iPhone Drops to 15% Market Share as Smartphone Market Goes Flat

[smacrumon]

For those specifications, apple products have a fair enough price I guess compared to the competition. Lowering prices might come from lowering the quality or using old cheaper technology. What do you think of the SE prices then?

I'm not certain lowering the price will correlate with lowering quality. But SE, with an old case (5/5s 2012/2013), and old internals (6/6s 2014/2015), is overpriced at the very least by $150.

 

[I7guy]

I'm not certain lowering the price will correlate with lowering quality. But SE, with an old case (5/5s 2012/2013), and old internals (6/6s 2014/2015), is overpriced at the very least by $150.

The price is the price. Internals are current, there are no newer internals to be found.

 

[kdarling]

Which is wonderful if your brands' expensive flagship phones have a great brand image. Not so wonderful if it doesn't.

Doesn't seem to matter much.

For example, Apple has a great brand image, but historically the iPhone has only ever broken out of the 15% or less marketshare in a region if it was subsidized.

I haven't checked, but I suspect similarly high priced phones from other makers are in a similar situation.

--

As I've said for years, the up-front cost breaking point worldwide seems to be about $250.

Now, it used to take a subsidized price for people to get a decent phone for that much. But nowadays, $250 by itself can buy a pretty darned nice smartphone in many countries.

--

This is why Apple (and others) are promoting outside loan variations on subsidies. Btw, subsidies were also killing the carriers, because they had to pay the maker up front... even though they were unable because of GAAP to write the cost off over the multiple years it took to get the money back.

 

[smacrumon]

The price is the price. Internals are current, there are no newer internals to be found.

The price is an overpriced price. Of course there are newer components available, Apple just decided not to use them in SE. The internals in iPhone SE are borrowed from 6/6s which is Sept 2014/Sept 2015. The current year is 2016, and the month is May. That's old tech in an even older case from 2012.

 

[SvP]

The price is an overpriced price. Of course there are newer components available, Apple just decided not to use them in SE. The internals in iPhone SE are borrowed from 6/6s which is Sept 2014/Sept 2015. The current year is 2016, and the month is May. That's old tech in an even older case from 2012.

Internals have little relation with pricing; the low end phones would be just a few dollars less than the high end ones. And Armani clothing would be same price as a Walmart clothing.

 

[I7guy]

The price is an overpriced price. Of course there are newer components available, Apple just decided not to use them in SE. The internals in iPhone SE are borrowed from 6/6s which is Sept 2014/Sept 2015. The current year is 2016, and the month is May. That's old tech in an even older case from 2012.

If people are buying the price is acceptable to those consumers.

 

[dk001]

Users are looking a double edged sword. Something will give and give soon, The carriers are feeling the heat. When fly by nights offer data plans on the carriers own networks that crushes the carrier plans, well they had to do something to cover their losses, so they slowed/quit subsidizing phablets. So if you want (and who doenst?) a lower bill you play the buy your own phablet game. Apple will not win in that marketplace. $$$ cheap knockoffs will grow in market share till there is a new balance. We just arent there yet, and we dont know what that will be and the effect on both the carriers and phablet makers are.

Myself, when my verizon contract expires, I will pay for a SE and I will find a month to month with as much data as I can.

Unless your contract runs out soon, you are likely to find your SE on the short list of diminishing functionality updates. That though of is totally dependent on what Apple does with the iPhone 7 and iOS 10.
[doublepost=1462112113][/doublepost]

Like other people here, I have bought many new gizmos when they were $1,000... VCR, microwave oven, video cam, CD and DVD player, you name it... that later could be had for $50.

Smartphones should be no different, and sure enough there are some that are that cheap.

However, the many countries which have had carrier subsidies, have helped to artificially keep the price of some phones high. Now that subsidies are disappearing, those overly high prices are more important a consideration to the mass consumer.

So you are saying that all smartphones will become commodity items.

 

[I7guy]

Doesn't seem to matter much.

For example, Apple has a great brand image, but historically the iPhone has only ever broken out of the 15% or less marketshare in a region if it was subsidized.

I haven't checked, but I suspect similarly high priced phones from other makers are in a similar situation.

--

As I've said for years, the up-front cost breaking point worldwide seems to be about $250.

