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

[adamski23]

There’s really 2 main reasons for this:

1) the usability of older generations does not drastically suffer with each new os iteration.
2) the year over year hardware upgrades are seen as minimal to most because of #1.

Older generation hardware is more viable today as improvements within the sector slows due lack of “innovation”. This is pushing companies such as Samsung to release products with drastic hardware changes that would hopefully disrupt the stagnation that has currently gripped mobile devices.

 

[max.ine]

It’s all about the price to feature ratio. Price is the only thing I see keeping Apple down. I see a lot of MacRumors posters always talking about features, ports, jacks, and whatever else, but it’s an Apple device. People would buy it either way... if they could afford it.

I would assume a lot of users on here are firmly in the middle or upper class and don’t see this, but us in the lower to lower-middle class can’t afford any new flagships at the current asking price. It’s even worse when you don’t live in the US and Apple’s devices are more expensive than they would be with the exchange rate. Even OnePlus, who is best known as a reasonably-priced, somewhat rebellious alternative to major flagships sells the 6T starting at $719 CAD (before taxes)—about $810 with taxes in most provinces. A few years ago, it’d probably have been $500-600 max.

To give Apple some credit here, I could trade in my 7 Plus for an XR for $649, which after taxes would work out to around the 6T’s $719 starting price. That’s a much better deal than any other flagship I see on the market, and the XR is the only iPhone this generation that I’m interested in anyway. The only other place I’d find such value for that price is with less reputable Chinese manufacturers’ Android phones, and personally, I don’t like Android that much.

Yes, the iPhone SE is a few years old now, and yet the prices Apple has recently had it on while stock lasts are ideal. It’s not asking too much or too little, and you get a trustworthy phone running a stable OS with it. If I liked the old iPhone 5 form factor, I’d have definitely picked one up... but it’s a bit too small for me now.

I personally believe we’re at a point where the only reasonable thing to do would be to start shaving off features on lower-end models rather than adding them. While the iPhone XR is marketed as a budget phone, it more or less replaces the price tier the standard 8 had occupied, and added a few tiny more features along the way. You can leave the XS’ and XS Plus’ of the world unchanged, but if Apple is going to create ‘budget’ models, it should be more along the lines of the iPhone SE.

If the 7 Plus internals were placed in the XR frame and the XR’s new cameras et al. were cut, the majority of consumers (including me) would eat it up. The XR may be the most popular iPhone model available to consumers at the moment, but even that is still too expensive for a good amount of us. I guess I’m essentially suggesting an SE Plus here, and they could add an SE2 for the tiny-form-factor market while they're at it.

 

[MoreRumors?]

If those numbers are accurate, you can't overlook Huawei and see they had a huge increase in sales while Apple and Samsung declined. How much decline in sales of Apple and Samsung in China is what I don't know and would like to see but I know it won't be disclosed.

 

[PickUrPoison]

But the upgrade cycle now with $1000+ phones is 4 years. It used to be annually, then every two. Now it's around 4. That's why sales have slipped dramatically.

From the original iPhone through the iPhone 6S, I had every one. I upgraded annually as did millions of other people. I didn't switch from my iPhone 6S until the X because of the $850+ price tag, not because I didn't want to.

Lack of innovation as a reason for loss of sales? Maybe, though personally I think the jump in features from one iPhone to the next has been pretty stable over the years.

People used to upgrade annually or every other year, even when their phones were still perfectly usable. They upgraded to have the latest and greatest. And they could afford to do so when phones were $500-$700. People simply aren't going to do so with $1200 phones.

And I don't think prices will drop. That's the rub. Apple is happy with the prices, even if they sell fewer. Shareholders/Wall Street won't like it. But Apple management is fine with it. That's their right, of course, but it isn't going to help Apple remain a trillion dollar company.

Perhaps we're arguing the same point but from different directions. High prices today are preventing users from upgrading as frequently, thus sales are down. And Apple couldn't care less. Apple has decided their phones are worth a certain amount, and that's what they'll charge, regardless of how many they sell. But like I said, Wall Street isn't going to be happy. Whether that matters is the unknown.

