Apple isn’t the only smartphone manufacturer seeing falling sales. New figures from Strategy Analytics show what the global smartphone market saw its first-ever year-on-year drop on sales, down 3%.
Linda Sui, Director at Strategy Analytics, said, “Global smartphone shipments fell 3 percent annually from 345.0 million units in Q1 2015 to 334.6 million in Q1 2016. It is the first time ever since the modern smartphone market began in 1996 that global shipments have shrunk on an annualized basis. Smartphone growth is slowing due to increasing penetration maturity in major markets like China and consumer caution about the future of the world economy.”
Apple’s fall was of course far more dramatic, iPhone sales down 18% year-on-year, with CEO Tim Cook blaming economic ‘headwinds’ – and Strategy Analytics’ numbers show that strong competition from Chinese brands forms a large part of those …
Both Huawei and Oppo saw strong gains. Huawei saw its market share climb from 5% to 8.5%, while Oppo almost doubled its share from 2.4% to 4.6%. Apple saw its own share slip from 17.7% to 15.3%. The market intelligence company said that ‘pressure is mounting for Apple to innovate a new wow design.’
Apple noted that China played a big role in its fall in sales, reporting that revenue there was down 26% year-on-year – much larger falls than experienced in the U.S. and Europe. Cook singled out Hong Kong, but analysts cited by the WSJ said that this is reflective of China as a whole.
Analysts said Hong Kong’s retail weakness is a part of the overall slowdown in mainland China, since many of the city’s shoppers are Chinese tourists.
Gartner analyst CK Lu said that while the iPhone 7 should see Apple return to growth in China, it will face price pressure from local brands.
We believe Apple still has its brand premium in China, but its sales mix is moving to lower average selling price.
It will be interesting to see next quarter what impact the lower-cost iPhone SE has had, both on iPhone sales in China and on the average selling price.
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I’m actually happy about these slowing sales of all Apple products.
I mean it’s a slap in the face if Tim who is without a doubt the one who doesn’t want the cheapest iPhone to have more than 16GB of storage. They exuberant amountf of money Apple charged for storage upgrades is an absolute crime. A crime!
I am convinced slowing iPhone sales was te reason for launching a 400$ iPhone. And so I hope the overall sales of all their products will teach them a lesson and hopefully they will stop charging a month’s worth of rent for a storage upgrade which costs them as much as a bottle of coca cola.
If you think any of that is true, you really don’t get it. 16 GB iPhones are insanely popular, because the overwhelming majority of buyers couldn’t tell you “how many gigabytes my phones has”..nor do they care. Nor does it affect their experience.
And if you think the iPhone SE is some kind of half-assed “response” to slowing sales, you have a poor concept of how to improve sales, or why sales have stopped growing. The iPhone SE was an overdue update to the $99/4″ tier…and it was only released now instead of last September so as not to compete with the 6s line.
And shame on 9to5 for using verbiage like SLUMP in their articles. It is not a slump. They sold 50 fucking million iPhones. That’s a lot of iPhones. The reason it wasn’t 55 million is because of obvious market saturation that is finally starting to happen. It can’t grow every single year, after, forever. Pure past success dictates that this HAS to happen.
People who buy 16GB iPhones are people:
-who want the cheapest model of the iPhone/flagship iPhone
-who may not care at first but will realise later on that they should’ve gotten the higher storage model.
Please do not tell me it was a coincidence Apple launched a 400$ iPhone RIGHT after they saw iPhone sales were slowing down.
Yes people are still wanting 4 inch iPhones. But that is not what I said. I said Apple would not have launched a 400$
IPhone if the sales had not been slowing.
In other words, they would have probably sill launched the SE but for 550$ or more.
Sorry but your arguments are ridiculous.
Apple has been launching iPhones for 9 years and jsut after slowing sales they launch a much more affordable one… Hmmmm why would that be.
The iPhone SE was launched:
– Because the 4″ tier was overdue.
– Because 6s sales finally peaked, and thus no worry of cannibalization.
Numbers wise, the cheapest iPhone will have the smallest impact on Apple’s bottom line, and the expected sales volume of the device will do nothing to offset the expected sales numbers leading into Q4. So, you’re argument is that of a petulant little child making up fantasies to entertain himself.
Btw you do bot quite understand the meaning of ‘slump’ it seems. slumping sales means the sales weren’t as good as before. Slump is not the same as ‘many/much’.
I persobally think the reason iPhone 6S and 6S Plus didn’t sell as well as iPhone 6 and 6 Plus is because the iPhone 6 and 6 Plus were the first large screen iPhones Apple has launched. And many many people were waiting for that iPhone. And so many people switches from Android last year and many people even upgraded from iPhone 5S while they maybe would not have done if iPhone 6 didn’t feature a larger display.