Now, it used to take a subsidized price for people to get a decent phone for that much. But nowadays, $250 by itself can buy a pretty darned nice smartphone in many countries.

--

This is why Apple (and others) are promoting outside loan variations on subsidies. Btw, subsidies were also killing the carriers, because they had to pay the maker up front... even though they were unable because of GAAP to write the cost off over the multiple years it took to get the money back.

What does market share have to do with anything? Who cares if market share drops or rises? It's about units and revenue and profit.
[doublepost=1462112271][/doublepost]

Unless your contract runs out soon, you are likely to find your SE on the short list of diminishing functionality updates. That though of is totally dependent on what Apple does with the iPhone 7 and iOS 10.
[doublepost=1462112113][/doublepost]

So you are saying that all smartphones will become commodity items.

Like tvs and cars?

 

[dk001]

For those specifications, apple products have a fair enough price I guess compared to the competition. Lowering prices might come from lowering the quality or using old cheaper technology. What do you think of the SE prices then?

SE cost? Seriously too high. When I can grab a flagship level Android device for far less it says that Apple is deliberately over-pricing the device.
China is going to drive prices down by offering flagship devices for under $500 US, or less. Apple needs to find a way to offset that. How? That is the question.
[doublepost=1462112812][/doublepost]

...
Like tvs and cars?

TV's are a commodity item. I buy based on what feature I am looking for vs. cost. Brand loyalty? Nope.
Cars have broken into two areas: Commodity and Luxury. Even at that, the commodity level is offset by selling choke points (aka Dealers) and legislation. Something that Tesla is set to break (dealer choke).

I can see smartphones going the route of the TV (sad to see). Cars? Totally different ballpark.

 

[kdarling]

So you are saying that all smartphones will become commodity items.

I think they already are to many people. Heck, you can buy them at the checkout counter in some stores

Apple has prepared for this by deliberately locking people into their walled garden (as noted in trial testimony), so they're helped more than a bit by that. (I.e. not so much by brand loyalty per se, but by users being locked in with iOS specific apps like Facetime.)

What does market share have to do with anything? Who cares if market share drops or rises? It's about units and revenue and profit.

Exactly. Like Apple's falling unit sales and lower margins.

 

[I7guy]

I think they already are to many people. Heck, you can buy them at the checkout counter in some stores

Apple has prepared for this by deliberately locking people into their walled garden (as noted in trial testimony), so they're helped more than a bit by that. (I.e. not so much by brand loyalty per se, but by users being locked in with iOS specific apps like Facetime.)



Exactly. Like Apple's falling unit sales and lower margins.

It's hard to find fault with $40b in revenue this quarter and $53b revenue last quarter and the profits on that is the point. Not market share which has nothing to do with anything.
[doublepost=1462115363][/doublepost]

SE cost? Seriously too high. When I can grab a flagship level Android device for far less it says that Apple is deliberately over-pricing the device.
China is going to drive prices down by offering flagship devices for under $500 US, or less. Apple needs to find a way to offset that. How? That is the question.
[doublepost=1462112812][/doublepost]

TV's are a commodity item. I buy based on what feature I am looking for vs. cost. Brand loyalty? Nope.
Cars have broken into two areas: Commodity and Luxury. Even at that, the commodity level is offset by selling choke points (aka Dealers) and legislation. Something that Tesla is set to break (dealer choke).

I can see smartphones going the route of the TV (sad to see). Cars? Totally different ballpark.

I bought tvs on brand loyalty, but lately that brand let me down, so I'm switching.

As far as phones(and computers), the difference is the execution unlike cars where it's difficult to change the overall execution.

 

[smacrumon]

Internals have little relation with pricing; the low end phones would be just a few dollars less than the high end ones. And Armani clothing would be same price as a Walmart clothing.

If people are buying the price is acceptable to those consumers.

Well based on that thinking, Apple is the Walmart of phones. Designed locally, made cheap as chips offshore in closed factories. SE is way overpriced, old design, old technology. Little love went into the SE, Apple barely dedicated 5 minutes discussing it at the launch. Sad how things have turned at Apple in recent times. I'm a consumer on the look out for a new small phone, I didn't buy SE and won't be. Apple still has lost customers in the SE launch even though it is selling.

