For the first time in more than a decade, last April Apple announced a drop in profits mainly due to the loss of market share in China and the decline in iPhone sales globally, among other factors.
During the second fiscal quarter of 2016 Apple sold ten million less iPhones than during the same quarter of the previous year. This generated great concern. Shares started to fall and some investors started selling their shares. And now, with Apple falling to fifth place in China, it seems that things are not going to improve.
Everything indicates that the fall in sales will continue
At the moment, two big questions loom about the immediate future of Apple and specifically, about the future of the iPhone. Has it peaked at the sales level? And if so, will they continue to decline?
It seems that Apple has indeed peaked. As strange as it may sound many specialists claim that the company no longer has a new audience to sell its iPhone to. If this is so, what option do you have? Well, basically, retain your current customers, retain them and focus on renewing their devices.
Apple's annus horribilis
The year of 2016 is a major turning point for Apple, and not precisely in positive terms. At a global level, iPhone sales are down, as have sales of other equipment and devices. The value of its shares falls, many investors flee (although others see business and take advantage of the opportunity) and many other smartphone firms are literally passing over it.
On the left, the Xiaomi Mi 5, a premium smartphone whose price is almost half that of an iPhone 6s (on the right)
China, a tough nut to crack
China is the country where Apple placed great hopes. It is logical if we pay attention to the double fact that it is the most powerful economy on the planet, and the most populated market in the world. Nevertheless, China is not responding to the expectations that Apple had placed on them. The Chinese, large in number but with serious economic inequalities, prefer the cheaper national product. After all, they are the ones who make the iPhone. Thus, although the company does not cease to open new stores and make continuous winks to the giant that already woke up long ago, and although Tim Cook visits the country almost as if he were a statesman, Apple is only the fifth largest smartphone manufacturer. in sales.
As I advanced above, competing firms are flying over it in the purest style Apple Maps Flyover.
According to the latest report released by Bloomberg and made by Counterpoint Research, which you can see under these lines, Huawei is the one who takes the initiative in sales in China. And in fourth and fifth position, almost hand in hand, Xiaomi and Apple, respectively. In between are Vivo (second position) and Oppo (third place). But the most striking thing about this situation is that the four sales leaders in China are Chinese.
The causes
The causes of this situation are multiple, but I will dare to point out the most obvious:
- The chinese have learned. Their cheap work for large multinationals like Apple has led them from making copies to creating original, quality products.
- In the last times, Apple seems to be showing obvious signs of a lack of creativity and innovation. If we think about it, and being objective, there is not much difference between an iPhone 6 and a Xiaomi Mi 5.
- The four brands that overtake Apple, all of them without exception, offer premium range terminals to much more competitive prices than Apple. In Spain, a Mi 5 costs almost half that of an iPhone 6s.
- And globally, buying anything from China is getting easier, which means greater competition for Apple also outside the Chinese territory.
- If the Chinese put the cheap laborFor what reason will they later want to pay a high price for it?
Sure there are many reasons in addition to these, perhaps even more important that explain the fall in sales of the iPhone but in any case, Apple must give serious thought.
On July 26, Apple will publish the sales results for the third fiscal quarter (April, May and June), and Everything indicates that the decline is not a transitory situation.
