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

[Thunderhawks]

cell phone market is saturated, different pricing mechanisms by cell providers are making increasingly more expensive to own a new phone. looking forward to how Apple will face this serious concern going forward.

They have to buy T-Mobile or/and start their own mobile services incl. a worldwide Wi-Fi net.

Take out all the data caps.

Would probably not offend Verizon, ATT etc. as they have been sold all the iPhones one possibly can.

Still waiting for that pygmy photo which would tell us market saturation is complete.

Plus, since Apple is looking into being a content provider, make a sequel to "The Gods Must Be Crazy" with iPhones.

 

[PBRsg]

Yet another stupid chart showing sales of ALL Samsung smartphones when most of them are low-end junk phones. Same goes for the other manufacturers listed.

Next up IDC should show a chart comparing the sales of Toyota to Mercedes and tell us all how Mercedes market share is so much lower than Toyota.

I am getting tired of this rubbish as well. They should just compare flagship phones, otherwise it's apples and oranges.

 

[rdlink]

I think you need to take a closer look at the vast variety of Android phones on the market, they're hardly only just cheap junk phones - Samsung, HTC and others' flagship models are all anything but 'cheap' (in price or in features).

I understand that their flagship models are comparable to the iPhone in build quality and design (finally). But other than the Galaxy Sx models there are very few "flagships" being sold.

 

[RedOrchestra]

I am getting tired of this rubbish as well. They should just compare flagship phones, otherwise it's apples and oranges.

It's a reflection of the TOTAL smartphone market and shows where the market is spending it's money.

 

[I7guy]

It's a reflection of the TOTAL smartphone market and shows where the market is spending it's money.

We already know where the market is spending their money...40b worth.

 

[BootsWalking]

Bloomberg just posted a well-written article:
http://www.bloombergview.com/articles/2016-04-27/there-s-something-rotten-in-the-state-of-apple

 

[RedOrchestra]

We already know where the market is spending their money...40b worth.

And from the latest quarter and projected NEXT quarter it looks to be pulling away from Apple.

From the Bloomberg article cited above

"The iPhone is so expensive that the company captures more than 90 percent of all global smartphone profits while holding down less than a 20 percent market share of unit shipments.

That says it all, don't it?

 

[639051]

I bought an XPS 13 over a MacbookPro due to pricing and using Windows 10 on my desktop for awhile. For what I need the price was much better and the build of the XPS 13 is very good as well. I still love my iOS devices and would not consider another device currently.

 

[joueboy]

I've been an Apple user for a long time. Things is very exciting back in the days. Now that others are catching up or much better depends on the user. The only deciding factor for them is the price. The problem with Apple is that the price didn't went down, it feels like it went up and the least thing they offer to you 16 gig iPhone & 5 gig icloud. Eventually people like me would realize that there are better choices.

 

[Benjamin Frost]

Apple is not thinking about market share...making a profit is the name of the game....

Both are important, but getting the balance right is the thing.

Remember the iPod? Apple trumpeted their market share dominance of over 60%, and that was achieved with great profits, too.

I believe that if Steve Jobs were alive, he would have achieved a better balance of profits to marketshare, which would have led to much greater sales of iPhones and much greater marketshare today. They would have still made great profits, but not as much as under Cook. In addition, he would have ensured that the iPhone was a much more compelling device, so the public went mad for it.

 

[vmistery]

It's partly because phones are lasting so much longer. An iPhone 5 is still a perfectly usable phone for most things. Not sure if have said the same about the 3G when the 5 was current.

 

[PlainviewX]

No, it seems to be the pricing entirely, not storage.

When 16 gig is your entry level option, it's storage. 16gig as a standard is four years ago. It's absurd that Apple continues with it as entry level and $100 premium to double memory is absurd as well.

 

[crsh1976]

I understand that their flagship models are comparable to the iPhone in build quality and design (finally). But other than the Galaxy Sx models there are very few "flagships" being sold.

HTC has been making phones with a sturdy aluminum casing (HTC One and up) for a few years, for example. The Nexus-branded phones Google sponsors, built by LG, Samsung, Moto or Huawei aren't exactly push-overs because they're mostly made of plastic either.

 

[I7guy]

And from the latest quarter and projected NEXT quarter it looks to be pulling away from Apple.

From the Bloomberg article cited above

"The iPhone is so expensive that the company captures more than 90 percent of all global smartphone profits while holding down less than a 20 percent market share of unit shipments.

That says it all, don't it?

It says it all, but what it doesnt say is that the competitions flagships phones are just as expensive but the price drops like a rock after launch.

 

[EricTheHalfBee]

The argument can be made with Apple too. The 5SE, 5S, etc are all still counted in Apple's market share and are technically considered "lower end" phones today. So if you're going to count out Samsung's lower end phones, you have to only go by what Apple's numbers for the current flagship products are.

Please. A 2 year old 5S is still far more powerful than those $99 phones Samsung sells, which are nothing more than glorified feature phones they classify as smartphones.

 

[thomasguide]

Wasn't the original iPhone $399 with a contract?

No it was not, the original iphone was $599 with no contract. Then 5-6 months later there was a price correction to $399, again no contracts. I know this because I bought an iphone for my nephew at $399 for a Christmas gift. I walked in to the Apple store paid $399 plus tax and walked out with a phone no 2 year contract. The 2 year deals started maybe a year later and iphone retail price shot up to $649. Of course now you could get them for $199 with a 2 year commitment.