 

[Cooljam]

SE cost? Seriously too high. When I can grab a flagship level Android device for far less it says that Apple is deliberately over-pricing the device.
China is going to drive prices down by offering flagship devices for under $500 US, or less. Apple needs to find a way to offset that. How? That is the question.
[doublepost=1462112812][/doublepost]

TV's are a commodity item. I buy based on what feature I am looking for vs. cost. Brand loyalty? Nope.
Cars have broken into two areas: Commodity and Luxury. Even at that, the commodity level is offset by selling choke points (aka Dealers) and legislation. Something that Tesla is set to break (dealer choke).

I can see smartphones going the route of the TV (sad to see). Cars? Totally different ballpark.

I think most android phones with similar specifications to the SE are at the same price or higher. Take Huawei mate 8. It's price is around 760 USD. It is slightly less than the 6s price much higher than the SE price. So I think Apple's prices are not that high unless you compare it to a weak android phone.

 

[SvP]

Well based on that thinking, Apple is the Walmart of phones. Designed locally, made cheap as chips offshore in closed factories. SE is way overpriced, old design, old technology. Little love went into the SE, Apple barely dedicated 5 minutes discussing it at the launch. Sad how things have turned at Apple in recent times. I'm a consumer on the look out for a new small phone, I didn't buy SE and won't be. Apple still has lost customers in the SE launch even though it is selling.

You didn't read my post or your comprehension lacks. You're repeating your own points instead of discussing the counterpoints.

 

[smacrumon]

You didn't read my post or your comprehension lacks. You're repeating your own points instead of discussing the counterpoints.

I did read and comprehend your post and replied reiterating my point giving an example based on your reasoning while adding my own circumstance. Apple can't say it makes luxury phones while dishing up yesterday's leftovers.

 

[dk001]

I think most android phones with similar specifications to the SE are at the same price or higher. Take Huawei mate 8. It's price is around 760 USD. It is slightly less than the 6s price much higher than the SE price. So I think Apple's prices are not that high unless you compare it to a weak android phone.

Example: Nexus 6P.

 

[American Hero]

I think most android phones with similar specifications to the SE are at the same price or higher. Take Huawei mate 8. It's price is around 760 USD. It is slightly less than the 6s price much higher than the SE price. So I think Apple's prices are not that high unless you compare it to a weak android phone.

Hilarious.

An unlocked iPhone 6S with a measly 16 GB of storage is $649 plus tax.

I can get an unlocked Galaxy Note 5 with 32 GB of storage for $546.99 including tax on Amazon.

I can get an unlocked Galaxy S7 with 32 GB of storage for $629 unlocked.

I can find a Huwaei Mate 8 unlocked 32 GB for $549, and this phone should be compared to the 6S Plus price tag.

You have no idea what you're even talking about.

 

[SvP]

Hilarious.

An unlocked iPhone 6S with a measly 16 GB of storage is $649 plus tax.

I can get an unlocked Galaxy Note 5 with 32 GB of storage for $546.99 including tax on Amazon.

I can get an unlocked Galaxy S7 with 32 GB of storage for $629 unlocked.

I can find a Huwaei Mate 8 unlocked 32 GB for $549, and this phone should be compared to the 6S Plus price tag.

You have no idea what you're even talking about.

iPhones. He's talking about iPhones.

 

[ike1707]

The iPhone does not cost $199

And never did.

 

[SvP]

I did read and comprehend your post and replied reiterating my point giving an example based on your reasoning while adding my own circumstance. Apple can't say it makes luxury phones while dishing up yesterday's leftovers.

The example didn't touch the reasoning at all. What I said is that the components don't make the price. I have a 99$ no brand 12 MP 64 GB phone lying around here; should all phones go down to the lowest denominator? It's not about the components, it's about perceived worth, perceived speed and convenience, and demand.

 

[I7guy]

The example didn't touch the reasoning at all. What I said is that the components don't make the price. I have a 99$ no brand 12 MP 64 GB phone lying around here; should all phones go down to the lowest denominator? It's not about the components, it's about perceived worth, perceived speed and convenience, and demand.

