The iPhone may be the most popular smartphone model around right now (depending on which country you’re stood in), but that doesn’t mean it – or Apple – are gonna be here forever, as Clare Hopping reports…
Following Apple’s encouraging sales results, it would seem the iPhone is unstoppable.
In fact, the company reported it sold 35.2 million iPhones between March and June this year, which equates to an increase of 13 per cent on the same period last year.
With the launch of the cheaper iPhone 5C, Apple is also capturing the attention of the BRICS markets, reporting that Brazil, Russia, India, China, and South Africa are currently the company’s biggest growing markets. The most notable success is China, where iPhone sales rose by a pretty damn nifty 48 per cent against the same period in 2013.
The big ‘but’…
However, over the last few years, iPhone sales have been on a bumpy road. Despite the most recent figures looking good, last year’s results were below Wall Street’s expectations. And in comparison to other smartphone manufacturers, Apple’s iPhone future looks bleak, especially as it relies on the smartphone for 60 per cent of its annual revenues.
Kantar reported in January that although the number of people purchasing iPhones is growing, so is the number of people signing up to Android and even Windows Phone devices – despite the latter being widely known as the outsider.
If you look at how Windows Phone and Android sales are growing worldwide, it’s clear that although iOS is in second place in terms of market share, its downward curve is starting to represent BlackBerry’s downfall.
Looking at data from Statista shows the massive battle iOS has against its rivals, particularly Android. It would seem Apple’s golden year was back in 2011, when sales were at their peak. But even then, it couldn’t come close to Android’s share.
If you’re willing to study IDC’s data over the last three years, you’ll see the same trend: Android running away with the market share and iOS dropping. In fact, it’s only a couple of percentage points above where BlackBerry was three years ago. And we all know how wonderfully Blackberry’s little tale ended, right kids?
Fear of the competition
An internal memo that Apple sent to employees in April 2014, during the Samsung vs. Apple patent trial, shows how petrified Apple is that its rivals will gain market share.
The memo said: “Competitors have drastically improved their hardware and in some cases their ecosystems,” and noted that the competition was not only focussing on more budget devices to capture both ends of the market, but also “spending ‘obscene’ amounts of money on advertising and/or carrier channel to gain traction.”
According to Kantar’s April report, Apple seems to have responded to these concerns by throwing bucketfuls of money into advertising. The Wall Street Journal revealed that Apple’s ad spend was catching up with Samsung’s, with the company spending more on TV ads in 2013 than its entire 2012 budget.
If Apple is chucking this much money at advertisers, presumably the company knows it’s in trouble, and needs to get back in the public line of sight.
The iPhone isn’t developing as fast as other smartphones
Look at the most popular rival phones at the moment and they all have one thing in common: big screens. The Samsung Galaxy S5, LG G3 and HTC One M8 all have displays larger than 5-inches and that’s clearly where the market is going, love it or lump it.
Apple is rumoured to be launching the iPhone 6 with a 4.7-inch screen and possibly a phablet with a 5.5-inch screen in September, but it may be a case of too little, too late. And while the iPhone 6 may attract current iPhone users who are looking to upgrade, everyone knows those manufacturers making large-screened Android devices do it best, because they’ve been making such devices for the last two years.
Added to that, you can expect to pay a hefty price for a phablet-style iPhone, especially if it includes the sapphire display as rumoured. Considering even the ‘budget’ iPhone 5C is way too expensive for most of the world’s budgets (according to IDC and basic common sense), the iPhablet will need to come in at less than £200. Frankly, you’d do better sticking a tenner on Sunderland FC to win the Premiership, and then blast off in a red and white spaceship to conquer another galaxy.
Everything Apple seems to do in recent times is a bit too late to the market, although the company will argue that’s because it knows people will still buy the device without such features. But customers are getting savvy about what they want, and they’re not afraid to jump ship for a sexy quad HD screen or an awesome new camera.
In Q1 2014, Apple had the lowest market share it’s had, pretty much ever. If the curve keeps going in a downwards direction, there’s no denying it: the iPhone will be dead by 2018.
Do you reckon Apple is doomed, or will the iPhone 6 be a fresh resurgence for the Californian company? Let us know what you think in the comments below.
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