Gartner: iPhone Sales Suffered Worst Quarterly Decline for Three Years Over 2018 Holiday Period

[MacRumors]

Apple recorded its biggest decline in iPhone sales for almost three years over the holiday quarter, according to new market research data by Gartner.

Apple sold 64 million iPhones in the fourth quarter of 2018, down from 73 million in Q4 2017. Those numbers followed a pattern of declining smartphone sales globally in Q4 2018, with growth of just 0.1 percent over the period and 408.4 million units shipped.

Despite retaining its second place position with 15.8 per cent market share behind market leader Samsung (17.3 percent), Apple bared the brunt of the decline, seeing its 18 percent global market share in Q4 2017 reduced to 16 percent in Q4 2018.

The analyst firm said iPhone sales were hit hardest in Greater China, where it found Apple's market share dropped to 8.8 percent in Q4, down from 14.6 percent in Q4 2017. Samsung also recorded a smaller market share over the holiday period year on year, recording 17 percent, down from 18 percent in 2017.

Third-placed Huawei closed the gap on Apple by selling 60 million phones in Q4 2018, up from 44 million in Q4 2017, expanding its share from 10.8 percent in Q4 2017 to 14.8 percent. Oppo, in fourth, registered 7.6 percent, up from 7.3 percent in Q4 2017, while Xiaomi took a 6.8 percent share, down slightly from 6.9 percent the previous holiday quarter.

"Demand for entry-level and midprice smartphones remained strong across markets, but demand for high-end smartphones continued to slow in the fourth quarter of 2018," said Anshul Gupta, senior research director at Gartner. "Slowing incremental innovation at the high end, coupled with price increases, deterred replacement decisions for high-end smartphones."

For 2018 as a whole, global smartphone sales grew by 1.2 percent year on year, with 1.6 billion units shipped. Market leader Samsung saw a 1.9 percent decline in share and Apple lost 0.6 percent over the previous year, but Huawei, Xiaomi and Oppo all saw overall gains of 3.2 percent, 2.1 percent, and 0.3 percent, respectively.

According to Gartner, Chinese brands actually boosted their overall sales thanks to broad appeal in emerging markets like China and India, while the worst declines of the year took place in North America and mature Asia/Pacific market regions.

Beyond the overall slowdown in the smartphone market, Gartner put Apple's poor quarterly performance down to buyers delaying upgrades and compelling alternatives from Chinese vendors.

"Apple has to deal not only with buyers delaying upgrades as they wait for more innovative smartphones, but it also continues to face compelling high-price and midprice smartphone alternatives from Chinese vendors. Both these challenges limit Apple's unit sales growth prospects," said Gupta.

Last month, Apple issued a rare warning that revenue for the quarter would come in at least $5 billion below the company's original guidance, with Apple pointing to a number of factors including the later launch of the iPhone XR, general weakness in China, and fewer upgrades as customers took advantage of Apple's reduced pricing on battery replacements in 2018 to extend the lives of their current phones.

Apple later posted revenue of $84.31 billion and net quarterly profit of $19.965 billion, compared to revenue of $88.3 billion and net quarterly profit of $20.1 billion, in the year-ago quarter. However, even with the earnings warning, the quarter was the second-best in Apple's history in terms of overall revenue and profit, trailing only the first fiscal quarter of 2018.

Apple CEO Tim Cook recently said that the company is "rethinking" iPhone prices outside of the United States and may lower prices to boost sales. Apple has already started lowering the price of the iPhone for third-party distributors in China, and price cuts could also be introduced in other areas like India and Brazil, where the iPhone is prohibitively expensive and has seen stalled growth due to high pricing.

Article Link: Gartner: iPhone Sales Suffered Worst Quarterly Decline for Three Years Over 2018 Holiday Period

 

[dan9700]

Bring on this is the death of apple lol maybe cos people don't need upgrades each year cos iOS lasts for years

 

[honglong1976]

haha. Because people have replaced their battery, rather than the phone.

 

[TroyBoy30]

And it likely won’t get any better for them. It’s just the beginning of the slide.

 

[44267547]

haha. Because people have replaced their battery, rather than the phone.

That’s only part of it, the increased cost of the iPhone starting at $1000 is not attractive to the consumer, thus resulting in a few were upgrades as well. (Not to mention, China’s economy has stagnated, which directly has affected Apple, being it’s their second largest market.)

 

[mdnz]

Apple needs to lower the prices of the XS and XS Max by at least 300 euro in Europe. A possible 100 euro price drop isn't going to cut it. And even at that price point they're moderatly competitive compared to other brands. If you look outside west Europe, the price of an iPhone is a month's wage or sometimes even more.

 

[Skeith]

Conclusion: Price is not high enough.

Let's do it again, Timmy!

 

[decsramble]

Sales dropped over 12% but I bet the Average Selling Price went up and that's all Apple care about. If they had 1% of the market but that 1% were billionaires and each bought one $1,000,000 iPhone every year Apple would be just as happy. Probably happier because then their logo would be more of an aspirational fashion symbol.

 

[iName]

I mean what did they expect? The price of a flagship iPhone has nearly doubled in price in a pretty short amount of time. You can’t expect to be number 1 in smart phone sales at those prices when cheaper alternatives exist especially outside of the USA. That’s like Ferrari expecting to be the best selling car in the world.