In other words, the price consumers are willing to pay is in the line with said consumers perceived value.
[doublepost=1462128818][/doublepost]

Well based on that thinking, Apple is the Walmart of phones. Designed locally, made cheap as chips offshore in closed factories. SE is way overpriced, old design, old technology. Little love went into the SE, Apple barely dedicated 5 minutes discussing it at the launch. Sad how things have turned at Apple in recent times. I'm a consumer on the look out for a new small phone, I didn't buy SE and won't be. Apple still has lost customers in the SE launch even though it is selling.

So I have to repeat, even if apple is the walmart of phones are they going to be satisifed making only $160B in revenue a year at the running rate?

SE may be overpriced to you, but it seems consumers are buying it, regardless of how much "love" the SE got during the keynote. For me, I haven't yet decided if I am going to buy the iphone 7 and give my 6s to my better half, or get two 64 gb iphone SE devices. I guess I have to wait and see.

 

[smacrumon]

In other words, the price consumers are willing to pay is in the line with said consumers perceived value.
[doublepost=1462128818][/doublepost]
So I have to repeat, even if apple is the walmart of phones are they going to be satisifed making only $160B in revenue a year at the running rate?

SE may be overpriced to you, but it seems consumers are buying it, regardless of how much "love" the SE got during the keynote. For me, I haven't yet decided if I am going to buy the iphone 7 and give my 6s to my better half, or get two 64 gb iphone SE devices. I guess I have to wait and see.

Wait until late next year, it's only 16 months away. Your patience will be greatly rewarded with something truly brand new and worth your time, consideration and opening the wallet
[doublepost=1462131860][/doublepost]

The example didn't touch the reasoning at all. What I said is that the components don't make the price. I have a 99$ no brand 12 MP 64 GB phone lying around here; should all phones go down to the lowest denominator? It's not about the components, it's about perceived worth, perceived speed and convenience, and demand.

I get the components don't make the retail price. I'm not saying Apple should compete on price, but trying to pass off an old phone SE at the price is starts at is just a sign to me of a company not having any awareness of its customer base. Apple's propositions of late just don't provide any real value to consider any upgrading. That's my current perception of Apple's worth.

 

[I7guy]

Wait until late next year, it's only 16 months away. Your patience will be greatly rewarded with something truly brand new and worth your time, consideration and opening the wallet
[doublepost=1462131860][/doublepost]
I get the components don't make the retail price. I'm not saying Apple should compete on price, but trying to pass off an old phone SE at the price is starts at is just a sign to me of a company not having any awareness of its customer base. Apple's propositions of late just don't provide any real value to consider any upgrading. That's my current perception of Apple's worth.

Fair enough on that opinion. But nobody really knows what the next two iPhones will be. We'll see.

 

[jamezr]

They aren't losing sales.
They lost market share.

Not sure you are reading all the threads here on MR?
Apple lost market share BECAUSE they lost sales
They lost profits because they lost sales
Their stock tanked and they lost billions in valuation because they lost sales....
Sales go down......you lose market share
Sales go down.......you lose profits
Sales go down.......you lose stock valuation
All of the above has been reported here on MR and everywhere

http://www.idc.com/getdoc.jsp?containerId=prUS41216716

Sales of Apple Inc.’s iPhone dropped for the first time in the fourth quarter last year, as the company lost market share in an arena that is increasingly being taken over by phone makers in developing countries.

In the final quarter of 2015, iPhone sales dropped 4.4%, cutting Apple’sAAPL, -1.15% market share to 17.7% from 20.4% in the same quarter of 2014, according to technology research company Gartner.

http://www.marketwatch.com/story/ap...-fall-in-iphone-sales-says-gartner-2016-02-18

 

[SvP]

I don't have to read stories for that, it's obvious. I clearly didn't make my point. Apple is still making by far the most profit in this game. The worst thing they could possibly do is knee jerk and get down to the level of the others for the sake of market share. And while the discussion on basic business sense is going on steady here, that same knee jerk causes stock to go down. It's exactly why Samsung gives away half of their gear; business tactic.

And, while we're at it, the numbers don't make any sense at all because this includes all the low end crap that grandpa buys. They're not competing with that, atleast not low budget. Why would they? They're the only competitor in that game that can live of their savings for quite a while.

Hey but if you want to believe they're going down the toilet because of this, go ahead and sell. I don't mind, I'm buying.