Those days are over now, there has been nothing special about any iphone since the iphone 4. They got bigger and faster and 64 bit. But battery life remains a huge problem, storage at 16GB is a joke, and really what is the reason I would want to drop $650-$850 on a new iphone? Android phones have caught up and some have even surpassed Apple. So it's starting to hit them.

If they want people to keep upgrading the next device needs to be beyond spectacular and a complete shock to everyone. 16GB should be dropped, the $100 premium for memory upgrades needs to go down to $50. Wireless charging and quick charging should be added, screen should be shatterproof like droid turbo, water resistance should be equivalent to Samsung or be better. Micro sd card should be allowed. Spend some of that ridiculous $100 billion to develop a better battery.

Price it at $550-$600 then sales will skyrocket again. But they won't do any of those things and the slide will continue.

 

[I7guy]

Both are important, but getting the balance right is the thing.

Remember the iPod? Apple trumpeted their market share dominance of over 60%, and that was achieved with great profits, too.

I believe that if Steve Jobs were alive, he would have achieved a better balance of profits to marketshare, which would have led to much greater sales of iPhones and much greater marketshare today. They would have still made great profits, but not as much as under Cook. In addition, he would have ensured that the iPhone was a much more compelling device, so the public went mad for it.

I thought the public has been going mad for the iPhone, up until this last quarter sales were off the charts. Sales are still off the charts, just a little less off the charts.

 

[EricTheHalfBee]

Mercedes doesn't see Toyota as a competitor but Apple clearly does see Samsung as one.

You can bet Mercedes sees certain Lexus models as competitors to certain Mercedes models. Just like certain Samsung phones (namely the Galaxy S and Note) would be competitors to the iPhone. The rest of the junk they sell Apple doesn't care about. Just like Mercedes doesn't care about Toyota Corolla sales.

 

[doelcm82]

When 16 gig is your entry level option, it's storage. 16gig as a standard is four years ago. It's absurd that Apple continues with it as entry level and $100 premium to double memory is absurd as well.

That's not true.

 

[Elbon]

I don't need every year a new iPhone

Same here. I'm still very happy with my iPhone 6. Maybe I'll upgrade when the 7 comes out, or maybe I'll wait for the 7S. I need to replace my 2010 MBP this year so that's going to take priority.

 

[RedOrchestra]

It says it all, but what it doesnt say is that the competitions flagships phones are just as expensive but the price drops like a rock after launch.

The market doesn't care about your definition of "flagship" - they just want a smartphone to send messages and pictures of their kids to their friends and EVERY smartphone does that - you sure the hell don't need a $1,703 CDN 6s Plus to do that.

 

[PizzaBoxStyle]

I don't think you're aware of how rich Apple actually is. Even IF Apple doesn't sell any iPhone from now on it will takes decades before Apple is flat broke and only when Apple doesn't sell any product from now on. And that's even an understatement.

There is no reason why Apple couldn't make another hit. I think the iPhone 8 would be interesting....
And doomed? Less profit still means profit.... ;-)

That might be true if the company were to remain static through that entire period of unprofitability, BUT just think of the panic that would ensue, the brash decisions and austerity that would be carried out. Not to mention all that cash sitting overseas that they'd have to bring in (and pay the tax on) to keep the Cupertino operation afloat.

 

[Elbon]

Apple is not thinking about market share...making a profit is the name of the game....

For investors, increasing profit is the name of the game. It's not enough to simply make a lot of money if growth is flat.

I'm not saying I agree with that, but that's how Wall St. looks at it.

 

[LordVic]

When 16 gig is your entry level option, it's storage. 16gig as a standard is four years ago. It's absurd that Apple continues with it as entry level and $100 premium to double memory is absurd as well.

I think it's a combination (nothing exists in a vacuum)

The iPhone is a premium priced phone. it's a flagship that is priced at a level that implies flagship.

yet, when you boil the iPhone down to specs. it doesn't meet other phones flagships at the same price. Outside of the A9 CPU, most of everything else in the iPhone is of lower spec in some fashion than what you get from same priced flagships from other manufacturers.

If you're looking purely at the math and number
The entry level iPhone 6s is $650 and you get.
- 16GB storage
- 2GB RAM
- Approximately equivelant to a 768p LCD Display.
- 1715 MAh battery

Meanwhile, the flagship comparison to other devices, lets say, Samsung S7 also at $650
- 32GB storage
- 4GB RAM
- 1440p AMOLED display rated as best display in the phone business
- Best Camera in most shootout comparisons.
- Expandible SD Card storage
- Fully available / functioning NFC (available outside of payment software)


Now, use is more than just pure specs. You could argue that iOS has it's own Value (But you can argue that so does Android). You can argue that "fit and finish" too has value, but that gap is so close now, that many hvae said that the S7 is nicer built / designed and is subjective.

So at the end of the day. Apple is actually offering far less technology, at similar prices to the competition.My question is, if volume of iPhone sales drop and revenues decrease from this drop, how does Apple continue to maintain 40% profits? do they cut more out of the iPhone? do they raise prices? Or do they bite the bullet, let profit margins drop a bit, but start offering more to the consumers?

 

[I7guy]

The market doesn't care about your definition of "flagship" - they just want a smartphone to send messages and pictures of their kids to their friends and EVERY smartphone does that - you sure the hell don't need a $1,703 CDN 6s Plus to do that.

The market sure as heck does care; else how could Apple make 50b and 40b respectively in two quarters.