Smartphones are a mature technology. When I upgraded from 4s to 5s, it made a real difference. 5s to 6s, again, much faster, bigger screen. But my 6s is now “good enough”. Beginning with the A9/2GB platform (iPhones 6s/SE), any iPhone is now fast enough and has a great camera. My phone does everything I need, and my not buying a new one has nothing to do with a new $1,000+ OLED X-platform tier.

Those who want to upgrade yearly to get the latest and greatest can do so, and when you re-sell your one year old iPhone, you get a high percentage back. If you sell an XS this September, I’d be surprised if that year of usage cost more than $1/day.

If you look at the XR, prices haven’t really gone up in many years. Just because Apple introduced a $1,000 super premium tier doesn’t mean you have to buy it. It’s there for those who want it and can afford it.

If Apple never introduced X/XS/XS Max and only had the 8/8 Plus in 2017 and the XR in 2018, unit sales would still be dropping. It’s the addition of a new tier of expensive phones that has allowed Apple to keep revenue and profits high, even with the lower unit sales that would be happening regardless of its existence. Slowing unit sales is a smartphone market maturation issue, not a pricing issue.

 

[Biu_miu]

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

Same here. If XS had some bigger changes than slightly better camera and slightly better battery, it wouldn't be that bad. But at the same time it is a bit paradoxical, because a lot of people online (and also I know irl) skipped the X, because they didn't want the first gen/ not complete/experimental/ test phone with all screen interface...

 

[1050792]

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

That will certainly help them becoming the world's richest company.

 

[Sedulous]

Why continue to report these entirely fabricated sales? They never ever ever match up to actual official sales numbers.

 

[anthogag]

A good thing about Apple devices is OS updates and upgrades are regular. I don't have to wait for the carrier for the yearly upgrade.

Over the "holiday period" the US and China started the tariff spat. Chinese consumers presumably support state subsidized companies like Huawei if there's a spat with another country.

What is Apple's current war chest size...$350 billion...$500 billion? They can afford to lower iPhone prices to increase market share.

 

[Peperino]

So much for Tim Cook's greediness. I guess people got tired of being ripped off.

 

[spacemnspiff]

For example the S10 plus 512GB model is 150 quid cheaper than the iPhone XS Max 256GB...which really is quite shocking.

If Samsung had to develop OS for their phones too apart from hardware, all their already thin margins will all but vanish. Samsung hardware should be cheaper than what they are charging, because all Samsung provides is the hardware. One needs to consider OS cost for iPhones if Apple vs Samsung price equivalence needs to be estimated.

 

[benlukes]

Those numbers followed a pattern of declining smartphone sales globally in Q4 2018, with growth of just 0.1 percent over the period

A period where smartphone sales INCREASE by 0.1% is not a period of “declining” sales! It could be (and is) a period of declining sales GROWTH, but those two statements are different. Shouldn’t a professional writer know that? Or are they just trying to cover for Apple?

Also, are all those fan boys that regularly use Apple’s success (or stock price) as an argument for why they couldn’t possibly be doing anything wrong finally going to admit Apple has made mistakes with their business decisions at least recently? Apple lost a very substantial amount of market share, and accounted for about 50% of all losses in a period where smartphone sales grew overall. They also likely had the largest loss of any company BY FAR, as “Others” category is made up of a bunch of smaller companies.

 

[Regbial]

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

But.. but... butt... C O U R A G E.

 

[mi7chy]

They got too greedy with the pricing. For example, the iPhone Xr could've sold a lot better if they had priced it reasonably at $499. Now it's too late and will stockpile even if they lower the price since devices like the Galaxy S10e demonstrate that lower price can still have premium build and design, feature packed and with Qualcomm radio.

 

[AppleorSamsung]

So in 2018, Apple sold just about the same number of phones as in 2017 but with a higher ASP per unit. That looks amazing to me.
The new Xs models carry plenty of innovation. People are funny. The cameras with the AI, the incredible processors, a lot faster LTE speeds, 120 HZ touch sensing, IP68, better speakers, dual SIM, faster wireless charging. Most people complaining are just clueless about how difficult these things are to implement. Specially implementing and selling them at the massive scale that Apple does. Apple is a true engineering company. iPhone Xs , Xr are truly out of this world devices. They are expensive but they are also the best money can buy.

The things you’re naming isn’t innovation, just updated technology.

 

[Fixey]

Not surprised, after all they cost more than Samsung the #1 leader and offer less than Samsung smartphones.

