February 16, 2018 at 13:56

Journalists suspected Apple's problems based on Tim Cook’s response in an interview



    Image: iphonedigital | CC BY-SA 2.0

    During a conference call about Apple's sales results, Tim Cook, the company's chief executive, for the first time refused to answer the question of how many people switched from Android to IOS during the reporting period. According to him, since the iPhone X began to be sold recently, now the company does not have enough data to answer. Earlier, he always gave analysts approximate data on the number of new users.

    According to Business Insider, the whole point is that Apple’s market position has been shaken. The appearance of the iPhoneX costing $ 1,000 in the market led to a 1% drop in smartphone sales.



    The company's profit grew only due to the increase in the cost of a new smartphone: on average, the price of the iPhone X is at least $ 100 more than the cost of previous models of smartphones. That is, Apple sells less, but more expensive.



    Significant profit for the company is the purchase of applications in the App Store and music in iTunes. These services could raise funds, even if the number of users continues to decrease. However, the absolute amount of revenue from applications and other services decreased by 0.4%. compared with the previous quarter, despite the growth in revenue of this segment relative to last year's figure (+ 18%).

    Finally, Apple products can no longer compete with Android. Four years ago, the iPhone was ahead of its rivals in many ways, but now Google’s Pixel and Samsung’s Galaxy Note could be a worthy replacement. Android smartphones are cheaper than the iPhone, and often their new products are even popular with loyal fans of Apple.

    As Kantar’s research shows, in 6 out of 10 Android regions, 70% of the smartphone market is owned:



    This is the main danger for Apple: the company is asking too much for a product that objectively cannot be better than its cheaper competitors. Perhaps that is why Tim Cook refused to discuss the number of users who switched to iOS with Android at a press conference.

    According to ITI Capital analysts, Apple is really facing serious pressure from competitors, but to say that the company has serious problems is premature:

    The decline in the share of sales of iOS smartphones in the US, a key market for Apple, is certainly an alarming signal. At the same time, the company's progress in the Chinese market should be noted: the share of sales of iOS smartphones in the last reporting quarter increased by 10 percentage points compared to the same period a year earlier, and the share of Apple's revenue in China remained at 20%. According to TrendForce forecast, Apple’s share in the global smartphone market will increase slightly in 2018 - up to 15.7% compared to 15.2% in 2017, and Samsung market leader will lose 1.6 percentage points. Nevertheless, competition in the smartphone market remains intense, and Apple will have to fight for the attention and wallets of customers, including Chinese manufacturers HUAWEI and Xiaomi, which have significantly strengthened their market position recently.



    - Anna Lakeichuk , Head of ITI Capital Research Department

    Other financial and stock market related materials from ITI Capital :


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