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Amid global smartphone slowdown, Apple seeks to capture more “Android switchers”
Apple had a nearly $51 billion quarter, more than Google and Microsoft revenues combined. However, for Apple investors, it was a significant disappointment and represented the company’s first year-over-year revenue decline in 13 years.
The main culprit was a drop in iPhone sales in “Greater China” and elsewhere. The company sold 51.2 iPhones in the quarter, which ironically beat Wall Street analyst expectations, but was roughly 10 million fewer devices than a year ago.
Most of the analyst questions at the end of the earnings call this week focused the outlook for growth and specifically the iPhone. Apple responded that India was a big new opportunity for the company. However, in mature markets, Apple discussed the prospect for grabbing more share from Android.
During the call Apple CEO Tim Cook said, “We added more switchers from Android and other platforms in the first half of this year than any other six-month period ever.”
Data aggregator eMarketer offers support for Cook’s remark. However the company points to BlackBerry and Windows Phone as the primary sources of market-share growth for the iPhone in the US, rather than Android switchers. The company sees Android’s market share gaining slightly this year.
According to Strategy Analytics, smartphone shipments declined by 3 percent on a global basis in Q1 2016. This is noteworthy because it’s the first time that the market has contracted year-over-year. Samsung was the leading global smartphone maker, followed by Apple.
Though smartphone penetration in the US has reached 80 percent (more than 90 percent in some demographic segments) there are still many countries around the world, such as India, where penetration is still relatively low. The challenge for Apple in developing markets, notwithstanding the new iPhone SE, is the cost of the iPhone, which is generally much more expensive than Android competitors.
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