Apple Sales Falling - Where Do They Go From Here?
As you'll see from some of our other technology posts here at UNTITLED, we're avid Apple users and it appeared that Apple had been going the right way with regards to the USB-C cable switchover on their new iPads. However, news reached us of a slowdown in Apple sales as demand in particularly the Chinese market has not been performing up to its usual standards. Apple hold a rather large market share in China, as they do worldwide and so, for them to lose out on a large sector in China could prove detrimental to the valuation of the business.
The forecasted sales of $89 billion may seem like a large amount to the average consumer for a business, but for Apple's investors, they are proving to be rather hard people to please. The three months up to the 29th December, the festive period, is usually one the strongest for Apple as people wish to buy new iPhones or iPads for example for their friends or family. Apple, towards the back end of 2018, had share prices drop a further 7%, which is a rather large amount. The meteoric rise of the smartphone contributed to Apple's massive successes and with the stagnation of the market, Apple will slow down with it. People do not necessarily wish to upgrade incessantly, as they would have done a few years ago. To be honest, the prices of iPhones now are absolutely ridiculous and so constant upgrading isn't as economically viable as it once was.
Moreover, with the rise of Android-based firms such as Huawei, Apple's market share in China specifically has decreased rather a lot. In the first three quarters of 2018, Apple's market share dwindled from around 8% to just below 5%, whilst Huawei's was on the rise, and at the time of the report being published, sat at around 16%. The trade war between the USA and China has most likely caused this as Chinese consumers boycott US products. This is despite the fact that Apple products are made in China by Foxconn, along with some of the other colossal American tech-giants, such as Intel and Google. The issues Apple have faced are not just in China itself; they're also in the Greater China area, including Hong Kong and Taiwan. Apple CEO Tim Cook in his letter to investors stated that "most of our [Apple's] revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad."
Apple, in my opinion, needs to lessen its rather aggressive pricing strategy. This would be in order to compete with the likes of Android-based firms such as Huawei who hold some competitive advantages over Apple's iconic iPhones. Their new effort, the P20 Pro, hailed by Stuff as "the best phone in the world right now" shows that Android phones are catching up and bettering their iOS-based counterparts. I've been an Android fan for a hell of a long time; currently sitting by me is a Google Pixel Two. Don't get me wrong, it's a great phone, but it's the closest I've ever come to an iPhone. There's no expandable memory, nor does it come with a headphone jack. This, to me, is a hardship, especially because I listen to a lot of music and need the storage. iPhones have always suffered from the pitfall of having a fixed memory capacity and it's not something I could really live with, knowing the phone's cost is in excess of a thousand pounds. The fact that Huawei have practically double the market share that Apple does in China shows that people are moving away from the brand conformity associated with Apple, to newer and potentially superior smartphones.
So, where do Apple go next? In recent news, Apple are trying to improve their service side to the business, with Tim Cook in his open letter stating that trading phones into Apple stores will be made easier, along with the assistance of data transfer from current models to new when consumers wish to change. Cook described it as "great for the environment....,great for the consumer...and great for developers". It appears that Apple are using a tripartite system of support and satisfaction, by helping the environment, consumers and developers all in one go. Of course, all of this helps Apple, their brand image and above all, continues to enhance their already colossal popularity as a business. Despite the massive macroeconomic implications on Apple's business activity, they know that the business will come out of this mess soon. This debacle is only temporary. Apple will just continue to do what they're doing. It's all brand loyalty. Some things never change.