the dropping of balls, such as the Mac Pro, the enfeebled and overpriced MacBook Pros (though they still are pretty amazing), the Mac Mini that went missing for 5 years, the MacBook Air that went on a 2-3 year spring break, and no Apple monitor. Anyone who has used the 27” Apple Cinema Display knows what a genuine missed opportunity the lack of an Apple designed and quasi-manufactured display is. A computer monitor isn’t something I know I’ll need when I see it, it’s the blanks slate that almost every important appears on.
I *do* wish Apple would come out with a truly *new* design for their phones. I’ve hated the rounded off flattened hotdog form since it debuted in the 6, and I’ve missed the type of designs (and hold-ability) of the 4 and 5 generations. A new SE that’s not crippled at all would be cool. Idk. This upcoming iPhone will be the 7th (?) generation of the flat hotdog look. There’s low risk design and there’s no-risk design. The iPhone has been in the latter category for way too long now. (IMHO)
And to think this is about US, Apple's sweetheart market. The situation overseas is measurably worse, as customers are made to pay way more for getting less value: stagnating devices with expedient design choices, lowest denominator out-of-box peripherals, and most of Apple's services being US-centric next to a handful of select countries.
Cook can try all he may to pin it on the "market". The reality is that unless users are compelled to stick with iOS for their personal reasons, there's nothing really to drive Apple loyalty anymore.
Cook can try all he may to pin it on the "market". The reality is that unless users are compelled to stick with iOS for their personal reasons, there's nothing really to drive Apple loyalty anymore.
There is no way I'd buy your $1000 iPhone after a year for that price - if I wanted a jackless phone with no touch id, I'd be better off getting a "new" unused one off the shelf for roughly the price you indicate. Apple's traditionally high resale values are disappearing, not only with the phones, but with Macs as well (portless, overheating issues, keyboard problems, etc.). It's taken about 5 years, but Apple's reputation is decidedly tarnished.
Android has "85.81%" market share iOS has "13.21%" you can bitch and moan about "who" makes the money (a stupid arguement because anyone including YOU can use Android in a product; you can't make an iOS product). Are you telling me Apple are happy with these numbers?
http://gs.statcounter.com/os-market-share/mobile/europe
The integrated ecosystem. Even if it might not suffice in enticing new entrants, it goes a long way towards dissuading existing users from leaving. Which can make a lot of the supposed technological superiority that some love to tout about android phones moot.
For starters, imagine a consumer using an iPhone with an Apple Watch and Airpods. He subscribed to iCloud, Apple Music, Apple news, video+, Apple Arcade and (subsequently) pays with an Apple credit card. Family sharing let’s me share these services with the whole family.
He also owns an iPad which lets him share apps with his iPhone. Complement that with a Smart Keyboard and Apple Pencil.
Throw in an Apple TV for airplay mirroring and Apple Arcade and a HomePod because that’s the only choice if you are subscribed to Apple Music.
This is something no other company can offer, not even google itself.
Do companies buy thousand of iPhones for American people or alien*? Because if it’s the former I don’t see the point. And really, you want to say numbers are inflated by people that buy more than a phone for themselves?
EDIT: * when I say aliens I obviously don’t mean immigrants.
For one, there was no ‘X Max’, there was only the 2017 5.8 iPhone X (2018 introduced the 6.5 Max), so my question to you, do you know what the differences are between the 5.8 XS/Max?
Regardless, iPhones and/or smart phones are not expected to innovate every year, that’s not how technological advancements are meant to work, it’s literally never been like that for the iPhone, when various major upgrades are every few years or so.
So what do you think exactly? That there are 900 millions of active iPhones and every user has 3 or 4?
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Well not having to assist to that silly show anymore is probably the best thing to come out of this
Yes they are.
- Company A sells 80 million units for $20 billion revenue and $2 billion profit.
- Company B sells 40 million units for $31 billion revenue and $6 billion profit.
Which company is doing better? Obviously B. But Android fans would like to pretend A is doing better because they sold more units. It’s like they have a complete lack of any business sense.
I agree. I usually upgrade every year but I think until Apple figures out a full screen iPhone with no notch services is where I may invest this year with Apple
I am not sure if they teach greed in a high school math. Those investment houses are a bundle of joy, aren’t they. Bunch of w@nkers.
Who cares what “you’d” do? You don’t speak for everyone. The market (reality) disagrees with you and sales of used devices are still going strong.
Reputation is tarnished? Again, reality disagrees with you. Apple has outstanding customer satisfaction ratings. Where are you getting your data to say they reputation is tarnished?
That may be the case in the US - outside the US, lower tier models have seen dramatic price hikes.
Why they shouldn’t ? Apple has always positioned its products in the high end band of the market. What many people seem unable to understand, despite being quite obvious, it’s that when a company make this decision they are not going for market share. People that can’t afford > 800 dollars phone will never buy an iPhone, because they can’t. And it’s the majority of people. Perhaps privileged people forget sometimes how the world works and convince themselves it’s a matter of choosing the best model, while 90% of the time it’s a matter of fitting the budget. It’s not about innovation when you don’t have the money, it’s about what your wallet can afford. The great majority of smartphones sold are under 300 dollars phones, not the “innovative” phones, and that makes your point totally moot, because in all it’s history Apple has never made a product for the equivalent price band in any segments. Going for market share means offering a lot of products and accept very little profits for them. You. An innovate how much you want, most people in the world don’t have the money to buy innovation at 1000 dollars or at 750, because they can’t afford. Innovation as a reason to buy something it’s for a little minority of privileged people.
“Coincidentally” Europe in the last many years is suffering a relatively big economic crisis and purchase power here is at its lowest. “Coincidentally”.