 

[sehns]

On a positive note, this might actually help them remember they have a computer business.

 

[atoqir]

Well the hardware of phones is already superb these days. I once followed every new model of several manufacturers very closely. But these days the power of the hardware is already way above what most people need so I got bored of following hardware trends.

So the place where they really need to innovate is software and services since people keep their devices much longer. I seems like iOS and Android are their same boring self for the past years.

Entice users with other things. Make an official webplayer for Apple Music or revamp iTunes. Rework iCloud and give people on Mac and Windows selective sync, speed control. Redo the home screen and allow external storage on iPads and iPhones. Implement handoff or Spotify Connect into Apple Music. Redo the whole iCloud.com which is like 10 years old and hasn’t had any upgrades except a new background wallpaper.

The list is endless. But it seems Apple is only interested in making hardware so extremely powerfull but without ever expanding their software with real features. The only thing they add are trivial things animojis or screentime. They should look at Microsoft and Google who are investing in software and services way more these days. That is why you see on reddit and youtube reviews usually homescreens full of Google and Microsoft apps instead of the Apple counterparts cause almost all of those apps and services are the same since iOS7

 

[jayducharme]

It’s amazing to me that selling 64 million devices in one quarter is considered to be a problem.

 

[Carnegie]

Sales dropped over 12% but I bet the Average Selling Price went up and that's all Apple care about. If they had 1% of the market but that 1% were billionaires and each bought one $1,000,000 iPhone every year Apple would be just as happy. Probably happier because then their logo would be more of an aspirational fashion symbol.

The ASP for iPhones went down YoY in Q1 FY2019, not up. The more expensive new models were introduced in the previous quarter, so all of the channel build came in that quarter (i.e. Q4 FY 2018). The channel build for the less expensive new model (i.e. the iPhone XR) came in Q1. A year ago, that timing had been reversed.

 

[okeribok]

Maybe now we can get the SE2 in the size of the current SE, but with 4.5" display, waterproof, A12 processor and USB-C. And a headphone jack pls, because **** latency, lower audio quality and having another thing to charge.
For about $500.

 

[44267547]

It’s amazing to me that selling 64 million devices in one quarter is considered to be a problem.

Who said it was a problem? If you look at the fourth quarter for 2017, they sold 73 million iPhones, and the decline with 64 million iPhones for the fourth quarter in 2018, The point is, they are down 9 million units that they didn’t sell from the year prior, which tells you that the battery upgrade program and higher prices detracted away from sales. I don’t see that as a ‘Problem’, I see that as a reality check gauging the current market.

 

[Carnegie]

That 64.5 billion iPhones seems about right if we assume a channel build that was similar to what it was a year ago (a little over 4 million). We know that iPhone sell-in this last quarter was 66 million or more. I would guess it was more like 68 or 69 million. So sell through around 64.5 million makes sense.

 

[Joniz]

Oh, they’ll make up for it.

If only they could find some more of those SEs.

 

[apolloa]

On a positive note, this might actually help them remember they have a computer business.

Well, that’s been a disaster too, laptops with keyboards that break when dust gets under them on machines costing up to ‘several’ thousand dollars. Oh and let’s not forget the incredibly stingy approach to the ports they have.

The new Mac Mini apparently thermo throttles a lot.

No concrete inclinations of an iMac refresh really.

And the new Mac Pro by the sounds of it will cost a ludicrous amount of money as it will be aimed at the pro video market, not tech You Tubers with more money then sense. Although it’ll probably be a powerful machine too.

Personally I’d like to see a 21” iMac Pro keeping the Vega GPU. And a lower price.

And then we have declining iPhone sales due to its pricing being too high, if they were cheaper people would buy them, despite what people in here will claim.
And the services? What services? Apple Music is good but Spotify seems to be comfortably way ahead of them, and a TV service costing more then Netflix or Amazon! Good luck with that..

 

[The Game 161]

And what the comp are doing is a big reason for this...

 

[Mac Fly (film)]

I’m holding out for a $3,000 iPhone from Tim Wallstreet.

 

[Skeith]

in all seriousness. the worldwide price of iPhone XS is madness when compared to US pricing:

https://iphone-worldwide.com/

Major markets liked China costs an extra 300 USD. considering Android phones are pretty good (now) and in a very competitive (cutthroat) pricing now.

so logically of course they are not going to sell + the S model doesn't really bring much to the table.

 

[stevie grant]

It’s amazing to me that selling 64 million devices in one quarter is considered to be a problem.

It's almost as amazing as someone not seeing "the biggest decline in iPhone sales for almost three years" as a problem.

 

[hybroid]

Price isn't an issue to many. Lack of innovation in the XS line definitely is.

 

[MattMJB0188]

Yes. Because we want phones like the iPhone 5 (SE), and iPhone 8 form factors, not this garbage. Not to mention its extremely overpriced.

 

[Mac Fly (film)]

Sales dropped over 12% but I bet the Average Selling Price went up and that's all Apple care about. If they had 1% of the market but that 1% were billionaires and each bought one $1,000,000 iPhone every year Apple would be just as happy. Probably happier because then their logo would be more of an aspirational fashion symbol.

1% of the market kills the ecosystem.