New quarterly data ranks iPhone high in China & US despite challenging conditions

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in iPhone
iPhone loyalty is at its strongest point in the U.S. since 2012, and despite numerous obstacles in China, Apple has managed to reclaim a position as the bestselling smartphone brand in that region, according to a new December-quarter research report from Kantar Worldpanel ComTech.




The company now has 27.1 percent share of the Chinese smartphone market, and the top three selling models, Kantar said on Wednesday. The iPhone is facing threats from a number of directions, including a troubled local economy and Android phonemakers like Huawei and Xiaomi. During a conference call on Tuesday, Apple CEO Tim Cook admitted that the company is beginning to face a tougher time in Greater China, particularly Hong Kong.

The company's U.S. share reached 39.1 percent during the quarter. Android, however, made progress in both the U.S. and the "big five" European markets (Great Britain, Germany, France, Italy, and Spain), advancing to 59 and 71 percent, respectively.

Apple's customer acqusition from Android also declined year-over-year from 13 percent to 11 percent. Simultaneously, the contribution of first-time smartphone buyers to iPhone sales dropped from 20 percent to 11 percent.

Althouh Apple recorded its most financially successful quarter ever on Tuesday, iPhone sales grew compartively little year-over-year. The company in fact guided to its first-ever iPhone sales decline in the March quarter, though it has tried to assuage fears by pointing out the decline would be relative to unexpectedly high sales from a year ago.

Comments

  • Reply 1 of 13
    tzeshantzeshan Posts: 1,965member
    Apple was too obsessed with margins and ASP to not releasing a 4" model along with 6Ss.  It hurts in sales in return. 
    asdasd
  • Reply 2 of 13
    steviestevie Posts: 956member
    People still love Apple no matter how many nasty things the analyst say.
    cali
  • Reply 3 of 13
    jdgazjdgaz Posts: 356member
    Comparisons to Android are really worthless. Comparisons to individual companies using an Android OS would be much more meaningful, but obviously would not promote the bear case.
    calinolamacguy
  • Reply 4 of 13
    flaneurflaneur Posts: 4,509member
    tzeshan said:
    Apple was too obsessed with margins and ASP to not releasing a 4" model along with 6Ss.  It hurts in sales in return. 
    Why would you ignore engineering and production constraints as factors? Do you think iPhones grow on trees?
    nolamacguy
  • Reply 5 of 13
    bobschlobbobschlob Posts: 1,074member
    Yeah, not real pretty (though China very optimistic). Here's the chart.


    cnocbui
  • Reply 6 of 13
    There is only so much premium market. There is only so much mid market that will stretch to premium. It is fairly simple. Apple now must find a way to maintain what it has work for. If they can release a 4" model it will be more of a premium model but will open a bit more of the market as it will reach a slightly lower price point than it is currently in. Apple will need to find other markets to disrupt if it wants to continue heavy growth. Enterprise, government and school segments could boost existing products if done right. I just don't see Apple releasing a "cheap" iPhone in the name of growth...
    gilly017
  • Reply 7 of 13
    There is only so much premium market. There is only so much mid market that will stretch to premium. It is fairly simple. Apple now must find a way to maintain what it has work for. If they can release a 4" model it will be more of a premium model but will open a bit more of the market as it will reach a slightly lower price point than it is currently in. Apple will need to find other markets to disrupt if it wants to continue heavy growth. Enterprise, government and school segments could boost existing products if done right. I just don't see Apple releasing a "cheap" iPhone in the name of growth...
    Yep, you nailed it. This is a challenge not only for iPhone but for iPad as well.  There are a lot of "good enough" smart phones available now especially for the ultra price conscious consumers.

    And not sure how to read Cook/Maestri's newish narrative regarding services and 1B installed base. Almost sounds like there is a little less obsession going into ASP and maybe a shift into halo/expansion of services & profits.

    I wouldn't be surprised if Apple dives a bit into lower cost tier products...as long as there is a strategy to increase revenue via services.

    Apple ecosystem is still incredibly strong. Something that almost all analysts/pundits miss.
    caligilly017
  • Reply 8 of 13
    calicali Posts: 3,495member
    tzeshan said:
    Apple was too obsessed with margins and ASP to not releasing a 4" model along with 6Ss.  It hurts in sales in return. 
    Crap idea.

    If Apple releases a "C" model mid-cycle this would disrupt the whole industry. I've been saying it for a while now. It would give competitors a lot less breathing room while offering a lower cost model. This would keep the media, fans and competitors on their toes close to year round.
    gilly017
  • Reply 9 of 13
    cnocbuicnocbui Posts: 3,613member
    There is only so much premium market. There is only so much mid market that will stretch to premium. It is fairly simple. Apple now must find a way to maintain what it has work for. If they can release a 4" model it will be more of a premium model but will open a bit more of the market as it will reach a slightly lower price point than it is currently in. Apple will need to find other markets to disrupt if it wants to continue heavy growth. Enterprise, government and school segments could boost existing products if done right. I just don't see Apple releasing a "cheap" iPhone in the name of growth...
    The problem with pinning hopes on a cheaper 4" model is that it will be up against even cheaper and extremely capable  Android phones coming out of China.  Faced with a very capable 5" screened Android phone for half the price vs a much smaller 4" iPhone, I don't think the iPhone is going to look like great value.

