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Research Outline
Prepared for Tom T. | Delivered August 5, 2019
Iphone SWOT
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Goals
To find out if Iphones are losing some of their prestige outside the United States, and why that is happening. To understand strenghts and weaknesses of Iphones in international high-end smartphone markets.
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Early Findings
Q4 2018
The Iphone is currently
losing market share
mainly to Chinese competing brands.
The Iphone is struggling due mainly to Chinese competitors who offer smartphones with
similar performance
s at a lower price.
Markets where sales are falling include
France and Thailand
, the latter being the second-largest smartphone market in the South-East Asia region, where Iphone shipments were halved.
Samsung
's shipments to the country were also reduced.
Oppo's sales grew by
70% t
o reach the top spot in Thailand, and relegate Samusung to the second spot, due to a negative growth of 36%.
The podium is completed by Huawei in the third position with a growth of 73%. Apple is only fifth with a drop of 52% and
a 9% market share.
Despite losing their position of markets leaders in some Asian markets, S
amsung and Apple
maintained their hold on Europe with the first and second place, threatened closely by Huawei who could soon take Apple's second spot. In Q4 2018, Iphone shipments to Europe
dropped by 6% a
nd Huawei and Xiaomi saw their shipments grow by 55% and 62%.
As the US is engaged in a
trade war
with China and tariffs being introduced on Chinese goods including phones destined to the US, Chinese companies have decided to target other markets more aggressively. These Chinese brands are offering
prices that are difficult
for other brands to match.
Currently, Chinese phone companies represent
32% of Europe's
smartphones sold.
Q12019
During Q1 2019, Iphone shipments to regions such as Europe, the Middle East and Africa (EMEA) dropped by
2.4 million
units, or 22.7% compared to Q1 2018.
In this market, Apple suffered from an economic slowdown and new competition, which made it lose market share and drop from
18.5% to 14.74%.
In reaction to this situation, the American company has launched
promotions and reduce
d some of its prices.
However, even as sales were dropping, average prices for Iphones kept increasing,
partly compensating f
or the loss in revenue due to volume drop.
Samsung's sales also decreased by
7%
in the region, while Chinese company Huawei recorded impressive results with a 66% jump in shipments to the region with 13.5 million units.
Some of the reasons for these developments in the EMEA market include the fact that users
keep devices longer,
and that the Iphone is not an unstoppable item anymore in terms of sales.
Faced with this reality, Apple have started to focus on developping their services further such as
iCloud, Apple
Music, Apple News+...
Reasons for the drop
A lack
of real innovation
in the Iphone range, as well as increasing prices, have been part of the reason why sales are falling.
As there are
no major innovations o
r differences between new phone and older ones, users hold on to their mobiles for
3 to 4 months
longer as they do not see the value of getting a new one.
Smartphones sales
, in general, fell in the two largest markets worldwide: The US and China.
Apple's reputation dropped from
5th to 29th i
n a survey conducted on 28,000 adults.
Weaknesses
Apple is currently relying on its "
brand name"
rather than the innovations they were famous for.
What consumers want from Apple is an e
motional connection
through unique design and features, but the company is only improving technology and features in its new models to catch up with other brands.
Consumers are confused by the
range of models.
Strenghts
The company has invested heavily in
perception quality,
with the design of its phones and shops, marketing campaigns and digital interface. This has created brand image
that is attractive
for people to be associated with.
The Iphone is positioned as a
luxury product
in the tech space and therefore has its specific clientele. This clientele has a high income and is less sensitive to
changes in prices.
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