Apple’s iPhone struggles to sell in good numbers in the new markets that the company is expanding into, but the company still makes truckloads of money while fighting to not lose more marketshare. Unfortunately, the iPhone 11 series won’t make a difference.
The iPhone is an iconic item in the smartphone world. For one, it marries hardware, software and cloud in a way that no other smartphone does up till now. And it still makes the huge portion of the industry’s profits. The iPhone is no slouch.
First launched in the United States in 2007, it quickly became a darling of Americans, who have since regularly queued up for days to get their hands on the latest iPhone release, year after year.
While Google’s Android OS is more widespread in use across the planet, having over 80% of the global marketshare, it is Apple’s iPhone that carts away the smartphone industry’s profits.
iPhone in the United States
The United States has remained the Apple iPhone’s strongest market, with the platform having 48% of the country’s marketshare . Updated: The fact that mobile users are able to obtain the iPhone on a contract basis is a strong factor working in Apple’s favour in the US (and to a lesser extent in Europe). Apple had conquered the great North America, where there was big money to spend.
iPhone in Europe
The iPhone easily sold well in Europe where purchasing power is very good as well, and there Apple has held on to 25% of the market till date. But the European smartphone market soon became largely saturated too. And so, Apple’s focus shifted to China.
iPhone in China
With both North America and Europe becoming saturated smartphone markets some years ago, Apple has looked to explore new markets, casting its eyes to China, then India, alongside other markets in Asia, Middle East, and Africa.
In China, Apple ramped up sales but has hit a decline in recent years, and stood at 7.4% in Q1 2019, according to a report by Canalys . It was the brand’s worst decline in two years.
iPhone in India
India is the next frontier. The US market is saturated. Europe is. China is. And so, Apple has had to double down on selling in India. But as at the end of 2018, the iPhone had a mere 1.2% marketshare in this Asian country.
As a matter of fact, Apple opened some iPhone production facilities in India to effect lower prices. But even that has not helped. India is a price-sensitive market and the cheapest iPhone models are priced way above the earning power of most of the population. And as it is in India, so it is in much of Asia and Africa.
However you look at it, perhaps North America and Europe are the only places where the iPhone sells well. Once those markets got saturated, Apple’s iPhone struggles began.
2019 and iPhone 11
Apple has announced three iPhone models this year. The most affordable of them is the $649 iPhone 11. That is way above the mark that can turn things around for it in India and any of the emerging markets where Apple is hoping to ramp up sales.
The dazzling colours of the iPhone 11 will not help it sell. The dual camera at the back will not. As a matter of fact, there is nothing tantalizing about the iPhone 11 that can sway the odds in its favour. It is bound to lose more ground in countries outside of its core markets. And that holds for the iPhone 11 Pro and Pro Max as well.
Chinese smartphone makers are churning out more affordable smartphones with more features than the iPhone 11 offers.
Where are the 5G iPhones?
It also does not help in the high-end market that this year’s iPhones do not have 5G support. Every other major manufacturer either has or is planning to have a 5G phone on sale this year. In China, Japan and Korea especially, that is a huge selling point. And here is where it gets worse – even US subscribers who want a taste of 5G have no iPhone options. They have to look to other brands for their 5G fix.
Samsung alone is reported to have sold over 2 million 5G smartphones already . Every big smartphone brand, except Apple, is making money off 5G.
The first 5G iPhones won’t arrive until 2020 – a year from now. A year is a long time in the smartphone world. Between now and Q3 2020, Apple will lose more ground in the smartphone space. And it won’t be because of price and the lack of 5G alone.
The US-China Trade War
The ongoing US-China face-off has become a matter of national pride to the Chinese since Huawei was banned from American hardware, software and services. Many residents of China will vote with their money – the result being lower sales of the iPhone in China.
2019 will be a hard year for the iPhone, no doubt. But Apple is not ill or dying. Far from it. The company still generates much of the smartphone industry’s profits. Despite slowing iPhone sales, Apple generated 73% of the entire profit made by the smartphone industry in 2018 .
It is declining though, which is no surpise. Apple’s current business model is profitable in North America and Europe, but largely unprofitable elsewhere. Unless the company changes it, there is no chance of increase in iPhone sales,.