    Government and school segments are reliant on limited funds.  Apple has as good as  lost the school market to Chromebooks.  Enterprise would be a good bet.

    China is really slowing fast.  Their actual rate of growth may be only half the official rate:  "Beijing reported earlier this month that its 2015 economic growth came in at 6.9 percent — a 25-year low. Most outside experts have expressed doubt about the veracity of the government economic data, instead suggesting that the real growth rate was more likely between 3 and 4.5 percent."

    Despite Cook being upbeat on India where growth is around 8%, Apple have had to cut prices a couple times to generate any sales.  It will likely be quite some time before per capita income increases there to make Apple prices an option for any but a very small minority.

    2016 looks to be shaping up to be a really miserable year for much of the world, not just Apple.
  • Reply 10 of 13
    lkrupplkrupp Posts: 7,060member
    tzeshan said:
    Apple was too obsessed with margins and ASP to not releasing a 4" model along with 6Ss.  It hurts in sales in return. 
    Blathering nonsense.
    nolamacguy
  • Reply 11 of 13
    asdasdasdasd Posts: 5,293member
    bobschlob said:
    Yeah, not real pretty (though China very optimistic). Here's the chart.


    The us is disappointing. However this is 1Q. Given that iPhones last longer I bet overall share is higher. 
  • Reply 12 of 13
    asdasd said:
    bobschlob said:
    Yeah, not real pretty (though China very optimistic). Here's the chart.


    The us is disappointing. However this is 1Q. Given that iPhones last longer I bet overall share is higher. 
    This is the impact of the race-to-the-bottom pricing of incredibly cheap Android "SmartPhones" soaking up market share of what's all-in classified as the "smartphone" market. But these cheap products aren't every really comparable to iPhones and flagship Android devices. And this chart is misleading, as a result. Total sales of premium cars are up, despite the fact India and China buying huge numbers of new compacts diluting their total market share of the car market. Same ridiculous comparison.
  • Reply 13 of 13
    asdasdasdasd Posts: 5,293member
    cnocbui said:
    There is only so much premium market. There is only so much mid market that will stretch to premium. It is fairly simple. Apple now must find a way to maintain what it has work for. If they can release a 4" model it will be more of a premium model but will open a bit more of the market as it will reach a slightly lower price point than it is currently in. Apple will need to find other markets to disrupt if it wants to continue heavy growth. Enterprise, government and school segments could boost existing products if done right. I just don't see Apple releasing a "cheap" iPhone in the name of growth...
    The problem with pinning hopes on a cheaper 4" model is that it will be up against even cheaper and extremely capable  Android phones coming out of China.  Faced with a very capable 5" screened Android phone for half the price vs a much smaller 4" iPhone, I don't think the iPhone is going to look like great value.

    Government and school segments are reliant on limited funds.  Apple has as good as  lost the school market to Chromebooks.  Enterprise would be a good bet.

    China is really slowing fast.  Their actual rate of growth may be only half the official rate:  "Beijing reported earlier this month that its 2015 economic growth came in at 6.9 percent — a 25-year low. Most outside experts have expressed doubt about the veracity of the government economic data, instead suggesting that the real growth rate was more likely between 3 and 4.5 percent."

    Despite Cook being upbeat on India where growth is around 8%, Apple have had to cut prices a couple times to generate any sales.  It will likely be quite some time before per capita income increases there to make Apple prices an option for any but a very small minority.

    2016 looks to be shaping up to be a really miserable year for much of the world, not just Apple.
    Most of Apples existing competitor's in China are phablet based.

    Apple has a huge brand. It can easily win with a cheaper (but not cheap model) because of the brand, brands are actually more important in poorer developing countries for two reasons - one, as a status symbol and two because if the device is relatively more expensive to your income then you don't spend that money on trash. You (and this seems paradoxical until you think about it) can't afford to.   And android is an anti-brand.  Most, not all, android devices are trash. It's harder for the top end android phones to make up in their specific manufacturing brand for the general aura of cheapness surrounding the OS. 

    Put it it this way, Apple is 27% in China of the market with devices that are probably in the top ten percentile in price. It probably dominates that market 8-1. It has to worry about diluting the brand a bit by going down market (but less so if there are clear differentials in the cheaper model like a smaller screen) but it will probably dominate whatever mid-high segment it enters. 

    As as for China's economic problems, same rules apply to Android. Apple will gain share with a 4" model even if the over all market stalls or reverses. It mightn't do as well as it could have done absent the economic problems but better than without the 4". 
    edited January 2016
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