Apple can’t expect users to pay more for less just to have iOS and the Apple logo on the back.

Samsung now years ahead and leaving Apple in the dust, CPU power doesn’t matter after all did it really make a big impact in people’s decision back in the day between Intel and PowerPC, Intel was not as powerful but was good enough and that’s what we have today A10,A11 etc... may be more powerful than it’s competitors but the competitors are good enough for the end user.
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They got too greedy with the pricing. For example, the iPhone Xr could've sold a lot better if they had priced it reasonably at $499. Now it's too late and will stockpile even if they lower the price since devices like the Galaxy S10e demonstrate that lower price can still have premium build and design, feature packed and with Qualcomm radio.

Exactly, Apple just not offering anything extra but charging extra for the same phone just with a new name.

Samsung is #1 due to Apple’s greed.

 

[dampfnudel]

With the rumors of another meh iPhone release this year, I expect sales to continue sliding well into 2020. Hopefully that lights a fire under Apple’s behind to “get serious” for their 2020 releases, maybe with more reasonable prices. Sure, eventually people have to upgrade, but with the incremental updates we’re getting coupled with the “are you kidding” prices, a lot of people now have the “I’m keeping my current iPhone as long as possible unless Apple knocks my socks off with a new design” mindset. It’s been a while since Apple knocked our socks off.

 

[now i see it]

There's a lot of BS 'excuses' being made here why iPhone sales are down. The most rediculous one is "competition from other smartphone vendors". That's absurd. iPhone users are largely stuck in iPhone world and the next phone they get will be an iPhone. Most iPhone users don't shop around for cheaper Android phones. They're addicted to and trapped inside the iOS prison.

iPhone sales are down because the new iPhones aren't much different than the last ones and they cost too much now.
That's it.

 

[MrGuder]

Time to get rid of that notch sooner than later.

 

[UltimaKilo]

The days of mobile phone “super cycles” are likely over. Apple really needs to blow it out of the water with their services and continue to push Mac and wearables growth.

I can’t be the only person who thinks Apple has room for growth in the PC space.

I also think HomePod has a lot of growth left in it, but Apple needs to cut the price by $50 and more importantly, BADLY needs to upgrade Siri.

I love the iPhone, don’t get me wrong, and I understand it’s still the biggest revenue driver, but Apple is a big enough company to have a continuous focus on more than just iPhone, iPad and services.

 

[ikramerica]

Chinese phones sold wellin China at expense of US and Korean models.

Film at 11.

 

[I7guy]

Not surprised, after all they cost more than Samsung the #1 leader and offer less than Samsung smartphones.

Apple can’t expect users to pay more for less just to have iOS and the Apple logo on the back.

Samsung now years ahead and leaving Apple in the dust, CPU power doesn’t matter after all did it really make a big impact in people’s decision back in the day between Intel and PowerPC, Intel was not as powerful but was good enough and that’s what we have today A10,A11 etc... may be more powerful than it’s competitors but the competitors are good enough for the end user.
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Exactly, Apple just not offering anything extra but charging extra for the same phone just with a new name.

Samsung is #1 due to Apple’s greed.

Samsung is #2 because it sells $100 phones. How does the galaxy and note do compared to the iPhones?

 

[Cosmosent]

1.) On what date did the iPhone X launch ??? ... Nov 3, 2017

2.) On what dates did the XS, XS Max, & XR launch ??? ... Sept 21, 2018 & Oct 26, 2018

3.) Why did AAPL increase the prices of the 8 & 8+, instead of reducing them to account of Economies of Scale ??? ... to entice more to pull the trigger on the X.

4.) Which iPhone was the SUPER-hyped 10-year anniversary model ???


The Gartner analysis isn't worth the paper it's printed on !

It's NOT an Apples to Apples comparison !

Their estimate of 64M units sold in the Qtr is in the Ballpark, however.

 

[larryj]

I'm more concerned about the engineering than the price. I'm on my 3rd iPhone X and my wife is on her 4th. We've had the same problem - touchscreen failure due to a poorly designed cable.

 

[Verita]

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.

I get your argument, but how would Apple attract developers for a market of 50 people? There are benefits with wide market penetration.

 

[deebinem]

Probably why there's been movement towards more services and streaming content? I mean if Netflix and Hulu can do it...