And while iPhone 6S is awesome, it’s not nearly as compelling to upgrade from the 6 to the 6S as it was from upgrading from the iPhone 5/5S to the 6/6 Plus.
@applegetridofsimandjack
My dad has an iPhone 6s. It has 16GB. He’s had a 16GB iPhone 4s for years. When I asked him if he wanted more storage, he said that 16GB is more than enough for him.
Guess what? It’s the same for many OTHER people. Just because YOU don’t like having 16GB doesn’t mean EVERYONE ELSE has the same opinion as you. Most just don’t care and if they did, the number of iPhone sales would have dropped A LOT more sharply then it is now.
As for the SE, there have been rumours a tiny bit after the 6s and 6s Plus were being released and their sales didn’t drop then.
Finally, OF COURSE the current generation iPhones weren’t a compelling upgrade compared to upgrading to the 6/6 Plus. That with ALL “s” upgrades (except the 3GS)! The “s” upgrades usually had a speed bump and a feature or two, while the number changed ones had more features along with the spec bump:
iPhone 3GS: … just a speed and improvement bump (I don’t see any new features there).
iPhone 4s: Siri
iPhone 5s: Touch ID
iPhone 6s/6s Plus: 3D Touch
Oh yeah… the upgrades for all but the current “s” phones were REALLY GREAT AND COMPELLING to upgrade!
*facepalm*
I know somebody who buys phones to be issued to the staff of a large company. He regards the iPhone SE with 16GB as the perfect phone. The limited storage means that people can’t load it up with too much music, photos and movies. If he had his way, there would be even less storage available for such purposes. The fact that it’s cheaper than previous iPhones is icing on the cake.
Apple does the same with it’s processor upgrades btw. They have huge margins on those as well.
I personally feel the same way about the 16 gb but the fact is that, even here at work for example, I run into tons of iPhone users, and a lot of them are not even “Apple people” much less tech people or even app people. A lot of them have the 16 gb. They stream limited music, they store pictures anywhere and everywhere. Whole different world then what say I do, I would be considered a power user. While the pricing can be silly, the market is definitely still there, that market just isn’t *us*.
I think iPhone SE having just 16GB is ok. Because it only costs 400$ and is a ridiculously awesome phone considerings its price. But a 749€ (IPhone 6S in Europe) and 859€ (iPhone 6S Plus in Europe) smartphone should never only have 16GB of storage, that is just inacceptable.
@ninjadude
I know tons of people who own 16gb iPhone 5S’ and iPhone 6’s, they all constantly run into storage problems. 16GB for a 700€ smartphone is inacceptable.
Yes there were rumors of iPhone SE after iPhone 6S launched, but guess what, Apple has daily updates on iPhone sales. They already saw there that iPhone sales were dropping. The iPhone 5C was also another example that Apple would never have launched a budget iPhone while iPhone sales were rising. iPhone 5C was for the colorful as they said and that might be true. But it had last gen’s specs and still was just 100$ cheaper than the flagship iPhone back then, iPhone 5S. So how come iPhone SE with THE LATEST specs and features (except Force Touch and the front facing camera upgrade) only costs 400$? While all iPhones including 4inch iPhones before that cost as much as iPhone 6S does today?
iPhone SE is a reaction to slowing sales, some people are really amd about this.
Facepalm
Apple has to release iPhone “SE 2” next year as a reaction for iPhone 7 (with minimal design changes) sales if the up to date rumors are correct.
They have tons of patents just for decoration.
I have to agree on this one. Companies NEED to make money but all Apple has been doing since Tim took over is emptying people’s pockets with those upgrade fees.
The Chinese manufacturers have taken some market share but they have been in a cut-thoat pricing war with one another. None of them have made any profit and some businesses failed already.
The 26% year-on-year drop in revenue in Great China is misleading, as Tim explained. He said that in terms of actual sell through the drop is 5%. A big chunk of that 26% of revenue $ is a loss taken because of exchange rates. Also people from mainland China can no longer go to Hong Kong to get an iPhone cheaper. Also the 26% drop is calculated relative to an 88% increase the previous year (with the move to bigger screens) an event that was unprecedented and is irrepeatable.
The figures you publish are pre-SE. Since the introduction of the iPhone SE there have been reports of strong Apple sales in China. Also reports of Chinese manufacturers reducing their orders with suppliers. The tide has already turned.
Yes, as I mentioned in the piece, I’m going to be very interested to see what impact the SE has had next time around. I’d expect it to do well in China.
Today I ordered my iPhone SE to replace my too large iPhone 6. I have to wait 4 weeks here in Europe. I ordered directly from Apple. So the SE sells well in EU too :-)