Iphone SWOT

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.



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 performances 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% to 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, Samsung 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% and 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 reduced some of its prices.
  • However, even as sales were dropping, average prices for Iphones kept increasing, partly compensating for 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 or 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 in 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 emotional 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.

Proposed next steps:

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